How does business in an SEZ look like?

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Running a business involves many costs, including tax burdens. They may hinder the functioning of especially small and medium-sized enterprises. In such a situation, it is worth considering moving your enterprise to one of the special economic zones (SEZ).

What are Special Economic Zones (SEZ)?

Special economic zones (SEZ) are administratively separate areas of our country, where you can run a business using preferential terms of tax settlements. They have been created to support recent investments that can create new jobs as well as the development of a given region.

Discounts offered by special economic zones (SEZ)

Probably the most beneficial for entrepreneurs is the exemption from the necessity to pay income tax on revenues that they receive from operating in a given economic zone. The amount of the relief is not fixed and depends on the size of the company and the territory of Poland where it is located. Some regions help businesses with 40% of the tax, others as much as 50%. The least support is available to companies from Warsaw - here the relief is only 30%. However, for small enterprises this aid may be increased by 20 percentage points, and for medium-sized enterprises by 10 percentage points. Transport companies, however, will not be able to be covered by such favorable "increases".

Special economic zones also allocate outlays for the creation and development of new jobs. The money on this account can be obtained, inter alia, for training for employees.

The last type of possible support does not function in all economic zones, and it is the local authorities who decide about granting it. It consists in exempting a person running a business from real estate tax.

Attention!

To take advantage of the assistance offered by special economic zones, you should:

  • run a business for at least 5 years,

  • maintain ownership of the assets associated with capital expenditure for 5 years.

However, in the case of small and medium-sized companies, this time is shorter by 2 years.

Tax settlement in special economic zones (SEZ)

The calculations for tax settlement for people benefiting from tax reliefs in economic zones look slightly different. The amount of income tax exemption is influenced by investment expenses incurred by the owner of the company. Having this value in hand, one should then focus on the aid intensity (30, 40 or 50% plus any percentage points that are received due to the size of the company). The result of these calculations shows the entrepreneur the amount of support he will receive under the income tax relief.

Remember!

Only expenses related to new investments or development of new jobs will enable entrepreneurs to obtain income tax relief.

Therefore, one must be careful that the given types of costs are not too high, because they may turn out to be too high for a small enterprise. It is also worth avoiding costs that are too low, as they may, however, be unfavorable for the development of a given region.

Another factor that may have a significant impact on obtaining the tax relief is the appropriate tax scale in the case of the personal income tax. Entrepreneurs who have opted for flat taxation will not be exempt from paying it.

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New SEZ regulations from 2018?

Prime Minister Mateusz Morawiecki presented a draft act on the principles of supporting new investments. The planned date of entry into force of the act is 2018 (however, the dates should be followed carefully). The new act is to replace the old act on SEZ (according to which the current SEZ will function until 2026).

According to the new law, all of Poland would be included in the "special economic zone" - government support for new investments, tax privileges would no longer depend on territorial areas, but on the company's development potential.

The new Act on SEZ includes new regulations, including:

  • the decision on support is to be issued by centralized bodies (and not, as has been the case so far, by SEZ managing authorities),
  • new project selection criteria - projects promoting development, innovation and job creation for qualified staff are to receive the most points,
  • the possibility of writing off the research and development tax relief from expenses incurred in the SEZ - if the income is not covered as exempt,
  • PIT exemption for at least 10 years,
  • free advisory and administrative services.

As you can see, the new act is very promising for micro and small companies, and as experts say - for the economic development of Poland.