Cabinet approves draft on expanding SEZs

The government approved plans to expand investors’ incentives reserved for the Special Economic Zones (SEZ) onto entire Poland’s territory. The authorities hope that such expansion will “make Poland even more attractive place for investors by creating conditions favorable to ambitious economic endeavors.” The project also aims to help SMEs which were not widely present in SEZs. Expanding of the SEZs doesn’t mean that all investors will be able to get tax incentives reserved for the zones, however, they won’t have to relocate to such areas to be able to get them. As indicated in the statement, enterprises that have an impact on the competitiveness and innovation of regional economies, and consequently on Poland's economic development, will be preferred when it comes to granting tax incentives. “This includes knowledge transfer, conducting R&D activities, cluster development, but also providing favorable conditions for employees, including those going beyond standard benefits from the company's social benefits fund.” The draft also assumes flexible periods of tax exemptions. “The preference decision will be issued for a fixed period - typically from 10 to 15 years. However, the higher the public aid in the region allowed by the European Union, the longer the possible period of exemption. At the same time until the end of SEZ, ie until the end-2026, it will be possible to extend the duration of the decision to 15 years in the case of areas currently included in the SEZ areas.” According to the legislators, the new regulations should be in force this quarter, so that investors can take advantage of incentives at the beginning of the second quarter. The Special Economic Zones were created in the 1990s established to boost economic growth, especially by creating new jobs, developing specified industries and expanding exports. They offer various incentives such as income and property tax exemptions. There are currently 14 SEZs in Poland, which cover some 25,000 hectares. Their incentives are set to expire in 2026.