Investment incentives in municipalities – exemption from property tax
One of the main incentives available for businesses in municipalities is exemption from local taxes and fees. The Act of 12 January 1991 on local taxes and charges (the “Act”) empowers municipal councils to determine the tax rates and the basic exemptions from fees and taxes. Exemption form property tax is of prime importance for entrepreneurs.
Subject of property tax
Property tax applies to:
- land,
- buildings or their parts,
- structures or their parts connected with conducting business activities.
Exemption form property tax under the de minimis rule
The municipal council may introduce a tax exemption in the form of a resolution which constitutes an aid programme with the use of solutions based on the EU regulations on de minimis aid, whereby the aid is exempt from the notification requirement; however, the draft resolution must be communicated to the President of the Office of Competition and Consumer Protection (OCCP).
The basic legal act regulating the de minimis aid is the Commission Regulation (EC) No 1998/2006 of 15 December 2006. On the application of Art. 87 and 88 of the Treaty on de minimis aid (Official Journal of the EU L.06.379.5), which allows this kind of aid to be granted also in the road transport sector.
Ceiling of the de minimis aid
This regulation determines the ceiling of de minimis aid at the level of 200 thousand euro or 100 thousand euro in the road transport sector for a single economic entity for three consecutive financial years. This aid is calculated by adding the aid obtained in the current year and the two preceding years, where the total cannot exceed 200 thousand euro (100 thousand euro in the road transport sector).