Poland: Second-hand leased assets used in operations in special economic zones in the context of state aid for large enterprises
At the end of April this year, the Director of Tax Chamber in Katowice addressed the eligibility of principal instalments and interest instalments under a finance lease agreement for second-hand tangible assets for the state aid (file no. IBPBI/2/4510-101/15/MO).
The position taken by the Director of Tax Chamber in Katowice is clearly favourable meaning that the principal instalments and interest instalments under a lease agreement for second-hand tangible assets used in activities in special economic zones can be included in the basis for calculation of the tax exemption limit, as provided for in § 6(1) of the Regulation of the Council of Ministers of 10 December 2008.
Noteworthy, the following three conditions must be met to qualify the principal instalments and interest instalments under the lease agreement for aid available in the frame of SEZ:
1) the lease agreement is a financial lease and involves the enterprise's obligation to lease-end buyout;
2) the costs of lease are borne over the time set in a specific zone permit;
3) the leased tangible assets are not buildings and structures and are intended for use in a plant located in a special economic zone to perform the business activity specified in the permit.
If the tangible assets are leased under an agreement that meets all the criteria mentioned above, the newness requirement provided for in § 6(7) of the Regulation with respect to large enterprises will not apply. Pursuant to that provision, tangible assets purchased or manufactured by a large enterprise on its own must be new. However, the financial lease agreement is not the same as a sales agreement and there are no grounds for extending the newness requirement to the latter. The Director of Tax Chamber in Katowice agreed with that interpretation stating that as regards a financial lease agreement it does not matter whether the asset is new or used, even if it is taken for lease by a large enterprise.
To sum up, the costs borne on account of financial lease of tangible assets (principal instalments, interest instalments) can be included in the basis for calculation of the tax exemption limit, even if the assets leased by a large enterprise are second-hand (e.g. machinery, production lines).
With this in mind, we recommend re-calculating your tax exemption limit. Our tax advisers would be glad to examine this issue for you. Rödl & Partner's offices in Cracow, Gdansk, Gliwice, Poznan, Warsaw and Wroclaw can offer professional tax and legal advice in Poland on special economic zones and other areas of your specific interest.