In response to the coronavirus pandemic, the Ministry of Industry and Trade has submitted an amendment to the Government Decree on Investment Incentives aiming to provide more substantial support for investments involving selected strategic products.
A draft amendment to Government Decree No. 221/2019 Coll. is now subject to a comment procedure reduced to ten working days in accordance with the government’s legislative rules.
Changes to parameters for investment projects in manufacturing
The most crucial change is the waiver of an obligation to invest in manufacturing activities with a higher added value where projects involve strategic products as defined in Appendix No. 2 to the decree, such as protective and medical supplies/tools and pharmaceutical products.
Moreover, all investment projects involving the production of strategic products as defined in the above appendix should be regarded as strategic investment projects, i.e. projects that may receive material support to acquire tangible and intangible fixed assets of up to 10% of the investment value, without having to meet the requirements normally applicable to strategic investment projects such as the minimum investment amount and the minimum number of new jobs (i.e. CZK 500 million and 500 new jobs).
In addition, for all investment projects in manufacturing, the minimum investment amount to acquire tangible and intangible fixed assets should be reduced from an original CZK 100 million to CZK 80 million (also resulting in a change of the minimum share of machinery to CZK 40 million).
Relief for small and medium-size businesses
Support for small and medium-size businesses should also change. The above mentioned minimum required investment amount should be reduced to a half (medium-size businesses) or a quarter (small businesses). The option to further reduce the minimum investment amount to a half where an investment is carried out in districts with high unemployment rates, state-supported regions and privileged industrial zones should remain in application. In such situations, the minimum required investment amount may drop to up to CZK 10 million for small businesses and CZK 20 million for medium-size businesses.
Another advantage offered to small and medium-size businesses is the reduction of the required number of newly created jobs to 50% within projects investing in technology centres and strategic services centres, i.e. 10 - 35 jobs according to the type of a centre.
Karin Osinovákosinova@kpmg.cz+420 222 123 747
Eva Lenzováelenzova@kpmg.cz+420 733 591 358