The Polish Investment Zone (Polska Strefa Inwestycji, PSI) represents a paradigm shift in how Poland attracts foreign direct investment (FDI). By removing geographic boundaries and turning the entire country into a potential tax haven for new projects, the PSI offers one of the most competitive Corporate Income Tax (CIT) incentive programs in the European Union.
The Decision on Support: Your Gateway to Tax Relief
The cornerstone of the PSI is the Decision on Support (Decyzja o Wsparciu), an administrative act issued on behalf of the Minister of Economic Development. This decision defines the boundaries of the tax-exempt activity and sets the “cap” on the total state aid available. The amount of aid is calculated based on either the capital expenditure (CAPEX) or two years of labor costs for newly hired employees, whichever is more beneficial to the investor.
Deep Dive into Qualitative and Quantitative Criteria
To qualify for a CIT exemption, an investment must pass a rigorous dual-track assessment:
- Quantitative Thresholds: These are minimum investment values that scale based on the size of the enterprise and the local unemployment rate. For instance, investments in Eastern Poland (Podlaskie or Lubelskie) often require significantly lower capital outlays than those in highly developed hubs like Warsaw or Kraków.
- Qualitative Criteria: This points-based system evaluates the “quality” of the investment. Points are awarded for high-paying jobs, R&D cooperation, investment in “Green Energy” solutions, and participation in regional industrial clusters.
Maximizing the benefits of this program requires meticulous planning. The expert consultants at polishtax.com provide comprehensive tax advisory services to help foreign investors structure their projects to meet all criteria and secure the Decision on Support.
The Role of Regional Zone Managers
Poland is divided into 14 administrative areas, each overseen by a Zone Manager (e.g., the Kraków Technology Park or the Pomeranian Special Economic Zone). These managers act as the primary point of contact for investors, facilitating the application process and monitoring the fulfillment of the conditions set in the Decision on Support. Building a strong relationship with the relevant Zone Manager is essential for a smooth application process.
Maximizing the Exemption Period
The tax exemption is valid for a period of 10, 12, or 15 years, depending on the location’s regional aid intensity. During this window, the income generated from the “new investment” is effectively exempt from CIT until the total aid ceiling is reached. For many multinational corporations, this results in an effective tax rate of 0% on their Polish operations for over a decade. However, meticulous accounting separation between “old” and “new” activities is required to maintain compliance during tax audits.