Reimbursement of even more than half of two-year employee payroll costs for the BSS in ?ód?

The Polish Investment Zone (PIZ) provides a new formula for the functioning of the Economic Zones in Poland. It offers exemptions from corporate income tax and makes these exemptions available to the sector of modern business services on a preferential basis. The revised regulation enables our company to take advantage of tax benefits regardless of where our registered office is located. The location only determines the extent of the support that we can obtain.

The baseline quantitative criterion – how much money we have to invest to meet the quantitative requirements set by the PIZ mechanism in ?ód? is PLN 80,000,000 for the industrial investments. In the case of broadly defined modern business services (e.g. programming, financial and accounting services or R&D services), this threshold is reduced by 95%, and in ?ód? it amounts to merely PLN 4,000,000. 

What expenses are included in the investment – what costs will allow us to reach the threshold of PLN 4,000,000?

In the case of the services sector, the main cost item for the investor are, of course, salaries of employees. Therefore, apart from expenses associated with the purchase of computer hardware, office equipment or software, an entity operating in the Polish Investment Zone and benefiting from public aid may also include its 2-year employee payroll costs (gross employee wage costs plus the obligatory contributions, such as the social insurance contributions, paid by the entrepreneur from the hire date) in its overall investment costs. We can safely assume that the average gross salary in the sector of modern business services is PLN 8,000. This means that if we employ about 20 people, we will be able to reach the minimum threshold (irrespective of the previously mentioned cost categories).

Why ?ód??

Depending on the level of unemployment, there are different thresholds for public aid in the regional cities in Poland for the new investments. In the case of ?ód?, it is 35%, 45% and 55%, depending on the size of the company. A small company is eligible for public aid of 55%, a medium-sized company - 45% and a large company - 35%. In other regional cities in Poland, these thresholds are usually 10% lower in all these categories. In other words, a large company which invests PLN 10 million in ?ód? is eligible for public aid in the amount of PLN 3.5 million while, for example, in Wroc?aw it will be only PLN 2.5 million.

What does this aid provide?

The investor receives aid in the form of a long-term exemption from corporate tax (CIT). In ?ód?, the amount of aid is calculated on a project-specific basis and investors can use it over a period of 12 years of business activity. In principle, corporate income taxpayers are taxed at a rate of 19%.

In ?ód?, salaries in the sector of business services in the IT segment are 13% lower than the national average. In the area of finance and accounting, they are on average 9% lower. About 30,000 people work in the sector of modern business services in ?ód? and this number is growing at a rate of approximately 14% annually.

In the latest global ranking of the best economic zones, prepared every year by the team of fDi Magazine (periodical of the Financial Times group), the ?ód? Special Economic Zone (?SEZ) has been named as the third best in the world. It has also been recognized as the best zone in Europe for small and medium-sized enterprises.

* the information presented in this article only provides a basic insight into the functioning of the Polish Investment Zone and does not fully cover the objectives of that tool