State aid

This article is written according to the legal status current as of: 2020-01-13

state aid

What does the term "state aid" refer to?

State aid for entrepreneurs is primarily a financial help that comes from the national budget or local authorities’ budgets. The aim of the state aid is to benefit certain economic operators, to potentially distort the competition and improve the trade in the EU.

Article 87 of the Treaty of the European Union says that state aid is any form of support that jointly meets the following criteria:

  • there has been an intervention by the State or through State resources which can take a variety of forms (e.g. grants, interest and tax reliefs, guarantees, government holdings of all or part of a company, or the provision of goods and services on preferential terms, etc.),
  • the intervention confers an advantage to the recipient on a selective basis, for example to specific companies or sectors of the industry, or to companies located in specific regions,
  • competition has been or may be distorted,
  • the intervention is likely to affect trade between Member States

Aid granted to enterprises – in connection with employing a person assigned by the district labour office – in form of intervention works, public works, refund of social insurance contributions is state aid intended to support employment, i.e. creating new jobs and help in the process of recruitment.

Aid to companies that create new jobs is granted if:

  • the employer achieves full-year net increase in the number of employees,
  • the level of employment is maintained for the period of at least three or, in the case of small and medium enterprises, two years.

Aid in the process of recruitment is granted to enterprises if:

  • intensity of gross aid does not exceed 50% of costs borne yearly on the remuneration and social insurance contributions of the employees whose employment is to be supported by state aid,
  • the employer achieves full-year net increase in the number of employees or, if the employer does not achieve increase in the number of employees, the positions have become vacant as a result of an employee’s resignation, decision to decrease work hours, retirement or the employer’s decision to dismiss an employee for failing to perform his essential duties under the contract of employment,
  • the employer provides employment for the worker for the period of at least 12 months and may dismiss him only if he failed to perform his essential duties,
  • the aid refers to a person in a particularly disadvantageous situation on the labour market.

The employer applying for such a form of support informs the district labour office whether he has received state aid. It takes a form of a written declaration attached to the application form.   

De minimis aid:

De minimis aid is a form of state aid.

Every employer, applying for reimbursement of the costs borne on furnishing or providing additional equipment for a work-stand for an unemployed person following an assignment, is obliged to attach a de minimis state aid declaration to an application form. This information is required in order to check whether the enterprise does not exceed the admissible aid amount.

In the case of one-off subsidies for undertaking business activities, de minimis regulations are also applied. State aid may be granted to an employer if the total amount of aid the entrepreneur has received for the period of three years does not exceed €200 000 or, in the case of the transport sector, €100 000.   



Development: Editorial team of Zielona Linia 

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