Grants & Incentives news

Grants & Incentives news February 2014

• The EPSILON Subsidy Programme • Changes in Investment Incentives

Grants & Incentives news Deloitte Czech Republic



The EPSILON Subsidy Programme In 2014, the EPSON subsidy programme for the support of applied research and experimental development will be announced. The programme follows up on the ending TIP (arranged by the Ministry of Trade and Industry) and ALFA (arranged by the Technology Agency of the Czech Republic) subsidy programmes.

The EPSILON programme will support the research and development of new products or routines including the production of prototypes and testing of their functionality. It will specifically support payroll costs, purchase of material, overhead costs and depreciation of the equipment used for research and development. Projects can be initiated starting from 2015.

The below table shows the basic information on the EPSILON programme: Mediating entity:

Technology Agency of the Czech Republic

Subsidy recipients:

Businesses and research organisations.

Programme period:

2015 – 2025.

Total programme budget:

CZK 16,150 million

Maximum percentage of the subsidy:

60 % of project eligible costs.

Average amount of the subsidy for one project:

CZK 10 million

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Changes in Investment Incentives The 2007-2013 programming period having ended, the European Commission has prepared the new guidelines on state aid for the regions for the 2014-2020 programming period. As a result, numerous changes in relation to public financial support, and therefore also in the Investment Incentive Act, are being made. The most noticeable planned change is the lowering of the absolute ceiling of public financial support from the current 40% to 25% of the eligible costs. The reduction of the maximum public support will be applied in all regions of the Czech Republic except for Prague, which has already been excluded. Another significant change that is valid from 1 February 2014 is an increase in cash support for newly-created jobs in type I state-supported regions from the current CZK 50,000 to CZK 200,000 per newly-created job. At the same time, however, the number of state-supported regions is being reduced – the Jeseník region is no longer a type I region. The related changes in the Investment Incentive Act will be effective for decisions on binding commitments to grant investment incentives made after 1 July 2014. Therefore, if you are planning to invest in the near future and you want to file a request for an investment incentive to be granted, we recommend that you consider doing so by the end of February 2014 at the latest, so that the current legal conditions, ie a maximum support of 40%, can be applied to it. Also, if your company is planning to invest in a state-supported region and has a chance of receiving high support for newly-created jobs, use the opportunity to receive the increased cash support.

New Resolution of the Government of the Czech Republic No. 344 on the definition of state-supported regions, of 15 May 2013 (hereinafter the “Resolution”) came into force on 1 January 2014. Regions are classified, for investment incentive purpose, into type I. regions (minimal sum of investment amounting to CZK 50 million), and type II. regions (minimal sum of investment being CZK 100 million). Based on this Resolution, the reduced minimal required investment of CZK 50 million will only be valid for newly-defined geographical areas, namely 57 municipalities with an extended scope of activity (map on the next page); the number of supported geographical areas has therefore been reduced. The new classification of municipalities with an extended scope of activity has caused districts such as Třebíč, Kroměříž, Nový Jičín, Blansko, Tachov, Česká Lípa or Jablonec n. Nisou to be excluded from the reduced minimal investment of CZK 50 million. For these districts, the minimal investment required to meet the conditions of an investment incentive will be CZK 100 million (unless they are included in the territory of a municipality with an extended scope of activity).

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Minimum Investments – Per Region Rumburk

• The EPSILON Subsidy Programme

Frýdlant

Varnsdorf

Děčín

LIBEREC

Nový Bor

Teplice

• Changes in Investment Incentives

ÚSTÍ nad Labem

M os t

Chom utov

Aš

Roudnice nad Labem

M ělník

Karlupy nad Vltavou

Slaný

KARLOVY VARY

S okolov

Podbo řany

K ladno R akovník Mariánské Lázn ě

Mnichovo Hradišt ě

Lovosice

Louny

Žatec

Cheb

Litom ěřice

Kada ň

Ostrov Kraslice

PRAHA

St říbro

Lysá nad Labem

Č eský Brod

P řelou č

Dob říš

Příbram Blovice

Sedl čany

Humpolec Nepomuk

Dom ažlice K latovy

Milevsko

Blatná Horaž ďovice

Tábor

S trakonice

Týn nad Vltavou

Vod ňany Vimperk

Prachatice

Havlíčk ův B rod

Pacov

Pelhřim ov

Pís ek Sušice

Chot ěboř

JIHLAVA

Vysoké Mýto

Ú s tí nad O rlicí Lanškroun Č eská T řebová

Poli čka Poli čka

S vitavy

Tel č Da čice

T řebo ň

Třebíč Moravské Bud ějovice

Trhové Sviny

Čes ký K rum lov Kaplice

Region I – minimum investment CZK 50 million Region II – minimum investment CZK 100 million Valid from 1 January 2014 Source: Map data © Czech Geodetic and Cadastral Authority

OLOMOUC

Přerov

Znojm o

N ový J ičín

Hranice

Byst řice pod Hostýnem

Valašské Mezi říčí

Holešov Šlapanice

Slavkov Bu čovice u Brna

Židlochovice Poho řelice

Bílovec

Pros tějov

Kyjov

Hustope če

Hodonín Mikulov

B řeclav

K rom ěříž

Fr

Frenštát pod Radhošt ěm

Rožnov pod Radhošt ěm

V s etín

Vizovice

Otrokovice ZLÍN

U hers ké Hradiš tě

Veselí nad Moravou

Luha čovice Uherský Brod

Orlová

K a r v in á

Haví řov

Odry

Lipník nad Be čvou

Bohumín

OSTRAVA

Konice

V yš kov

Krava ře Hlu čín

Vítkov

Mohelnice Uni čov Moravská Šternberk T řebová Litovel

Nám ěs ť Rosice nad BRNO Oslavou Ivan čice Moravský Krumlov

Opava

Rýma řov

Ku řim

J indř ichův Hradec

B runtál

Š um perk

Záb řeh

Nové Město na Žďár nad Morav ě Boskovice Byst řice S ázavou nad Pernštejnem Velké B lans ko Tišnov Mezi říčí

Sob ěslav

Č ESKÉ BUD Ě JOVICE

Králíky

Žamberk

Holice

Litomyšl

Sv ětlá nad Sázavou

Vlašim

Votice

4

Krnov

nad Orlicí

Chrudim

B eneš ov

J es eník

R ychnov nad K něžnou Kostelec

Ř íčany Č áslav

Nové M ěsto nad Metují Dobruška

K utná Hora

PLZE Ň R okycany

P řeštice

Jarom ěř

PARDUBICE

K olín

Plzeň-m ěs to Horšovský Týn

N áchod

HRADEC KRÁLOVÉ

Nový Bydžov

Č ernošice

Ho řovice

Stod

Dv ůr Králové

Ho řice

Pod ěbrady

Kralovice

Ný řany

Trutnov

J ičín

N ym burk

Broumov

Vrchlabí Nová Paka

M ladá B oles lav

Brandýs nad Labem - Stará Boleslav

Jilemnice

Turnov S em ily

Neratovice

B eroun

T a c h ov

Železný Brod

Čes ká Lípa

Litvínov Bílina

Jablonec nad Tanvald Nisou

Valašské Klobouky

ýd

ek

-M

ís t

Frýdlant nad Ostravicí

Č eský T ěšín

T řinec

ek

Jablunkov


Contacts If these issues relate to your company, we would be happy to provide you with more detailed information. Feel free to contact us at any time.


Grants CZ Luděk Hanáček Antonín Weber Patrik Filusz

+420 246 042 108 [email protected] +420 246 042 394 [email protected] +420 246 043 152 [email protected]

Deloitte Advisory s.r.o. Nile House Karolinská 654/2 186 00 Prague 8 - Karlín Czech Republic Tel.: +420 246 042 500 Fax: +420 246 042 555

Grants and Incentives SK Martin Rybar +421 (2) 582 49 11 [email protected] Incentives Daniela Fotrová

+420 246 042 921 [email protected]

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/cz/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte’s approximately 200,000 professionals are committed to becoming the standard of excellence. © 2014 Deloitte Czech Republic

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