New rules for granting investment aid for the period 2022-2027
Revised conditions for investment aid (including "government grant" and Polish Investment Zone) from 2022.
Strefa Ulg i Dotacji (6/2021) | 6th May 2021
The European Commission has published new Guidelines on regional investment aid. From the beginning of 2022, the rules for applying for government grant and tax exemption under the Polish Investment Zone will change. This is the last call for obtaining support in Warsaw and for specific investments in Dolnośląskie and Wielkopolskie Voivodships.
On April 19th, 2021 the European Commission has published a new Guidelines on regional State aid for 2022-2027, setting out the conditions for granting regional investment aid compatible with the internal market of the European Union, which will largely affect the availability and level of aid in specific regions.
New regional aid map
In accordance with the Guidelines, each Member State should prepare and notify for the European Commission approval regional aid map applicable from January 2022 to December 2027. Taking into consideration economy disruption caused by the COVID-19 pandemic, a mid-term review of the regional aid maps is planned for 2023.
Sign in: Newsletter Strefa Ulg i Dotacji
The guidelines assume that from the beginning of 2022:
- it will be possible to increase the maximum aid in 9 regions (Lubuskie, Zachodniopomorskie, Kujawsko-Pomorskie, Mazowieckie (except Warsaw and surrounding counties), Łódzkie, Opolskie, Małopolskie, Śląskie and Świętokrzyskie),
- the maximum aid intensity will be reduced in 3 voivodships, i.e.: Pomorskie, Dolnośląskie and Wielkopolskie.
Maximum intensity may be increased by:
- 20 percentage points in case of micro and small enterprises,
- 10 percentage points in case of medium-sized enterprises.
In accordance with the Guidelines, the maximum aid intensity may be increased by 10 percentage points for territories selected for support from the Just Transition Fund (JTS) in the framework of territorial Just Transition Plan of a Member Country approved by the European Commission, provided that these territories are located in 'a' areas - the regional aid map will be amended accordingly after the adoption of the relevant regulations.
Limited availability of aid in selected voivodeships
According to new Guidelines:
- Projects carried out on the area of Warsaw and neighbouring counties (i.e. Warszawski Zachodni, Legionowski, Pruszkowski, Nowodworski, Grodziski, Miński, Wołomiński, Piaseczyński and Otwocki) will not be eligible for regional investment aid.
- Wielkopolskie and Dolnośląskie voivodships will become 'c' areas, which for large entrepreneurs will mean the possibility to benefiting from regional investment aid solely for investments connected with new business activity, i.e. such which has not been previously carried out by the entity applying for aid on the territory of the voivodeship (assessment based on 4 digits NACE code). From the beginning of 2022 large enterprises will not be able to obtain support for investments aimed at, among others, an increase of manufacturing capacity.
Clarification of the categories of costs eligible for support
The European Commission has described in detail the conditions for eligibility of tooling costs, which is important for many entrepreneurs using regional aid. Until now, only costs of assets which are part of an initial investment in beneficiary's plant located in the target area, were eligible for support. The adopted Guidelines have introduced an exception, according to which the costs of tooling for suppliers may be classified as eligible costs by company that purchased (or produced) them, when they are used to achieve project objectives during investment maintenance.
Shortened deadline for investment?
The new definition of the term "completion of the investment", which according to the Guidelines means the moment when national authorities consider the investment as completed or the period of 3 years from the start of works, depending on what occurs earlier, may also turn out to be an important change.
The above provision suggests that maximum time to implement new investments from January 2022 will not exceed 3 years, which may affect the scope of investment projects, which are often planned for longer, several-year period.
The Guidelines also contain a description of the criteria for assessing the compatibility of regional aid with the internal market, which discusses such elements as i.a the incentive effect, the need for state intervention, the appropriateness, transparency, or proportionality of the regional aid granted.
In the light of the COVID-19 pandemic and related possible restructuring plans of entrepreneurs, it should be emphasized that according to new Guidelines, aid should not be granted for investment resulting in transfer of activities from entity located in the European Economic Area (relocation).
Undoubtedly, the content of the Guidelines may have a positive impact on investments in Poland due to the increased level of support in 9 out of 16 voivodeships. However, also considering limitations, which as of January 1, 2022 will affect investors planning to expand their activities in the Wielkopolska, Dolny Śląsk and in Warsaw with neighbouring counties.