Polish Investment Zone: can a machinery order start the investment too early?

A binding machine order can start an investment before delivery, invoicing or payment. For a business seeking Polish Investment Zone support, that distinction has financial consequences: filing the application, incurring eligible costs and starting the income-tax exemption are different events. Before approving a purchase, examine the contractual terms, reconstruct the chronology and identify the rules governing the support decision. Earlier favourable judgments do not necessarily apply to a new project. The disputes below show why the commercial facts and the legal regime must be considered together.

Law and source review: 10 November 2026.

Tax Legal Partner team

Can a machinery order start an investment for Polish PSI purposes?

A binding purchase commitment can start an investment before the first invoice, advance payment or delivery. Article 2(23) GBER looks at the earlier of construction work and the first legally binding commitment to order equipment, or another commitment making the investment irreversible. The commercial question is therefore when the business became committed to the purchase. It is not enough to identify the date on which the machine entered the factory.

Review the quotation, purchase order, supplier’s acceptance, incorporated terms and subsequent correspondence together. A document headed reservation may already require the business to buy a specified machine. A genuinely non-binding request for quotations can have a different effect. If procurement accepted an offer and the supplier acquired a contractual right to payment, a longer agreement signed by the board later may simply confirm an existing commitment. The authority of the person ordering and the effect of acceptance also matter.

No advance payment does not mean no commitment. Deferring payment for several months leaves a binding obligation in place. Nor is a small cancellation charge a universal safe threshold. A condition precedent or cancellation right requires analysis of the whole arrangement: wording about a possible withdrawal does not automatically mean that work has not started. The actual legal effect must match the proposed investment timetable.

Land purchases and preparatory steps, including permits and feasibility studies, are distinguished from the start of works. However, everything before production is not necessarily preparation. Commissioning an engineering assessment differs from committing to a production line made for the plant. Describe what the supplier must deliver, what the purchaser must pay and when those obligations arise. Internal labels do not change commitments towards an external supplier.

How do a PSI application, support decision and eligible cost differ?

The application seeks aid and is relevant to the incentive-effect assessment under the applicable scheme. The support decision defines the permitted activity, territory, period and conditions. Eligibility of expenditure requires a separate examination of the cost category, timing and other requirements. A further question is when exempt income can first be recognised. Passing one of these tests does not resolve the others.

Article 6 GBER includes the general application-before-start model and a distinct provision for certain tax measures based on objective criteria without further state intervention. The application rule should therefore not be repeated as though it applied identically to every form of state aid. Identify the scheme governing the particular PSI project. Calling support a tax relief does not justify assuming that the Polish application and decision procedure can be skipped.

Submitting the application does not automatically open the eligible-cost period. The Polish investment-support legislation links the definition to the validity period of the decision; the implementing regulation, the decision’s conditions and the type of expenditure must also be considered. Entering an earlier project start in the application form does not itself change those requirements. Later recognition of an asset cannot be assumed to move an earlier cash payment into a later period.

Consider an illustrative timeline: an application in May, a machine order and initial payment later that month, a decision in June, a further payment after the decision and commissioning in July. Analyse the start of works, the pre-decision payment and the later payment separately. July commissioning does not erase the earlier questions. This is a method of assessing a timetable, not an assurance that the illustrative expenditure qualifies.

A workable investment budget records the binding commitment, application, decision, payment, fixed-asset recognition and decision’s completion deadline in separate fields. Each date answers a different legal question. Procurement, accounting and tax teams need that common chronology before orders and payments are approved.

Eesti Pagar: later approval does not repair every early order

In Eesti Pagar, C-349/17, decided on 5 March 2019, the CJEU considered equipment ordered before the aid application. An unconditional, legally binding commitment was decisive, irrespective of potential withdrawal costs. A purchaser’s expectation that it could abandon the purchase if necessary did not replace examining the commitment it had actually made.

The judgment also addressed reliance on the national granting authority. An authority that incorrectly applies the conditions of the exemption regulation cannot thereby create legitimate expectations that the aid is lawful. The Court examined recovery of incorrectly granted aid. For the business, subsequent acceptance of a project is therefore not a complete answer if an earlier commitment already breached a condition of support.

This judgment concerned the earlier Regulation 800/2008. It did not decide every condition of today’s Polish Investment Zone or the commencement of the Polish CIT exemption. Its practical relevance lies in binding orders and the limits of reliance on an incorrect grant. A current investment still requires examination under the applicable GBER provisions and the relevant Polish scheme. Historical reasoning must be used with its legal context intact.

Payments after application but before the decision: the adverse 2025 ruling

In ruling 0111-KDIB1-3.4010.564.2025.2.DW, issued in December 2025, a company was developing a new production hall and purchasing equipment to increase capacity. It applied for support in October 2024 and received the decision in July 2025. Some expenditure was paid between those events. The company argued that completion of construction and subsequent fixed-asset recognition would allow the earlier expenditure to be included.

KIS rejected that approach. It focused on actual cash expenditure and the requirement that expenditure fall within the decision’s validity period. Recognising the building as a fixed asset after the decision did not move earlier payments into that period. A project schedule disclosed in the application did not independently settle their eligibility.

This is a different issue from starting works too early for the incentive effect. The order’s timing and the payments contributing to the aid ceiling require separate answers. Once an application has been sent, the business should not treat every following invoice as eligible. Check the consequences for the particular category before payment, rather than assuming that an accounting entry can later change when the money was spent.

For a project paid in stages, keep the payment schedule alongside the contracts and decision. Do not treat the whole purchase as having one date simply because it ultimately becomes one fixed asset. The reasoning of an individual ruling must still be matched to the facts; it is not a substitute for checking the conditions of another investor’s decision.

Two favourable NSA judgments under the earlier rules

The final judgment of 16 April 2024, II FSK 881/21, concerned a decision from 2019 and implementation beginning in January 2020. In the integrated existing plant described, the NSA rejected the authority’s requirement to wait for income generated specifically by the new investment. It applied the legislation then relevant, including section 9 of the 2018 Regulation. Income still had to concern activity and territory covered by the decision; this was not an exemption for unrestricted company income.

KIS subsequently issued favourable ruling 0111-KDIB1-3.4010.239.2020.14.JKU on 3 September 2024 in compliance with the court judgments, waiving independent legal reasoning. The WSA judgment, the NSA judgment and that ruling form one case history. Counting them as three independent confirmations would exaggerate the support for a new project. The favourable result nevertheless matters: the annulment rested on substantive reasoning, not merely a procedural defect.

In the second final judgment, II FSK 683/24 of 7 November 2024, the project also increased an existing plant’s capacity. The NSA upheld the favourable outcome under the 2018 Regulation. It expressly distinguished the 2022 Regulation and its rule referring to the investment-completion deadline; transitional provisions meant that the newer rule did not apply to that decision.

A later clerical correction to the designation of the issuing authority did not change the merits. For a company considering reliance on either judgment, the starting point is its own decision and governing provisions. Similar machinery or the same business sector cannot compensate for a different legal regime.

The warehouse ruling reveals a real dispute about earlier decisions

Ruling 0111-KDIB1-3.4010.146.2026.1.PC of 26 May 2026 concerned an expanded plant, including a high-bay warehouse, machinery and integration with existing production. The company held a decision from 2021 and asked about exemption from the first eligible costs. KIS rejected the position, emphasising income to which the new investment contributed. For the warehouse, it referred to income in whose generation the warehouse participated.

That ruling does not establish that ordering a machine breaches the incentive-effect requirement: it addressed a different question. Equally, the favourable judgments on the commencement of exemption under earlier decisions should not be omitted. Read together, these materials reveal a genuine dispute. Identify the applicable wording of the Act, the regulation retained by transitional provisions, the decision’s date and the integration of the new project into the existing plant.

A warehouse illustrates the underlying business difficulty. It may produce no separate sales invoice while enabling additional deliveries of the factory’s goods. The investment description should explain material flows, bottlenecks in the old infrastructure and how the new building is used. Allocating costs to a warehouse does not by itself prove entitlement to exempt a stated amount of income. Absence of separate storage-service revenue does not by itself mean no contribution to production either.

The newest ruling can concern an older decision, and an earlier judgment can apply different statutory wording. A tax model should explain those distinctions. Selecting one recent reference and treating it as a universal answer hides the uncertainty rather than resolving it.

For new decisions, the first transfer is not the general starting point

Under section 9(1) of the Regulation of 27 December 2022, support based on investment costs starts in the month in which the investment-completion deadline specified in the decision expires. The separate exception refers to aid based on creating new jobs under section 5(6). It is not a general machine-purchase exception. Earlier proceedings and decisions require examination of the transitional rules.

Boards therefore need separate forecasts for expenditure and use of the tax exemption. A cost may affect the aid ceiling while commencement of support follows another rule. The completion deadline becomes a financial-model input, rather than merely an organisational milestone. This still does not exempt every source of company income: activity, territory, connection with the investment, the aid limit and the remaining conditions require analysis.

Distinguish commissioning individual assets from the overall completion deadline stated in the decision. A machine may operate earlier without independently bringing forward investment-cost support. Changing an internal completion forecast does not amend the decision. If the schedule becomes unrealistic, assess the conditions and consequences of a formal amendment. Do not calculate tax as though that amendment had already been approved. Ongoing investment-maintenance obligations must be monitored separately.

What to check before approving the purchase

The review should cover the entire purchasing process, including offers, acceptance, supplier confirmations, cancellation terms, amendments, payments and the application file. In a staged purchase, establish the first binding commitment and the project scope it covered. Calling it a preparatory stage internally does not alter its contractual effect.

A cost schedule should separately identify commitment, payment, recognition and the proposed eligibility treatment. Where expenditure has already occurred, reconstruct the facts and assess realistic next steps. A later amendment, returned advance or renamed project does not automatically erase a prior commitment. Any proposed solution must reflect what actually happened legally and commercially.

Our investment-relief advice combines contractual review with the project schedule and tax treatment. The result is a map of legally significant dates, a cost assessment and a clear explanation of which purchases require timing changes or further contractual clarification. It gives procurement, finance and the board a shared basis for decisions. The service team’s contact details and enquiry form appear below.

Further reading on this area: Polish Investment Zone: preparing the support decision before investment.