January 8, 2024
Czech Republic approves amendment of the Investment Incentives Act
A recent amendment to the Investment Incentives Act eliminates the requirement to submit every application for an investment incentive to the government for consideration. As a result, the Ministry of Industry and Trade will once again decide (as was the case before September 2019) on granting the incentives for most of the applications based on the opinions of the ministries concerned. This change is expected to increase the success rate of applications for investment incentives.
More targeted support for selected investment projects was also introduced during 2023. Funds for investment in the production of technologies and equipment that will contribute to energy savings, energy transformation and strategic autonomy of the Czech Republic may be available in the form of cash grants for the acquisition of tangible and intangible fixed assets, up to 20% of eligible costs (governmental approval is required). These projects may also benefit from more favorable conditions for granting investment incentives.
Energy savings and transformation
The production of technologies and equipment that will contribute to energy savings and energy transformation may be supported by investment incentives under more favorable conditions.
The list of selected products to be newly supported includes: heat pumps, photovoltaic systems, solar thermal systems, solar hybrid systems, heat recovery units and solar thermal panels, nuclear reactors and non-irradiated fuel cells, steam generators and condensers, water turbines, water wheels and their controllers, wind turbines, wind-powered generating sets, electrolyzers for the production of hydrogen from renewable energy sources, hydrogen fuel cells, meters for the supply or consumption of gases, liquids and electricity, battery storage for electricity from renewable energy sources, insulation materials used as thermal insulation for structures and piping in the construction industry, charging stations for electric vehicles, filling stations for hydrogen electric vehicles, biomass and electricity hot water boilers for indoor heating, power chips, traction batteries for electric vehicles and electric motors for electric vehicles.
The current international situation and the unavailability of certain raw materials, components and technologies reinforce efforts to increase strategic autonomy. As a traditional industrial country, the Czech Republic is heavily dependent on supplies from Asia for certain sectors and technologies, which, as recent history has shown, can be disrupted. This results in a shortage of certain raw materials, components and technologies, which can lead (and in several cases already has led) to the suspension of production of some key sectors of Czech industry. The European Commission has already responded to this situation with legislative initiatives that include public support for key investments by Member States.
The existing listing of the supported research and development (R&D) sectors using key enabling technologies is extended to include semiconductor components in line with the regulation establishing a framework of measures to strengthen the European semiconductor ecosystem (the so-called "Chip Act"). Specifically, the annex includes R&D: in the production of semiconductor substrates for electronic applications; in the production of integrated circuits; in the design of digital integrated circuits; in volatile and non-volatile memories based on integrated circuits and other semiconductor technologies; of optical circuits and other optical elements for computing tasks; of hardware elements of quantum networks; of semiconductor elements of quantum computers; and of quantum computers.