Tax benefits from business activities within the Special Economic Zone (SEZ)
Special Economic Zones (SEZs) are designated areas within the territory of Poland, in which business activities (manufacturing and services) can be conducted on preferential terms. The zones operate on the basis of the Act of 20 October 1994 on Special Economic Zones.
Companies that invest and conduct business in Special Economic Zones (SEZs) in Poland are entitled to benefit from public aid, in the form of exemptions from income tax (PIT or CIT). The range of the exemption includes the income from the activities conducted on the territory of Special Economic Zones (SEZs) based on the obtained permission.
In June 2018, the provisions of the Law of 10 May 2018 on the promotion of new investments came into force. They allow to obtain exemption from income taxes throughout the country (not only in the areas covered by SEZs). However, this does not mean the liquidation of the zones, which are to operate until 31 December 2026.
Reasons for establishing special economic zones in Poland
The main goal of establishing Special Economic Zones (SEZs) in Poland was to accelerate economic growth in less developed regions, areas with high unemployment rates and areas undergoing restructuring. The functioning of SEZs is to help accelerate development of these regions by, inter alia, attracting new investments, increase of exports and by creating new jobs. There are 14 Special Economic Zones (SEZs) in Poland and each of them consists of several subzones.
Special economic zones in Poland
Special Economic Zones (SEZs) are located throughout Poland. Their well-developed infrastructure makes them very attractive to domestic and foreign investors. The number of investors in SEZs has increased, especially since Poland's accession to the European Union. List of Special Economic Zone (SEZ) managing companies, reporting to the Minister of Economy in Poland:
- Special Economic Zone Kamienna Góra, provinces: dolnośląskie, wielkopolskie, area - 373,83 ha;
- Special Economic Zone Katowice, śląskie, małopolskie, opolskie, area - 2347,34 ha;
- Special Economic Zone Kostrzyn-Słubice, lubuskie, zachodniopomorskie, wielkopolskie, area - 1868,05 ha;
- Special Economic Zone Kraków, małopolskie, podkarpackie, area - 707,78 ha;
- Special Economic Zone Legnica, dolnośląskie, powierzchnia, area - 1763,77 ha;
- Special Economic Zone Łódź, łódzkie, wielkopolskie, mazowieckie,
area - 1339,17 ha;
- Special Economic Zone Mielec, podkarpackie, małopolskie, lubelskie, zachodniopomorskie, area - 1495,65 ha;
- Pomeranian Special Economic Zone, pomorskie, kujawsko-pomorskie, zachodniopomorskie, wielkopolskie, area - 2039,99 ha;
- Special Economic Zone Słupsk, pomorskie, zachodniopomorskie, wielkopolskie,
area - 899,37 ha;
- Special Economic Zone Starachowice, świętokrzyskie, mazowieckie, opolskie, łódzkie, lubelskie, area - 644,46 ha;
- Special Economic Zone Suwałki, podlaskie, warmińsko-mazurskie, mazowieckie, area - 635,07 ha;
- Special Economic Zone Tarnobrzeg, podkarpackie, mazowieckie, świętokrzyskie, lubelskie, dolnośląskie, area - 1743,30 ha;
- Special Economic Zone Wałbrzych, dolnośląskie, opolskie, wielkopolskie, lubuskie, area - 2921,70 ha;
- Warmia-Mazury Special Economic Zone, warmińsko-mazurskie, mazowieckie, area - 1057,38 ha;
Special Economic Zones (SEZs) support the development of new investments within the meaning of Article 2(1) of the Act of 10 May 2018 on fostering new investments. Each Special Economic Zone (SEZ) operates in a specific area, according to the Ordinance of the Minister of Entrepreneurship and Technology of 29 August 2018 on determining the areas and assigning them to managers.
The main tasks of Special Economic Zone (SEZ) management companies include:
- issuing decisions on behalf of the Minister of Economy on support for new investments under the "Polish Investment Zone" instrument,
- performing inspections on the implementation of conditions included in decisions on support,
- conducting activities promoting business activity and new investments,
- taking actions that contribute to the improvement of cooperation between entrepreneurs, local community and social partners,
- cooperation in taking into account the needs of the labor market in the education process,
- creation of tools for development of innovative economy,
- recommending optimal location for new investments to entrepreneurs
getsix® special Services regarding Special Economic Zones (SEZs)
‘Step by step’ introduction to Special Economic Zones (SEZ):
- investment analysis of various exemption options in Special Economic Zones (SEZ)
- indication of the most tax-effective legal and structural form of business activity to be conducted in Special Economic Zone (SEZ);
- assistance in finding an attractive real estate for the investor’s activity within the area of Special Economic Zones (SEZ);
- assistance in negotiations with:
- representatives of the Ministry of Development and the Ministry of Entrepreneurship and Technology;
- representatives of all other state administration bodies in the procedure of obtaining the SEZ permit and other permits required under the administrative law;
- preparation and verification of the application documentation during the procedure of permit application (i.e. preparation or verification of the business plan);
- omprehensive assistance and tax advisory, particularly to foreign investors, in all procedures related to the start-up of business activity in Poland, including assistance in all legal and tax actions with respect to registration of the legal entity.
How to manage tax doubts – our current tax advisory:
- establishment of the terms and conditions of conducting the most tax effective business activity within Special Economic Zones (SEZ);
- pointing out principles that determine effective business activity within and outside Special Economic Zone (SEZ) when conducted by the same investor;
- identification of solutions to the tax problems arising from conducting business in Special Economic Zones (SEZ);
- establishment or verification of transfer pricing policies related to transactions concluded between group entities, in case their business activities are conducted inside and outside Special Economic Zones (SEZ) (including also multinational transactions), as well as related to one entity conducting business inside and outside Special Economic Zones (SEZ);
- optimization of the tax structure for business activity in case the available public aid limit has been used up, i.e. in the period when company’s income is to be tax exempted;
- request for changes in the permission.
Binding tax law interpretations:
- monitoring of a current judgment of the tax authorities and the Administrative Courts related to Special Economic Zone (SEZ);
- identification of the tax risk areas that might be minimized by the biding tax law interpretations which could be subject to tender procedure;
- optimization of the tax structure confirmed for tax safety reasons for Special Economic Zone (SEZ) entities applying for biding tax law interpretations;
- comprehensive assistance from preparation of the application finishing with the receipt of the binding tax law interpretation (including also the litigation recourse at the administrative court).
Enlargement of Special Economic Zone (SEZ) into private areas:
- preparation of initial opportunities analysis and new investment project eligibility for Special Economic Zone (SEZ) enlargement in a chosen area;
- comprehensive assistance in relation to the Special Economic Zone (SEZ) enlargement process both to undeveloped territories (Greenfield projects) and areas where a company already operates;
- advisory with regard to amendment of the Special Economic Zone (SEZ) permit preceded by analysis of possible solutions to adjust the permit to company needs;
- support in establishing internal CIT settlements for companies operating within and outside the Special Economic Zone (SEZ).