The basic form of public aid offered to entrepreneurs in LSEZ is exemption from income tax regarding income gained from business activity conducted in the zone's area. The aid is conditional upon obtaining a permit issued by the zone's managing body.
The amount of public aid depends on investment outlays incurred by an investor in conjunction with a new investment as well as on the size of enterprise.
The maximum permissible amount of public aid is equal to 40% of investment outlays, whereby this amount is increased by 10 percentage points for medium-size enterprises and by 20 percentage points for small enterprises.
Investment outlays - include capital expenditures qualifying for public aid or two-year labour costs incurred in conjunction with new employees and connected with a new investment realised in the zone's area.
Capital expenditures qualifying for public aid are investment costs decreased by input VAT and excise duty (if these may be deducted based on separate regulations), incurred in the zone's area during the term of permit, covering:
Two-year labour costs incurred in conjunction with new employees cover gross payroll costs increased by obligatory contributions such as social security contributions paid by an entrepreneur from the moment of employing new employees.
Corporate and personal income tax exemption is applicable starting from the month in which an entrepreneur incurs investment outlays or labour costs until the exhaustion of public aid.
Different forms of public aid such as EU subsidies, exemption from local taxes on real property and buildings, grants and borrowings offered to entrepreneurs by local employment agencies for the creation of new jobs and training the unemployed are aggregated and decrease the amount of public aid available for a given entrepreneur.
