Cabinet opts to grant investors in special economic zones sizeable tax breaks

The Cabinet yesterday approved legislation giving investors in Poland's Special Economic Zones (SSE) a tax break on total investment costs of 50%. The legislation defines the conditions under which investors may apply for tax holidays and lists the types of investment that may be written off. Analysts say the government's move will have a positive effect on economic zones' further development, dispelling earlier fears that investors would flee from the zones. The government's original proposals to introduce a three-tier tax holiday system, making either 10%, 20% or 30% of investment costs tax deductible, was bitterly opposed by SSEs, who claimed the unfavorably low breaks would scare off investors. Under terms of the new legislation, investors in all of the zones, with the exception of Krakowska SSE whose investors are entitled to a 40% tax break, will be able to take advantage of the 50% tax holiday. Despite approval of the legislation, there are voices that contend the government is not doing enough for the promotion of Poland's SSEs. (Puls Biznesu, p.7) J.K.