The overarching aim of the Act is to protect Polish businesses, jobs and consumers against the negative consequences of COVID-19.

• Temporary, increased protection of Polish companies - at a time when their valuations have decreased - against hostile takeover by investors from outside of the EU and the OECD.
• Financial shield for local governments;
• Facilitations for contractors and orderers of public procurements;
• Subsidies to interest on bank credits for companies granted from the State Treasury;
• Easier access to credit holidays for those who have lost their source of income after March 13th - these are some of the effects of another package of laws which constitute the anti-crisis shield.
• Our main aim is to protect Polish businesses, jobs and consumers against the negative consequences of COVID-19.

The Act was prepared by the Ministry of Development, in cooperation with, for instance, Chancellery of the Prime Minister, Ministry of State Assets, Ministry of Finance, Ministry of Family, Labour and Social Policy, Ministry of Interior and Administration, Ministry of Justice, Bank Gospodarstwa Krajowego, Office of Competition and Consumer Protection, Polish Financial Supervision Authority, Social Insurance Institution and the Public Procurement Office.

We have developed our proposals by engaging in a dialogue with employees' representatives. We are also in constant contact with entrepreneurs and local governments. We propose solutions for the companies which face an unprecedented crisis, in order to help their survival and to protect the greatest possible number of jobs - says Deputy Prime Minister Jadwiga Emilewicz.

She stresses: – The anti-crisis shield is working. Including the financial shield, the total value of funds disbursed under the shield amounts to PLN 100 billion. However, we are monitoring the situation on an ongoing basis. We continue to work on new solutions as well as to improve the existing ones.  Another laws package.

The key solutions introduced under the Act:

• Time-constrained legal provisions against takeover to protect Polish companies against buyout by investors from outside of Europe and the OECD;
• budgetary support for local governments;
• facilitations with regards to tender procedures;
• subsidies to the interest on bank credits for companies, granted from the State Treasury;
• credit holidays for those who have lost employment or their main source of income after March 13th;
• support for maintaining jobs by adjusting the work market to the challenges caused by COVID-19;
• tax aids, including the right to write off donations granted to, among others, homes for single mothers, dormitories, shelters for the homeless or social welfare homes.

Anti-takeover laws

We do not intend to scare off investors, but merely to protect Polish companies against hostile takeovers due to the worsened economic circumstances caused by the COVID-19 epidemic which may cause a particularly low valuation of companies. During the crisis, a number of companies may experience periodic difficulties and thus become an “easy target” for investors from outside the EU and the OECD. We wish to prevent that.

That is why we are introducing solutions, modelled for instance after the legal provisions recently adopted in Germany. These changes are also similar to the measures implemented by other European countries (e.g. France or Italy), as well as countries outside of Europe, in order to protect national companies in public interest.

The new rules for controlling buyout of companies will remain binding for at least 2 years. Transactions involving the purchase of a large number of shares (i.e. at least 20%) in such companies will be inspected by the President of the Office of Competition and Consumer Protection. The protection will apply to businesses whose revenue on the territory of the Republic of Poland has exceeded EUR 10 million during either of the two fiscal years preceding the buyout.

The regulation covers the businesses which play a key role in maintaining public safety, order and health, such as, for instance:

• conducting business activity related to: electrical energy, gasses, fuels, telecommunications, food processing, pharmaceuticals, chemicals and fertilisers, explosives, weapons and ammunition as well as technological products indented for military or police use;
• developers of software used in basic social services, such as: energy, fuels, water supply, cash supply, card payments, hospitals, prescription drug sales, transport and food supply;
• public companies.

In addition, the company introduces the groundwork for exchanging information on international investments between the EU Member States and the European Commission through a contact point.

Budgetary support for local governments

We are introducing security measures for local governments. Due to the COVID-19 pandemic, they currently experience lower income, due to, for instance, depleted taxes.

The package includes the following solutions, among others:

• Between June and December of 2020, doubling of the share of districts, including presidential cities, in the income generated though the management of State Treasury's real estate. Now, they will receive every second zloty instead of every fourth zloty.
• Introducing the possibility of including the factual decrease in tax income (from PIT, CIT, local taxes in 2020: property tax, farming tax, forestry tax, transportation tax, stamp duty, tax on civil law transactions, healthcare and local tax) in the imbalance in the current budget of the local government units as a result of COVID-19.
• In 2020, relieving the fiscal rule limiting the extend of debt by the amount of factual decrease in tax income (catalogue of taxes as indicated above), due to the COVID-19 epidemic.
• Introducing the possibility to postpone the payments made by the local government units with above-average tax income to the State Treasury. The instalments of the tax paid on the basis of the Act of 13 November 2003 on income of local governments for June and July of 2020 may be paid by the cities in equal parts between August until December of 2020. For instance, the total amount of two instalments of the tax due by the city of Wroclaw (tax due for June and July), i.e. PLN 15,514,367.00, or Warsaw (tax due for June and July), i.e. PLN 201,463,392.67, may be paid in equal parts between August and December of 2020.
• Increasing the flexibility of utilising the funds from the tax on alcoholic beverages in 2020. The financial assets under the fund may be allocated towards counteracting and limiting the consequences of COVID-19.
• In 2020, introducing the possibility of earlier payments of the instalments for education, levy, countervailing and regional parts of the general subvention, which will improve the liquidity of local governments. The cities will receive the following funds under the general subvention, for instance: Cracow: PLN 80,153,038.87, Gdynia: PLN 21,926,365.56, and Komorniki: PLN 2,435,789.77

Facilitations with regards to tender procedures

We allow for an easier implementation of tender procedures during the COVID-19 epidemic and improve the situation of public procurement contractors.

That is why we are introducing targeted changes with regards to public procurements, which allow to decrease the costs related to the participation of contractors in tender procedures, and to improve their financial liquidity at the stage of executing a public contract.

The following measures were introduced in order to assist in achieving that purpose:

• Abolishing the obligation to request an obligatory guarantee in the case of tenders of an estimated value exceeding the EU limits.
• Introducing an obligation to pay the remuneration in parts or to issue advance payments in the case of public contracts concluded for a longer duration.
• Reducing the permitted amount of performance guarantee.
• Limiting the possibility to deduct contractual penalties from contractor's remuneration or other liabilities, and the possibility for the orderers to satisfy their claims from the performance guarantee.
• Supplementing the regulations providing for the possibility to make amendments to the contracts in response to the events caused by the COVID-19 pandemic. In the event where COVID-19 had a negative impact on correct execution of the agreement, both parties shall be obliged to introduce amendments to the public contract.

Examples:

Limiting the possibility to deduct contractual penalties
Due to the announced COVID-19 pandemic, the contractor has not completed the public procurement in due time. The orderer required a timely execution of the order, therefore it has included a considerable contractual penalty for failure to execute the order - PLN 200 thousand at the planned remuneration of PLN 1.2 million. Non-performance of the contract was not related to circumstances arising in relation to the COVID-19 pandemic, therefore the orderer has the right to claim contractual penalties from the contractor. The orderer could enforce the penalty by deducting it from the remuneration due to the contractor. In such event, the contractor would receive lower remuneration, which would negatively affect its financial liquidity. The exclusion of deductions included in the Act means that the contractor shall receive full remuneration for executing the order, however the orderer has the right to claim the contractual penalty only after the lapse of the time limit specified in the Act or by issuing a payment request.

Changes in the tender guarantee and the performance guarantee
The orderer launches a public procurement procedure for services with a total value of PLN 1 million. The existing legal provisions imposed an obligation on the orderer to request a guarantee from the contractors. Based on the amendment, the orderer now has the right to waive the tender guarantee also in the case of public procurement procedures with a total value equal or exceeding the EU limits. These solutions will simplify the procedure, relieve the contractors from additional obligations and reduce the costs related to participating in tender procedures.

Advance payment
A contractor has signed a public procurement contract for building a school. The total remuneration is PLN 6 million. The time limit for execution was set for 20 months after signing the contract. Following the new regulations, the orderer will issue advance payments to the contractor, for instance in the amount of PLN 2 million. Because of the that, the financial situation of the contractor will be stable, and the contractor will gain access to the financial assets required to perform the contract. The contractor will not have to seek external financing, which generates additional costs (i.e. interest, fees), which directly translate to the total cost of performing the contract.

Nearly PLN 0.6 billion from the State Treasury for interest subsidies

We will make it possible for all business owners who suffered from the effects of COVID-19 to receive credit with interest lowered by government subsidies. This solution is introduced as an answer to the increased demand for working capital credits, resulting from the risk related to financial liquidity of the companies. The total amount allocated towards the subsidies amounts to PLN 565 million, which - in accordance with the estimates - shall enable to generate credits in the total amount of PLN 32 billion.

The details of the proposed solution:

• Banks will grant credits to entrepreneurs who have experienced the negative impact of COVID-19; the interest on the credits will be subsidised by BGK from the State Treasury. In the current year, the total amount allocated from the State Treasury for that purpose will amount to PLN 296 billion, while in the next year - over PLN 271 million.
• These credits will be provided by banks which will enter into an agreement with Bank Gospodarstwa Krajowego. BGK will publish the list of the banks on its website. In order to execute the Act, BGK will establish an Interest Subsidy Fund.
• The recipients include entrepreneurs as well as entities running activity in primary agricultural production.
• These credits will be available to the entrepreneurs regardless of their size; however the size of an enterprise will dictate the total amount of support:

a) an entrepreneur from the SME sector will receive a subsidy constituting a portion of the interest due to the bank corresponding to 2 percentage points
b) others - in the total amount of 1 percentage point.

• The maximum aid for an entrepreneur granted under this instrument, i.e. the subsidy to be obtained, shall not exceed the equivalent of EUR 800 thousand expressed in PLN.
• The credit contracts may be signed until December 31st of 2020.

The subsidies will be paid for a period of up to 12 months after concluding the subsidised credit agreement.

Examples helping to explain the mechanism; the exact amount of subsidy will be calculated individually:

1. An SME entrepreneur takes out a subsidised loan for 12 months in the total amount of PLN 1 million with total interest rate of 4% per annum. The total cost of the subsidised credit, i.e. the interest due, would amount to PLN 40 thousand, of course in addition to the principal amount. The total amount of subsidy for such entrepreneur will amount to 2 percentage points, i.e. the total cost of the credit to be covered by the entrepreneur will amount to PLN 20 thousand. The entrepreneur will receive subsidy in the total amount of PLN 20 thousand.
2. A large entrepreneur takes out a subsidised loan for 12 months in the total amount of PLN 100 million with total interest rate of 4% per annum. The total cost of the subsidised credit, i.e. the interest due, would amount to PLN 4 million, of course in addition to the principal amount. The total amount of subsidy for such entrepreneur will amount to 1 percentage point, i.e. the total cost of the credit to be covered by the entrepreneur will amount to PLN 3 million. The entrepreneur will therefore receive subsidy in the total amount of PLN 1 million.

Credit holidays

We are giving the right to suspend credit payments for a total period of 3 months, without accruing interest or other fees. The new regulations will cover the persons who have lost their employment or their main source of income after March 13th of 2020.

In effect, the households which have particularly suffered from the economic effects of the pandemic will be relieved in balancing current expenditures with decreased income without fear that it will directly translate to increased credit management costs in the future.

The mechanism included in the Act provides for the following possibilities:

• Suspension of the need to pay off consumer loans, mortgages as well as credits as defined in Article 69 of the Act of 29th August of 1997 - Banking Law, both with regards to the principal amount and the interest. During that period, the lender will be prohibited from taking any other payments, except for the insurance premiums for insurance contracts related to the credit agreement.
• The agreement may be suspended for a maximum of 3 months. The crediting period, as well as all the periods provided for in the credit agreement shall be extended by the suspension period.
• In the event that a borrower has several loans of the same type (i.e. two credits indexed to CHF) granted by a single lender, the borrower shall have the right to receive subsidy to only one of the loans.
• The suspension of the credit agreement will be provided to the consumers who have lost their employment or their main source of income after March 13th.
• The solution presented in the Act will pertain to credit agreements concluded before March 13th of 2020, if the end of the crediting period defined in the agreements falls after 6 months following March 13th of 2020.

Subsidies for maintaining employment

We provide support for maintaining jobs by offering solutions which aim to provide support to employers who have suffered from the negative effects of the COVID-19 pandemic. We believe that they will allow them to remain on the market, and, in consequence, help to protect a considerable number of jobs. The support includes:

• Specifying the rules for remote work. It aims to ensure equal treatment of employees and preventing potential abuse.
• Allowing the employer to send an employee on overdue leave during the pandemic even without the employee’s consent. That measure was introduced in order to prevent the accumulation of overdue holiday leaves from previous years with the holiday leaves acquired in the current year.
• Allowing to terminate non-compete agreements during epidemic emergency or epidemic. Employers, principals, orderers will receive the authority to unilaterally terminate non-compete agreements binding after the expiry of the legal relationship. In effect, the expiry of the agreement will also cause the expiry of their obligation to pay compensation after the lapse of the agreement.
• Limiting - to the total amount of 10 times the minimum wage (therefore up to PLN 26,000) - severance pays and damages in the event of cancelling employment, civil contract or other service agreement. This solution may be used only in the companies which strongly experience the effects of the economic crisis caused by the coronavirus in the form of a decreased turnover (by at least 15% within 2 consecutive months, or by 25% in relation to a corresponding month in the previous year) or a substantially increased burden on the remuneration fund.
• During the COVID-19 epidemic, the possibility to suspend some of the obligations related to the Company Social Benefits Fund and other social funds in agreement with trade unions, in the event that the employer experiences a specific decreased turnover or a substantially increased burden on the remuneration fund. This solution shall be used only in the companies which strongly experience the effects of the economic crisis caused by the coronavirus in the form of decreased turnover (by at least 15% within 2 consecutive months, or by 25% in relation to a corresponding month in the previous year) or a substantially increased burden on the remuneration fund.
• Waiving the obligation to follow collective work agreements or remuneration regulations which specify pay deductions for the Company Social Benefits Fund in excess of the statutory amount or other social and living benefits during COVID-19, in the event that the employer experiences a specific decreased turnover or a substantially increased burden of the remuneration fund.
• Allowing the entities which - despite the decreased turnover due to the COVID-19 epidemic - have not covered their employees with economic idle time or decreased working hours, to obtain assistance from the Guaranteed Employee Benefits Fund. In such cases, the co-financing for employees will be granted up to the half of their remuneration, however not exceeding 40% of the total monthly remuneration. The co-financing will however not be granted for employees whose remunerations exceed 300% of the average monthly remuneration.
• Allowing to decrease working hours or covering an employee with economic idle time in the event of a significant burden on the employer’s remuneration fund due to the COVID-19 epidemic. In the case of employees covered by economic idle time, the employer shall provide them with remuneration decreased by up to 50%, however it shall not be lower than the minimum wage, considering the working hours. In turn, the employee’s working time may be decreased by a maximum of 20%, however not lower than 0.5 FTE, provided that the employee’s remuneration shall not be lower than the minimum wage considering the working hours prior to the decrease. That will be possible in companies which strongly suffer the effects of the economic crisis caused by the coronavirus, due to a significant increase of the burden on the remuneration fund. In addition, the employer shall reach an agreement with the trade unions in order to have the right to utilise the idle time or decreased working hours.

The regulation pertains solely to the entrepreneurs whose employment costs exceed 30% of the revenue. Lowering working hours or including an employee in economic idle time shall apply for up to 6 months. That means that such instruments may be used for up to 6 months after the entrepreneur’s revenue started to rise to the previous level. It is crucial to give entrepreneurs time to recover from the losses after the crisis while maintaining an increased elasticity. However, that state shall not be imposed for longer than 12 months after the epidemic hazard or the state of an epidemic have been called off.

• Amendments related to the so-called idle time benefit. In the case of employees who conduct business activity and are covered by additional insurance from other sources (such as partial employment), the Act on social insurance scheme provides them with the right to voluntary insurance. Such persons shall not be excluded from receiving the idle time benefit. After the amendments are introduced, the self-employed persons who are simultaneously hired by another employer will have the right to receive the idle time benefit. Such entrepreneurs will have the right to file up to three individual applications to receive the benefit.

That issue covers a considerable number of SMEs, mostly in the financial, trade or service industries. The economic activity of these persons may constitute the basic or significant source of their income. Therefore, decreased revenues due to the introduction of the COVID-19 epidemic hazard or the epidemic state have a particularly damaging effect.

Tax aids

Due to the new act, certain regulations related to income taxes will be adjusted to match the challenges related to COVID-19. For that purpose, we plan, for instance, to:

• Extend the scope of the donations subject to tax deductions, including the donations to homes for mothers with under-age children and pregnant women, dormitories, homeless shelters, including shelters with care services, assistance centres, family social assistance centres, social welfare homes - this solution is the implementation of the proposals raised by the Polish President Andrzej Duda.
• Allow tax deductions for taxpayers, including taxpayers who run business activity (on general rules while applying tax scale or flat tax rate of 19%) for material donations in the form of portable computers - laptops and tablets (usable and not older than 3 years), donated between January 1st of 2020 up to September 30th of 2020 to certain entities, such as educational institutions.
• Allow to deduct the expenses on manufacturing or acquiring goods or rights, which will be donated by the taxpayer between January 1st of 2020 until September 30th of 2020, for instance to counteract the effects of COVID-19, to healthcare institutions or educational institutions.
• Exclude the total value of donations received by healthcare institutions (i.e. hospitals) and educational institutions between January 1st and September 30th of 2020 in connection with COVID-19 from income from non-agricultural economic activity, which are not subject to inheritance tax.
• Extend the scope of possible tax deductions of donations, facilitations in the so-called bad debt deduction - each enterprise which was at loss and defaults on payments during the pandemic shall have the right to utilise the bad debt deduction on PIT/CIT.

Examples of other solutions

• The mechanism allowing to decrease employment and to introduce less favourable employment conditions applicable only in government administration shall be extended to include also executive agencies, State Treasury institutions, state special purpose funds, Social Insurance Institution as well as the funds it manages, Agricultural Social Insurance Funds, as well as the National Health Fund.
• Providing electronic applications for granting the individual forms of assistance under the shield.
• Limiting the regulatory burden, extending the validity period of certain licenses, and moving the time limits for carrying out certain obligations.
• Solutions encouraging entrepreneurs to carry out investments in the form of legal provisions allowing the use of State Aid.
• Extending the scope of the COVID-19 Counteraction Fund (i.e. a law stating that the entities which incurred expenses due to the implementation of the tasks related to counteracting infections, counteracting the spread of the virus, prophylaxis and counteracting the effects, including socio-economic effects of COVID-19, shall have the right to have such expenses co-financed under the Fund).
• Extending the scope of entities covered with the assistance to include cultural institutions.
• Facilitating the implementation of Employee Capital Plan.
• Extending the possibility for remote execution of certain tasks under criminal procedure (including, for instance, witness hearings, remote participation of the suspect in a hearing on arrest pending trial, remote participation in the court hearing).
• Supplementing the Petty Offences Law with a new offence in the form of accessing data transmission carried out by means of an IT system in order to hinder or disallow the user of such system to transmit information.
• Suspending the provisions regarding the dematerialisation of shares of bankrupt companies.
• Introducing a simplified restructuring procedure. A business which experiences financial issues and wishes to rebuild their financial standing will be able to initiate recovery proceedings without the need to refer the case to court.

After the amendments, the proceeding will last for 4 months, and the company owner shall have the right to decide to initiate..

• The anti-crisis shield also provides for the possibility of an exemption of a portion of the fee for perpetual usufruct for the entrepreneurs who have suffered from the crisis. The government estimates that the solution will allow companies to save a total of PLN 150 million.

The right to exempt companies from a portion of the fees has also been granted to local governments. If all local governments would decide to apply the exemptions, their incomes would decrease by approximately PLN 130 million in the case of cities with district rights and PLN 25 million in the case of municipalities. In addition, the shield postpones the time limit for this year’s fee for perpetual usufruct to January 31st of 2021.