Special Economic Zones (Specjalne Strefy Ekonomiczne, or SSEs) are separated areas in selected regions of Poland intended for the conduct of business activities under preferential conditions. The purpose of creating such specially privileged areas was to accelerate the economic development of the particular regions of the country through improvement of their attractiveness for new investments.
At present there are
14 special economic zones operating in Poland. They differ with regard to area, location, nature, development conditions or road, technical and telecommunication infrastructure. Each of the zones is managed by management authorities in the form of a commercial company controlled by the State Treasury or provincial local government. The SSEs were established in 1996–1998 for a term of 20 years. Most of the zones celebrated their 10th anniversary recently.
Special Economic Zones: facts & figures
The mechanism of the zones’ operation is based on the possibility of income tax exemption for entrepreneurs undertaking new investment in SSE areas. An additional encouragement for the entrepreneurs may also be the infrastructure prepared for investment purposes in the zones.
The basic condition of tax exemptions in SSEs is the making of a new investment by the entrepreneur, incurring a specific amount of investment expenditure and the creation of new workplaces. The tax exemption amount depends on the value of the investment expenditure incurred by the entrepreneur or on two-year’s labour costs of the staff employed by the entrepreneur in relation to the investment made. The limit of public support (including the tax exemption) is calculated as a percentage of investment expenditure (or two-year’s labour costs, should the latter be higher). Depending on the region the limit amounts to 30%, 40% or 50%. In the case of small and medium-sized companies, the percentage may be increased by 20% or 10%, respectively.
The particular regulations establishing the SSEs include the specific principles regarding the definition of a new investment, establishment of new work places and the conditions of qualifying costs for the purpose of calculation of the support limit. It is, however, worth emphasising that the minimal value of investment entitling public support in an SSE amounts to EUR 100,000.
In specific cases, it is also possible that the properties owned by the investor can be included in the zone. Nevertheless, important economic provisos must be present in order to do so, which in practice means that entrepreneurs must meet higher requirements than if they were to undertake investment in an area in which an SSE has previously been established.
The formal basis for tax exemptions on account of carrying out business activities in an SSE is the receipt of a permit for carrying out business activities in an SSE. Such permits are granted by the Minister of Economy through the entities managing the particular Zone.
The permit determines the subject of business activities (according to the Polish Classification of Goods and Services), the revenues from which shall be exempted from income tax, as well as the individual conditions for using the tax exemption by the given entrepreneur (in particular regarding the number of new workplaces and the value of investment expenditures). The regulations determining the activity of the particular Zones identify the types of business activities for which permits are granted.
An entrepreneur operating in an SSE is no way limited as to the possibility of undertaking business activities outside of the SSE area or any activities outside of the scope of the permit. It must be remembered, however, that the revenues from such activities shall not be subject to income tax exemption.
Should the entrepreneur fulfil the requirements determined in the Zone regulations, then starting from the month in which it incurred the investment expenditures – in the period from the date of the permit receipt by the date of exhausting the limit of public support or expiry of the permit – the entrepreneur has the right to income tax exemption. The permits expire along with the expiry of the term for which the Zone has been established. Although the deadlines in the particular Zones may differ slightly, it is generally assumed that SSEs will exist in Poland until 2017.
