What is it with this money from the Development of Small Farms? The rules of the program were created typically in Polish – it is difficult to understand them without being a specialist. Who is 100,000 for? PLN, and for whom 120 thousand? zloty? Is it better to be subject to VAT or not? – you will find the answers to these questions in the article below.
Let us remind you that the recruitment of applications for support under the Development of Small Farms program will take place from July 25 to August 22, 2024. There will probably be many people interested, although it cannot be denied that the rules of the program were created typically in Polish – it is difficult to understand them without being a specialist. ..
We asked Dawid Kowalczyk, president of the Polish Agency for Obtaining EU Funds, to answer the questions most frequently asked by farmers regarding this type of support.
Let us add that until June 18, PAPFU offers special promotional conditions for those interested in preparing an application for support from the Small Farms Development program – a discount of 20% of the costs of running the program. It’s worth using!
Who is 100,000 for? PLN, and for whom 120 thousand? zloty?
Anyone can take PLN 120,000. PLN, but 20 thousand must spend on things related to preparation for the sale or the sale itself. If you do not have such plans, you can apply for PLN 100,000. for the machines and devices you want and possibly you can build or modernize something.
– There is one exception to this rule, which allows you to spend the obtained PLN 120,000. PLN for the above-mentioned investments. You must have 100% of the land in ecology in the year of application. I think we understand each other? – emphasizes the president of PAPFU.
VAT or no VAT? – that is the question
– In my opinion, it is better to switch to VAT, there is always some fuel or a TV set for the cows to watch a movie about giraffes, you can put it in the register and get a 23% VAT refund – says Dawid Kowalczyk.
And he explains further: – As a peasant, a farmer sells at an 8% VAT rate and most of his expenses are at 23% (fertilizers and feed are at 8%). This means that for the switch to VAT to be profitable, you need to have documented sales (it’s different on small farms, right?) three times higher than purchases – I don’t think our production is that profitable. And how else do you invest? Ladies, it’s not worth being VAT registered!
Of course, there will be the cost of accounting, approximately PLN 2,000 per year – we already deal with this at PAPFU, so you can join us. You certainly won’t have to travel with documents.
I’ll calculate it with an example:
– 120 thousand PLN (at one hundred thousand it looks analogous)
– ARiMR pays the first installment of aid – PLN 96,000. zloty
– Now you have to spend 141 thousand. PLN net (I’d like to point out that I’m rounding it up because we won’t play around with small amounts), i.e. PLN 173,000. PLN gross. A lot of money – how much will actually remain in your pocket?
– ARiMR returns the missing 24 wheels.
– Tax Office 32.
– Let’s count: 173 – (96+24+32) = 21. 21 thousand. PLN of own contribution, i.e. 12% of own contribution! There are no such favorable conditions today and there will never be. Okay, you still have to spend 5% (only on the amount of the bonus from ARiMR) on our acquisition preparation and settlement service, but it is still a super advantageous program.
– You just need to have your own PLN 77,000, although you don’t have to because you can borrow it (we are working with one of the large banks on a special loan product for own contribution)
And you still don’t want to pay VAT? You don’t have to. Maybe you don’t want the 20,000 either. PLN for preparation for sale. No problem, we count for 100,000. zloty. (similarly for PLN 120,000)
– ARiMR pays the first installment of aid – PLN 80,000. zloty
– Now you have to spend 117 thousand. PLN net, i.e. 144 thousand. PLN gross.
– Then you get a refund of PLN 20,000. PLN from ARiMR, i.e. 44 thousand. PLN of your own contribution, which no one will return to you. How much percentage of your own contribution do you have in this case? 30%, you get a subsidy of 70% – also quite good.
| 100 thousand zloty | 120 thousand zloty | |||
| VAT free | VAT collector | VAT free | VAT collector | |
| And the war | PLN 80,000 | PLN 96,000 | ||
| II rate | PLN 20,000 | PLN 24,000 | ||
| Gross investment | PLN 144,000 | PLN 173,000 | ||
| VAT refund | LACK | PLN 27,000 | LACK | PLN 32,000 |
| Own contribution before refund | PLN 64,000 | PLN 77,000 | ||
| Contribution is non-refundable | PLN 44,000 | PLN 17,000 | PLN 53,000 | PLN 21,000 |
| Difference | PLN 27,000 | PLN 32,000 | ||
| Level of funding | 70% | 88% | 70% | 88% |
| Difference | 18% | 18% | ||
Source: PAPFU calculations
– RMG is a really very beneficial program for farmers who want to produce something (you need to achieve a certain income in the following years, but you are a farmer to earn money and not to turn over the earth!) For this you need to earn points – in my opinion this is not a problem, and it may even contribute to higher subsidies. Visit our website, fill out the form and you will find out if this program is for you – invites Dawid Kowalczyk.
More details at: https://www.papfu.pl/promocjarmg/
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