Polish court confirms zone exemption for COVID wage subsidies

Article 15gg support for zone employment

The case concerned a Polish company belonging to a corporate group and operating manufacturing activities under special-economic-zone permits. It received payments from the Guaranteed Employee Benefits Fund under Article 15gg of the COVID-19 Special Solutions Act to subsidise employee remuneration and social-security contributions after a pandemic-related decline in turnover.^[2][4]

Revenue recognition remained

The courts separated the revenue question from the exemption question. The subsidy was corporate-tax revenue: Article 12(4)(6a) did not exclude it as a reimbursement of non-deductible expenditure because the supported remuneration and contributions could themselves qualify as deductible employment costs under Article 15(1) of the Corporate Income Tax Act. The result was not complete tax neutrality at the revenue-recognition stage.^[2][3]

Functional connection supported exemption

Article 17(1)(34) exempts qualifying income earned from business conducted in a special economic zone under the relevant permit. The Wrocław court found the subsidy closely, functionally and inseparably linked to the permitted zone activity: it compensated a fall in turnover and preserved the jobs needed to continue that activity. The Supreme Administrative Court's dismissal of the authority's cassation appeal makes that outcome final in this case.^[1][2][3]

Case-specific limits

The judgment is relevant to multinational manufacturers that received Article 15gg support for Polish zone operations, but it does not create a general exemption for grants. A taxpayer must still establish that supported employees worked in the authorised activity, that the income has the required territorial and functional connection, and that the exemption remains within permit and statutory limits. Subsidies connected with ordinary taxable activity, or activity outside the permit, require separate allocation.^[2][3]

No new filing deadline

The decision introduces no new return, payment or amendment deadline. Groups with open years or pending disputes should compare their facts with the case, preserve payroll, permit, turnover and subsidy records, and review whether past corporate-tax calculations allocated the revenue and related costs consistently. The full Supreme Administrative Court reasoning was not retrievable, so this brief does not extend the final order beyond the lower-court reasoning it left standing.^[1][2]