Law and regulation of industrial and logistics investment in Poland

Poland offers a variety of incentives and support programmes for specific sectors, in particular those utilising European Union funds, as well as programmes offered by the National Centre for Research and Development. The available business support programmes depend on the industry and location and some of them may be potentially applied to businesses from the Industrial&Logistics Sector. They often include funding for innovations and R&D activities.

In Poland, there are two main categories of support, employment grants and support for new investments. These two incentives may be granted simultaneously only if certain conditions are met (the maximum amount of the granted aid, a certain threshold of capital expenditures, or a minimum number of new jobs created). In order to obtain the incentive, both the minimum investment and new jobs figures need to be met. Furthermore, R&D tax relief is available.

Another important feature of business support are special economic zones. A Special Economic Zone (SEZ) is a dedicated area where investors may operate their businesses under preferential conditions, varying locally. These preferential conditions include mainly corporate income tax (CIT) relief. In 2018, the Polish parliament introduced the New Investment Support Act due to which 100% of Poland's area operates as one special economic zone in which companies benefit from tax advantages. The level of tax exemption depends on the location of the investment project and the size of the company. It is possible to obtain CIT or PIT exemption for different periods of time.

Another type of support constitutes industrial and technology parks - places which, due to the concentration of firms from one sector and supporting science and research facilities, are on the fast track of development. Each park has different characteristics, depending on specific regional, social, cultural and economic factors, together with the facilities, materials and human resources available. A technology park is created with the aim of attracting an influx of knowledge and technology for scientific bodies and businesses. The benefits are offered for businesses using innovative technologies and such entities may enjoy mainly the following services: consultancy, transfer of technology, transfer of results from scientific research and development work, into technological innovation, creating favourable conditions for businesses.

Industrial and technology parks are formed with the assistance of local authorities and are aimed at providing preferential conditions for businesses, in particular for small and medium sized firms. The goals for industrial and technology parks are primarily for providing offers of workspace for commercially viable companies that use new or innovative technologies, attracting investors and creating jobs.

A CIT relief for R&D is available in Poland. The tax relief is available to taxpayers earning revenue other than revenues from capital gains. The relief allows the deduction of costs for R&D from the CIT tax base (however, the deduction cannot be higher than the income earned from revenues other than capital gains). The deduction does not affect the taxpayer’s right to treat the costs of R&D as tax-deductible costs for CIT purposes.

From a Polish CIT perspective, R&D includes both scientific research and development works and covers, among others, creating of improved or new products, processes or services (except of activities involving routine and periodic changes to the products, processes or services).

R&D costs which may be deducted from the CIT tax base include for example the wages of employees (proportionally to the part of their overall working time dedicated to R&D), the purchase of materials directly linked to R&D or, the purchase of specialist equipment.

Taxpayers may deduct 100% of the R&D costs. However, if certain conditions are met (e.g. the taxpayer is an R&D centre), the deduction may increase to 150%.

Other support instruments are: Innovation Box, governmental R&D grants as well as several programmes co-financed with EU funds. Innovation Box introduces a preferential 5% PIT rate applicable to income from qualifying intellectual property rights generated by sole proprietors (instead of the standard 17%-32% and 19% flat PIT rates).

Another type of incentive is the real estate tax exemption available in specific municipalities. Municipal councils may establish an exemption from real estate tax for businesses. To benefit from the exemption businesses usually need to fulfil a number of criteria provided in the municipal council’s resolution. For example, this may involve making an investment of a specific size or maintaining the investment for a certain period of time.

A CIT exemption is available for new investments if a taxpayer receives a Support Decision under the New Investment Support Act of 10 May 2018. The CIT exemption applies to revenues obtained from the activity specified in the Support Decision.

The Support Decision may be issued in relation to new investments i.e. investments in tangible and intangible assets related to the establishment of a new plant, an increase in the capacity of an existing plant, diversification of the plant's production by introducing new products or fundamental changes in the production process of an existing plant; or an acquisition of assets from an unrelated party belonging to an establishment that has closed or would have closed had it not been purchased (other than a purchase of shares).