Background information

The Financial Shield administered by the Polish Development Fund (PFR), has been put into use in April 2020 based on the Act amending the Act on the System of Development Institutions facilitating public support programme.

Under the PFR shield, 348,000 micro, small and medium-sized enterprises received partly non-refundable financial subsidies totalling almost PLN 61 billion by mid 2021.

Content of measure

The Prime Minister announced to have taken a decision on the government refraining from demanding income tax to be paid from the financial aid received under the Financial Shield schemes. Since the scheme has been put into use, the issue remained unclear, and for that reason it has been a source of much distress and anxiety among the entire business community in general, and the aid recipients in particular. The step recently taken allows to hope for appeasing the atmosphere somewhat. The Prime Minster argued that enterprises have had a difficult time through the pandemic, so giving back the part of the aid received due from the tax, could slow down their development. However, the necessary regulatory amendments need to follow, so that the declaration can materialise.

Use of measure

The decision is likely to translate into over PLN 40 billion liabilities cancelled, which represents at least PLN 8 billion in tax benefits for the companies, as the Chair of the PFR observed.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
Company / Companies	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Unknown	Unknown
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: N/A

Involvement

The decision is regarded to be taken with no consultation with social partners.

Views and reactions

No positions of social partners followed.

Sources

• 29 June 2021: Financial aid granted under the Financial Shield not to e taxed (www.bankier.pl)
• 29 June 2021: No tax on Financial Shield (www.gov.pl)
• 19 July 2021: Ordinance of the Minister of Finance, Funds and Regional Policy of 16 July 2021 on the waiver of income tax on income (revenue) from cancellation of a financial subvention financing or preferential financing granted by the Polish Development Fund (isap.sejm.gov.pl)