Enfranchisement of premises will give hard time to business

On 1 January 2019, the so-called Enfranchisement Act will come into force, transforming the right of perpetual usufruct into ownership right. Grzegorz Karwatowicz comments on the issue of perpetual usufruct transformation into ownership in the context of de minimis aid regulations.

“(…) though de minimis aid is so-called soft aid, the problem with the Act is not so minimal. It is not only about the issue of exceeding the limit of EUR 200,000, but generally about the rules of applying and accounting for de minimis aid. You have to keep in mind the aid that the entrepreneur has used in the past and plans for applying for it in the future”. – thinks Karwatowicz.

COMMENTARY BY | Grzegorz Karwatowicz, legal counsel of GWW

— The European Commission Regulation on de minimis aid does not distinguish between an entrepreneur and an enterprise – as in Polish law – but considers any economic activity as an enterprise, regardless of its legal form. When analyzing the use of de minimis aid, all company capital links and owner's personal relationships are examined and the limits used are cumulated. In the case of  an entrepreneur with several businesses, calculation of whether the limits have been exceeded will be quite a challenge – says Grzegorz Karwatowicz.

— Should the legislator assume that the usufructuary would each time be charged with a fee equal to the market value of the property for a change of the usufruct right into ownership, there would be no aid, there would be no need to calculate upper limits, etc. In the light of the adopted Act, entrepreneurs are bound by all requirements regarding calculating limits and reporting – says Grzegorz Karwatowicz.

The article with a commentary was published in the Puls Biznesu daily on 12 November 2018.

Link to the article: https://www.pb.pl/uwlaszczenie-lokali-da-w-kosc-biznesowi-945341