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New regulation on income tax exemption in PIZ


​by Magdalena Szwarc

5 January 2023

A new regulation on state aid granted to certain enterprises for new investment projects (PIZ Regulation) came into force on 1 January 2023.

The new provisions partly repeat the mechanisms contained in the 2018 PIZ Regulation, nevertheless, they also contain novelties and clarify certain issues. Interestingly, the version finally signed on 27 December 2022 contained modifications which had not previously been considered at the draft stage at all. PIZ investors must be ready for surprises. 

The new implementing provisions will apply to PIZ tax exemptions granted on the basis of applications for state aid decisions submitted from 1 January 2023. In turn, cases initiated and pending and state aid decisions issued before the new PIZ Regulation comes into force will be governed by the provisions of the 2018 PIZ Regulation. 

The new PIZ Regulation - the most important changes


1. When does the tax exemption start to apply?

In the case of the exemption based on investment costs (generally in the case of investment projects for production purposes), a novelty introduced by the new version is the postponing of the point at which the investor can start to benefit from the tax exemption. Until now, the exemption started to apply in the month in which the first eligible costs of the new investment were incurred. According to the new wording of the provision, an enterprise may use the income tax exemption for investment costs from the month in which the deadline for completion of the investment project specified in the state aid decision expires until the date of the expiry of the state aid decision or exhaustion of the maximum regional aid intensity – whichever occurs first. The new version thus introduces another new restriction on the application of the tax exemption in PIZ, which may be relevant particularly in the case of reinvestment.

2. Finance lease 

In the finance lease of assets other than real property, only costs incurred during the term of the finance lease contract will constitute eligible costs. In addition, it has been indicated that these assets must be new.

3. Costs of renting or leasing real property 

From 1 January 2023, the costs of renting or leasing land, buildings and structures will count as eligible expenses, provided they are incurred no later than by the end of the project sustainability period. The period is:

  • for large enterprises – five years of the completion of the investment project;
  • for micro and SMEs – three years of the completion of the investment project.

4. Investment costs related to RES

So far (with the exception of certain SEZs), the costs of a new investment project related to expenditure on RES to be used for a production facility's own purposes could not be included in eligible costs. Effective 2023, firstly, the qualitative criterion related to these expenses has been relaxed; secondly, the revised template application for state aid decision suggests that once certain conditions are met, such expenses will be eligible costs.

5. The arm's length nature of the acquisition of non-real property assets 

With regard to assets other than real property, acquired by enterprises in connection with a new investment project (including under a finance lease), the new PIZ Regulation introduces the requirement that the transaction must be at arm's length, regardless of whether the assets are acquired from a related party or not.

If your company is considering a new investment, including the expansion of an existing plant,  contact us. We will provide you with detailed options for obtaining tax exemption under the amended legislation. 


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Magdalena Szwarc

Tax adviser (Poland)

Senior Associate

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