Investment incentive – state support for the manufacturing industry
Besides the programmes financed from the EU fund, the private sector can use the support from other public sources including state programmes. For huge investments into production, the most profitable form of support are so-called investment incentives.
An investment incentive is support provided according to law No. 72/2000 Coll. especially in the form of a tax abatement, also complementarily for creating new work, places, trainings and requalification or a land transfer. It is possible to apply the investment for investment actions in the manufacturing industry or investments into the technological centres and centres of strategic services.
Long-term, the tendency is to reduce the support for the manufacturing industry and the incentive scheme should be focused more on investments with a higher added value. Let´s look at the conditions from which the investors can receive the incentive for expanding or establishing the new production today.
The condition is a minimum investment of 100 million CZK into tangible fixed assets, from that a minimum of 50 million CZK must go into new machinery, in the chosen regions a minimum 50 million CZK investment, from that investment (50 million CZK), 25 million CZK must go into new machinery. In connection with a project, the investor has to create and staff a minimum of 20 new work places, the conditions have to be filled by the end of 3 years. It is necessary to be careful before starting the project– it cannot start before submitting the request for the incentive.
Provided that the investor fulfils all of the legal conditions, he can apply the income tax abatement over the following 10 years, possibly with the above-mentioned additional incentives in 25 – 45 % of the amount of the incentive according to the company´s size. It is possible to submit the request continually, the support is provided in all of the Czech regions, excluding the city of Prague. The incentives are for Czech and foreign companies, and previously or newly established companies.
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