In the next few days, the first applications of large companies for refunding their business activity within the so-called "Financial Shield" are expected. The formal introduction of the program for these beneficiaries still depends on its notification by the European Commission. However, submission of the initial application is already possible - detailed qualification and refunding rules will be provided once the program is launched.
Micro-enterprises and small and medium-sized enterprises (SME) may already submit their applications.
Our tax experts have thoroughly analyzed the regulations coming into force and are ready to provide you with comprehensive support at various levels to maintain your business continuity:
- we will indicate most effective instruments within the Financial Shield,
- we advise on how to effectively use the Financial Shield in the course of your business activity,
- we will help you complete and submit the necessary applications, minimizing the risk of their rejection.
The aid program is directed to over 670,000 Polish enterprises. Total amount of support is estimated at PLN 100 billion, which in the government's opinion is about to save from 2 to 5 million work places.
The funds from the Polish Development Fund (PFR) are intended to be provided to companies in the form of subsidies (preferential loans that may be partially redeemed) in order to limit negative effects of slowdown of the Polish economy and strengthen Polish companies. The Financial Shield for micro-enterprises and SME includes participation banks.
Financial Shield’s assumptions:
Who will benefit?
1. Micro-enterprises, SME
- The Beneficiary of the support is the entrepreneur:
a. who has a tax residence in the European Economic Area,
b. who is registered on the territory of Poland (economic activity registered on the territory of Poland in the National Court Register or Central Records and Information of Business Activity - CEIDG) and
c. whose main beneficial owner within the meaning of Article 2 (2) (1) of the AML Act does not have tax residence in a tax haven.
IMPORTANT: Exemption from this rule is possible if the entrepreneur and/or his main beneficial owner transfer their tax residence to the European Economic Area within 9 months from the day of granting financing under the Program.
Terms of applying (to be fulfilled jointly):
- decrease in entrepreneur's economic turnover (sales revenues) by at least 25% in any month after 1 February 2020 compared to the previous month or the same month last year due to distortions in economy market functioning as a result of COVID-19;
- at the date of submitting the application: conducting the business activity, no opened liquidation under the Code of Commercial Companies and no insolvency proceedings initiated/opened under the Bankruptcy Act or restructuring proceedings under the Restructuring Law;
- conducting the business activity as of 31 December 2019 and no arrears in the tax payments and social security contributions as of 31 December 2019 or at the date of submitting the application.
2. Large companies
Additional conditions for large enterprises:
- loss of the ability to produce or provide services or to receive products or services by ordering party due to the lack of availability of components or resources in connection with COVID-19;
- no payment for sales as a result of COVID-19 exceeding 25% of the amount due;
- due to disruptions in the functioning of the financial market - lack of access to the capital market or credit limits in connection with new contracts.
What are the financing conditions?
Detailed conditions for financial support and the entrepreneur’s obligations will be specified in the contract concluded with PFR (so-called subsidy contract).
General assumptions for micro-enterprises and SME:
- Using the received subsidy to cover costs of business operations (including payment of wages for employees, payment of rent or fulfillment of services under contracts concluded with contractors), excluding the allocation of funds for the acquisition of another entrepreneur.
- Permitted loan repayment: the possibility of using the subsidy for early repayment of loans up to a maximum of 25% of the subsidy value.
- Settlements with related entities: a total ban on allocating funds from the financial subsidy for any payments to the owner and to persons or entities related to the owner of the company.
- Repayment: on the conditions set out in the Program and subsidy contract.
General assumptions for large companies - the possibility of obtaining:
- Liquidity financing in the form of loans or bonds for a period of 2 years with an option of extension for a year amounting up to PLN 1 billion.
- Preferential financing in the form of preferential loans for a period of 3 years with the option of extension for 1 year, partly non-refundable and dependent on financial loss and maintaining employment, amounting up to PLN 750 million per entity.
- Investment financing in the form of acquired equity instruments (shares) on an arm's length basis or as part of public aid up to PLN 1 billion per entity.
What is the amount of financial support?
- For micro-enterprises - the amount depends on the number of employees and the amount of decrease in economic turnover and is up to a maximum PLN 324,000.
- For SME - the amount depends on the % of the entrepreneur's sales revenue in the FY 2019 and the scale of the decrease in economic turnover in connection with COVID-19, up to a maximum of PLN 3.5 million.
- For large companies - the amount depends on the form of financing.
What are the conditions for the remission of the subsidy?
The subsidy received by the entrepreneur can be redeemed up to 75% at the end of the 12th calendar month from the date of payment of the loan depending on the contract, for example:
- continuing business activity;
- loss on sales incurred by the entrepreneur;
- maintaining average employment over a 12-month period.
ASB - how can we help you?
Based on the financial data received from you (including the amount of economic turnover derived within two last months and in the analogous month of the last year), we will perform a preliminary analysis of the possibility of using specific variants of the Financial Shield by your company.
At a later stage, we will analyze the detailed data of your company, indicate conditions necessary to be fulfilled to benefit from the aid, and will help in completing and submitting applications.
If you are interested in using the solutions, please contact us.
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CEE VAT Compliance Manager
Tax Manager - Tax Adviser
Tax Manager - Tax Adviser
Tax Manager - Tax Adviser
Tax Manager - Attorney-at-law