Ministry plan could resolve Special Economic Zone differences with EU

The Economy Ministry plans within the next two weeks to present a proposal designed to resolve the dispute with the European Union (EU) over the country's Special Economic Zones (SSEs). Under EU law, state aid to private investors cannot exceed 50% of the planned investment value in case of large investments, and 65% for smaller ones. The income tax breaks currently enjoyed by investors in Poland's SSEs could in some cases exceed the EU limits, hence causing a serious obstacle in accession negotiations under the competition chapter. The Ministry is expected to propose a settlement under which existing investors would receive compensation equal to the difference between the EU-permitted level of assistance and what they would be entitled to under the original terms of their investment in the SSEs. This way, once Poland joins the EU, state aid would not exceed the limits. Investors contacted by Gazeta Wyborcza said they were pleased with the plans but were anxious to hear the details. The biggest problem will be estimating how much a given investor would be entitled to in tax breaks over a period of ten or more years. (Gazeta Wyborcza, Mar. 2-3, p. 25) T.J.