New legislative aid for the Polish shipyard industry

12.08.2016 r.

New legislative aid for the Polish shipyard industry

Poland will provide new forms of aid to its shipyards, thanks to the new Act on Stimulating the Shipping and Complementary Industry.

The main purpose of the act is to encourage the growth and development of Polish shipyards by introducing specific legal, organisational and financial measures aimed at supporting Polish maritime sector, and through establishing new R&D institutions dedicated to shipbuilding.

These goals will be realised by implementing a range of instruments from various areas, such as:

• fiscal regulation – by introducing a 0% VAT rate for the production and import of parts and equipment for a wide selection of marine vessels, as well as introduction of a new 1% flat-rate tax chargeable for the actual value of the manufactured stock;
• administrative law – by extending the Special Economic Areas, which are projected to encompass properties destined for shipbuilding and complementary industries;
• European funds – by allowing the shipyard industry sector access to the European aid, including technological credits.

The author of the new legislation – Ministry of Maritime Affairs and Inland Navigation – claims that the introduction of these legal mechanisms will have an invigorating effect on the Polish maritime sector, improving its position in the international shipbuilding market, where strong competitors, in particular those from the East Asian countries, currently dominate the scene.

The new Act provides for development of new R&D facilities, which will be put in charge of designing new types of vessels, with a particular focus on pro-ecological innovation. The Ministry estimates that the new legislation will create 3 000 new jobs, which would be a welcome change of trend after the rise in unemployment in the maritime industry, stemming from several Polish shipyards filing for bankruptcy in the last decade.

The legislative measures have been declared by the government as fully compliant with the EU regulations. The Ministry has admitted however, that the wording of the Act itself was not consulted with the European Commission. This of course raises questions as to how will Europe’s main body react to the introduction of the new regulations, especially taking into consideration Poland’s previous issues with providing state assistance to its shipyards.

The Act shall enter into force on 1 January 2017. Above concerns aside, hopefully it will create a realistic and long awaited opportunity for the Polish businesses and make them more competitive in comparison with their foreign couterparts.

You can view the Polish version of the Act here.