Newsletter - State aid and investment: The amended legislation

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Amendment to Act no. 561/2007 Coll. on investment aid 

The amendment introduces the automatic possibility to obtain corporate income tax credit for large investment projects exceeding EUR 200 million in industry or tourism.

If the applicant meets the criteria for the provision of aid under this Act and under other applicable legislation and the aid does not have to be notified to the European Commission, the Ministry of Economy or the Ministry of Transport (in the case of projects in tourism) will issue a decision approving investment aid within 15 days of the filing of the application.   

If the volume of aid exceeds the notification threshold, the Slovak authorities will issue the approving decision only after approval by the European Commission is obtained.

This means that projects meeting the condition of a minimum investment of EUR 200 mil and the application for tax credit only, will be able to benefit from a simplified approval process. 

Entry into force: 1 May 2014 

 

New state aid rules from 1 July 2014 

Following the commencement of the new programming period 2014 - 2020, key legislation in the field of state aid has been amended. The amendments of the following documents will also influence the provision of investment aid in Slovakia:

  1. Commission Regulation (EU) declaring certain categories of aid compatible with the internal market in the application of Articles 107 and 108 of the Treaty (General Block Exemption Regulation),
  2. Guidelines on regional state aid for 2014-2020,
  3. Regional aid map for 2014–2020,
  4. Decree of the Government of the Slovak Republic no. 481/2011 Coll. declaring the maximum intensity of investment aid and the maximum intensity of individual investment incentives.

The most significant change is the decrease of maximum intensities as follows:

Region

until 30 June 2014

from 1 July 2014

Western Slovakia

40%

25%

Central and East Slovakia 

50%

35%

 

New versions of the EC Regulation, and Guidelines, as well as other state aid documentation are available on the European Commission website: http://ec.europa.eu/competition/state_aid/legislation/horizontal.html

 

Amendment of the Decree of the Government of the Slovak Republic no. 481/2011 Coll. declaring the maximum intensity of investment aid and maximum intensity of individual investment incentives: 

The governmental decree that will enter into force on 1 July 2014, will divide Slovakia according to the unemployment rate into 3 zones, instead of the original 5 zones, and will amend the intensities as indicated in the following chart. 

  • zone A – districts with an unemployment rate higher than 135% of the average unemployment rate in the Slovak Republic,
  • zone B - districts with an unemployment rate higher than 100%, up to 135% of the average unemployment rate in the Slovak Republic,
  • zone C - districts with an unemployment rate up to 100% of the  average unemployment rate in the Slovak Republic.

Maximum intensity of investment aid:

Zone

Industry

Technology centre

Shared service centre

Tourism

A

35 %

35 %

35 %

35 %

B

35 %

35 %

35 %

35 %

C

25 %

25 %

25 %

25 %

                                                                                                     

Maximum intensity of the cash grant for the acquisition of non-current tangible and non-current intangible assets: 

Zone

Industry

Technology centre

Shared service centre

Tourism

A

15 %

20 %

0%

15 %

B

10 %

20 %

0%

10 %

C

0%

20 %

0%

0%

 

  Maximum intensity of the income tax credit:

Zone

Industry

Technology centre

Shared service centre

Tourism

A

35 %

35 %

35 %

35 %

B

35 %

35 %

35 %

35 %

C

25 %

25 %

25 %

25 %

 

Maximum intensity of subsidy for newly created jobs:

Zone

(per new  job)

Industry

Technology centre

Shared service centre

Tourism

A

6 000

8 000

6 000

6 000

B

4 000

8 000

6 000

4 000

C

0

8 000

6 000

0

 

Maximum intensity of real estate acquired for a discounted price:                                                                                                                     

Zone

Industry

Technology centre

Shared service centre

Tourism

A

35 %

35 %

35 %

35 %

B

35 %

35 %

35 %

35 %

C

25 %

25 %

25 %

25 %