We would like to inform you that the amendment to Government Decree No. 221/2019 Coll., on the Implementation of Certain Provisions of the Investment Incentives Act (the “Amendment”) has been approved. We first informed you about the Amendment in the article from 4 November 2021 (please see the link). The Amendment will be effective from 1 January 2022. As a result of the Amendment, please see the changes in the eligibility conditions for strategic investment project incentives that will come into effect starting 2022:

  • an increase of the minimum limit on expenditure for acquisition of tangible and intangible fixed assets to CZK 2bn from the original 5bn, with at least 50% being spent on the acquisition of machinery, and
  • a decrease of the minimum limit for creation of new jobs from 500 to 250.

The above-mentioned conditions ​​will not apply to:

  • the manufacturing of strategic products for the protection of the lives and health of citizens.
  • investment projects carried out in the high-tech manufacturing sector and activities with higher added value, where research and development is carried out using so-called key enabling technologies. Key enabling technologies are defined as advanced materials technologies, nanotechnologies, advanced manufacturing technologies, biotechnologies, nanoelectronics and artificial intelligence technologies.

Such investment projects would be considered strategic investments regardless of the size of the investment or the number of newly created jobs.

Another novelty is the change in the size of cash grants (i.e., the direct cash grant capped at CZK 1.5bn). For the acquisition of assets for strategic investment projects in the manufacturing industry implemented in the Karlovy Vary region, Ústí nad Labem region or Moravian-Silesian region, the cash grant can equal up to 20% of the total eligible costs.

In other regions the cap remains unchanged, i.e. cash grants are capped at 10% of the total eligible costs.

If you are interested in this topic, we will be happy to discuss it with you.***

Petr Mašek, Denisa Holbová
PwC | Daňové a právní služby