Facilitations for large and medium firms for reinvestments within the Polish Investment Zone
Big changes are being prepared in the case of reinvestments. According to the provisions of the draft regulation on public aid granted to some entrepreneurs for the implementation of new investments, an entrepreneur will not be required to incur the same expenditures as in the case of creating a new plant.
From 2022, the entry threshold in the form of minimum eligible costs planned to be incurred will be lower by 50% – such preference will be given to medium and large companies planning to expand their plants. An additional facilitation for medium-sized entrepreneurs will be the reduction of the basic threshold of minimum eligible costs by another 10% (from 80% to 90%).
– This means that smaller investments, which so far have not been eligible for support, will be able to benefit from tax relief. For example, in an area with a high level of unemployment, a medium sized entrepreneur will be able to receive support for an investment of min. PLN 1 million of eligible costs, and in the case of reinvestment, it will be enough to invest PLN 500 thousand of eligible costs. In case of reinvestment it will be enough to invest 500 thousand zlotys of qualified costs. PLN 5 million of qualified costs to be able to take advantage of the relief – explains Adam Allen, tax advisor, partner in Thedy & Partners.
These changes will be in force for three years from the date the regulation comes into force. After this period, the previous rules will be restored.
– Although the additional reduction of quantitative conditions is temporary, it should be assessed positively. It will allow for a wider use of the investment tax credit – assesses Adam Allen.