Starting November 22, 2021, businesses can apply for subsidies for the purchase of electric cars. The subsidy will cover 37 electric car models available in Poland.

Applications for co-financing the purchase of an electric car can be submitted until the end of September 2025 or until the pool of PLN 700 million is exhausted.

Below are the conditions for using the subsidies.

1. Purchasing a zero-emission vehicle – who:

Category I – natural persons
Category II – entities other than natural persons, including entrepreneurs

• Public finance sector entities, within the meaning of the Act of 27 August 2009 on public finances (i.e. Journal of Laws of 2021, item 305);
• Research institutes within the meaning of the Act of 30 April 2010 on research institutes (i.e. Journal of Laws of 2020, item 1383);
• Entrepreneurs within the meaning of the Act of 6 March 2018 – Entrepreneurs’ Law (i.e. Journal of Laws of 2021, item 162);
• Associations within the meaning of the Act of 7 April 1989 – Law on Associations (i.e. Journal of Laws of 2020, item 2261);
• Foundations within the meaning of the Act of 6 April 1984 on Foundations (i.e. Journal of Laws of 2020, item 2167);
• Cooperatives within the meaning of the Act of 16 September 1982 – Cooperative Law (i.e. Journal of Laws of 2021, item 648);
• Individual farmers within the meaning of the Act of 11 April 2003 on shaping the agricultural system (i.e. Journal of Laws of 2020, item 1655, as amended);
• Churches and other religious associations and their legal entities;
• Religious organizations whose legal status is regulated by laws on the relationship between the state and churches and other religious associations, operating within the framework of these churches and associations.

2. What categories of zero-emission vehicles are we talking about:

Categories M1 , N1 and L1e-L7e

3. Deadline and form of submitting applications:

The program will be implemented in 2021-2026, including:

• contract period until December 31, 2025
• the period of expenditure of funds until June 30, 2026.

Applications for funding in the form of grants should be submitted between November 22, 2021 and September 30, 2025 (but not longer than until the allocation funds are exhausted).

/ If the allocation of funds is exhausted before the deadline for submitting applications, information about the impossibility of submitting applications will be posted on the NFOŚiGW website. /

4. Funding value:

CATEGORY M1

• a subsidy of no more than PLN 18,750
  OR
  a subsidy of no more than PLN 27,000 in the case of a declaration of an average annual mileage of over 15,000 km
• The purchase cost (vehicle price) of a zero-emission vehicle cannot exceed PLN 225,000

CATEGORY N1

• a subsidy of up to 20% of eligible costs, but not more than PLN 50,000
  OR
• subsidy up to 30% of eligible costs, but not more than PLN 70,000 in the case of a declaration of an average annual mileage exceeding 20,000 km

CATEGORY L1e – L7e

subsidy up to 30% of eligible costs, but not more than PLN 4,000

/If the applicant applies for funding for more than one vehicle, the purchase or leasing of each vehicle is treated as a separate project./

5. Net or gross – how to calculate?

The above amounts are net, for entities that can deduct 100% VAT. Therefore, if the car is used for private or business purposes, where 50% VAT can be deducted, the prices quoted include the deductible tax. For businesses that are not eligible to calculate value added tax, the prices quoted will be gross.

6. Funding conditions:

1. funding will not be granted for projects whose costs were co-financed from public domestic or foreign funds, in particular from the European Union budget;
2. the purchased/leased zero-emission vehicle must be new;
3. a purchased/leased zero-emission vehicle must be marked during its durability period;
4. the durability period is 2 years from the date of completion of the project (purchase of the vehicle), and in the case of leasing this should be understood as the date of handing over the new vehicle to the beneficiary (User) for use or use and collection of benefits based on the vehicle handover protocol;
5. the zero-emission vehicle that is the subject of the subsidy will be registered in the territory of the Republic of Poland for at least 2 years from the date of completion of the project;
6. the registration of a zero-emission vehicle must be made in the name of the owner of the vehicle who is the beneficiary of funding under this program (in the case of leasing, the vehicle may be registered in the name of the beneficiary or the leasing company with which it has a leasing agreement);
7. the zero-emission vehicle covered by the subsidy must be insured against damage, destruction and loss due to collisions, accidents, damage by third parties and theft, including third-party liability insurance and comprehensive insurance (auto casco), at least during the durability period;
8. in the event of a breach of the obligations referred to in points 5 to 7, the subsidy, together with the interest due, shall be repaid under the terms specified in the subsidy agreement; the agreement may specify, in particular, the proportionality of the repayment and cases of non-repayment of funds;
9. the payment of the subsidy may be conditional on the establishment of a security for the repayment of funds;
10. co-financing may be granted for a project whose implementation was completed before the date of submission of the application, subject to point 13);
11. the subsidy will be paid only in the form of a refund after purchasing the vehicle or in the form of an additional payment to the fees set in the leasing agreements (initial fee and transfer fee) after signing the vehicle handover protocol;
12. if the subsidy concerns a zero-emission vehicle of category M2 or M3 and constitutes public aid, the provisions of the Regulation of the Minister of the Environment of 21 December 2015 on detailed conditions for granting horizontal public aid for environmental protection purposes (Journal of Laws item 2250) regarding aid for investments enabling the reduction of pollutant emissions, in a situation where EU environmental protection standards have not been established, apply to it;
13. A project involving the purchase/lease of a vehicle of category M2 or M3 cannot be commenced before the date of submission of the application for funding. Commencement of the project is understood as the conclusion of a vehicle purchase/lease agreement;
14. if the applicant is a natural person not conducting business activity, he or she may receive one subsidy covering one zero-emission vehicle;
15. funding to cover the initial fee and transfer fee specified in the zero-emission vehicle leasing agreement may be granted if the leased item has not previously been subsidised under the programme in question;

7. List of documents required to assess the funding application:

• Documents specifying the legal status of the Applicant (depending on the legal form of the business activity), for example:

– extract from the register of business activities (in the case of a natural person conducting business activities),

– current contract, statute, articles of association,

– other documents specifying the legal status of the Applicant,

accordingly according to the Applicants' Map, which is an Annex to the "List of required documents ...".

• Authorization/power of attorney to sign the application for funding (if the application is not signed by the body designated to represent the applicant).

• A set of required declarations from the Applicant, which is part of the funding application form submitted via the Funding Application Generator (GWD):
– A declaration that the information contained in the funding application is accurate and legal.
– A declaration that, within the last 3 years prior to the date of submission of the application, the National Fund for Environmental Protection and Water Management has not terminated or terminated any funding agreement with the applicant – except for termination by mutual consent – ​​for reasons attributable to the applicant.
– A declaration that there are no arrears of public law liabilities to the National Fund for Environmental Protection and Water Management, or to other bodies or entities.
– A declaration that there are no arrears of civil law liabilities to the National Fund for Environmental Protection and Water Management.
– A declaration that the project is not financed from other public domestic or foreign funds, in particular from the European Union budget, for any Vehicle for which funding will be granted under the submitted application.
– A declaration that the vehicle(s) for which increased funding is requested will have an average annual mileage consistent with the terms of the “Mój elektrik” Priority Program (if applicable).
– A declaration in which the Applicant undertakes not to sell the vehicle subject to funding for at least 2 years from the date of completion of the project.
– A declaration that throughout the Project Durability period, each vehicle subject to funding will:

1) registered in the territory of the Republic of Poland;
2) had valid third party liability insurance and comprehensive insurance;
3) was driven on public roads and had a current, positive technical inspection;
4) marked with a sticker informing about the subsidy – in accordance with the template established by the National Fund for Environmental Protection and Water Management.

– A declaration of ensuring that the odometer reading has been entered into the Central Register of Vehicles and Drivers as of the last day of the purchased Vehicle's service life.
– A declaration of familiarity with the terms and conditions of the "My Electrician" Priority Program in force on the date of application submission.
– A declaration of VAT eligibility in accordance with the actual circumstances:

a) A declaration that VAT is not an eligible cost and the applicant has the legal right to deduct the entire amount (100%) of input tax from output tax, in accordance with the provisions of the Goods and Services Tax Act.

b) Declaration that the Applicant:

• is not a VAT payer,
• VAT is an eligible cost and the applicant has no legal right to deduct the entire amount (100%) of input tax from any part of the output tax, in accordance with the provisions of the Goods and Services Tax Act.

c) Declaration that the Applicant:

• is a VAT payer,
• VAT is an eligible cost and the applicant has no legal right to deduct the entire amount (100%) of input tax from any part of the output tax, in accordance with the provisions of the Goods and Services Tax Act.

(in this case, an individual interpretation should be presented, referred to in the Act of 29 August 1997 - Tax Ordinance, confirming the impossibility of deducting VAT in connection with the implementation of the Project; Individual interpretations are not submitted by: legal entities and organizational units operating under the provisions of the Act of 17 May 1989 on the relationship between the State and the Catholic Church in the Republic of Poland (i.e. Journal of Laws of 2019 item 1347, as amended), acts relating to other churches operating on the territory of the Republic of Poland and the Act of 17 May 1989 on guarantees of freedom of conscience and religion (i.e. Journal of Laws of 2017 item 1153), as well as associations and foundations established by these entities).

d) Declaration that the Applicant:

• is a VAT payer,
• VAT is an eligible cost in the amount of 50% of the input tax on the output tax, in accordance with the provisions of the Act on Tax on Goods and Services.

Declaration on the implementation of the project in accordance with the provisions of the Act of 11 September 2019 - Public Procurement Law (Journal of Laws of 2019, item 2019, as amended), hereinafter referred to as the "Public Procurement Act", in the event that it awards contracts referred to in Art. 2 of that Act and is the contracting authority referred to in Art. 4, 5 or 6 of the Public Procurement Act (if applicable).

• Applicant's financial documents for the last three years preceding the year of submitting the application for co-financing and for the completed reporting period of the current year (depending on the legal form of the business), for example:
– financial statements (profit and loss account, balance sheet and cash flow statement),
– statistical report according to the F-01 template (or other),
– Applicant's annual tax return,
– current Multiannual Financial Forecast (MFF) together with the opinion of the Regional Chamber of Audit (RIO),
– other financial documents, as appropriate, according to the Applicants' Map, which is an Annex to the "List of required documents..."

This alert is for informational purposes only and does not constitute legal advice.

Mateusz Grosicki

Attorney, partner
+48 506 367 109 | m.grosicki@kglegal.pl