Public aid
Public aid from the title of investing within the special economic zone assumes the form of income tax relief. Entrepreneurs are entitled to public aid on the power of permits issued by Krakowski Park Technologiczny (Kraków Technology Park, KTP), the company managing the special economic zone. The share of public aid varies, depending on the size of the firm.
Small firms receive the highest level of public aid, which in Małopolska Region amounts at 70%, medium-size firms may count on 60%, and large ones receive 50%.
Income tax relief may be obtained by firms running new investment projects that simultaneously meet two criteria: investment of at least € 100 000 within the special economic zone, and conducting business that qualifies to public aid, as described in detail in government order on Kraków special economic zone.
There are two manners of calculating public aid:
- from the title of the newly established jobs, and
- from the title of investment outlay incurred for new investment project.
The table below illustrates calculation of public aid that the investor is entitled to:
investment (in PLN) | new jobs |
1. land 3 million 2. building 10 million 3. other fixed assets 11 million | 1. labour cost (monthly, incl.tax) PLN 2000 2. new jobs 100 3. number of months (2 years) 24 |
Total (1+2+3) 24 million | Total (1×2×3) 4,8 million |
Public aid (50%) 12 million Public aid (60%) 14.4 million Public aid (70%) 16.8 million | Public aid (50%) 2,4 million Public aid (60%) 2,8 million Public aid (70%) 3,36 million |
Calculated in the manner presented above, public aid may be received by the entrepreneur as relief from income tax payment as long as the zone operates, which currently is 1st December 2020. It may therefore be said that the entrepreneur in fact pays no income tax at all to the moment of exhausting the volume of assistance calculated from the investment costs or from the establishment of new jobs.
