1) Global market economical dondition:
– economy is in medium conditions, boom in several industries / fashion is always on the top
– unemployment rate in Lodz February 2011 = 13,2% / 9,7% in whole Poland
2) Capital markets:
– State of capital market: medium / in times of global crisis country was doing very well but still country budget gap is increasing
– Type of funding à KEY TRENDS
3) Commodities & other resources:
– Obtaining resources: headquarter in Lodz, former manufacturing city aspiring for polish fashion capital, easy to obtain skilled cheap labour
– Other resources: rising oil prices, low labour costs compared to other European countries, skilled labour
4) Economic infrastructure:
– Public infrastructure: still under construction / faster pace of building highways before Euro 2012
Individual & corporate taxes–> brief:
22% basic rate / 3% services & unprocessed goods / 0% export / PIT Personal Income Tax 18% & 32% progressive / 19% CIT Corporate Income Tax / Tax on civil law transactions 1% and 2% / Real estate taxes (annual tax rate from square meter Residential buildings around 1,2DKK and commercial buildings around 40DKK)
Types of taxes
- Corporate Income Tax (CIT)
- VAT (Tax on Goods and Services)
- Excise Duty
- Tax on Dividends
- Personal Income Tax (PIT)
- Inheritance and Gifts Tax
- Tax on civil law transactions
– Real estate tax
– Agricultural tax
– Forestry tax
– Tax on transportation means
– Tax on dogs
– Games tax
Fiscal structure in Poland
| 2006 |
VAT |
Excise duty |
PIT |
CIT |
Games tax |
Other fiscal income |
| % of total fiscal income |
42.7% |
21.3% |
14.2% |
9.8% |
0.5% |
11.5 % |
CIT Corporate Income Tax
-Act on Corporate Income Tax – 15 February 1992
(Journal of Laws No. 21, item 86 as amended)
-Subjects:
• all legal persons and organisational units having the same rights, except partnerships
choice between PIT and CIT
• E.g. limited partnership
• e.g. limited joint-stock partnership
– Does not apply to certain branches of activity
– In 2006, 2007, 2008 and 2009 the rate
• 19 %
Base of taxation: profit taken as surplus of income over cost
– Losses can be carried forward up to 5years, though no more than 50 % of loss can be written off in any year.
VAT Value Added Tax
– Tax on Goods and Services Act 11 March 2004
(Journal of Laws No. 54 item 535)
– Introduced in Poland in July 1993
– Companies and individuals must register for and charge VAT if their annual turnover exceeds the Polish equivalent of EUR 10 000
– refundable to foreign tourists leaving Poland (i.e. other than UE)
Rates of taxes
– basic rate: 22 % à standard rate
– preferential rate
- cereals, vegetables, meat, fish, bread, medical products, fire-fighting equipment : 7 %
- unprocessed products, taxi services (only when charged in bulk): 3 %
– 0% rate applicable to exports
Legal framework
• the VAT Directive 2006/112/EC of 28 November 2006 (Official Journal L 347, 11.12.2006, p.1)
• application of VAT rates in Member States
The basic rules
• standard rate of at least 15%
• one or two reduced rates of not less than 5% may be applied by States (enumerated in a restricted list)
Excise duty
– some commodities in Poland are subject to excise duty
– not present in all legal systems
• E.g. does not exist in France
n rate depends on the kind of goods, as well as on the origin of the good
Approx. 200 products:
– fire-arms,
– fuels and lubricants,
– plastic packaging,
– salt,
– alcoholic beverages,
– tobacco products,
– certain consumer goods (hi-fi equipment, video cameras, yachts and motor boats, perfumes, etc.)- „luxury products”
Tax on dividence
– applies to legal and natural persons who are shareholders in companies
– The tax rate equals 19 % unless agreements on avoiding double taxation state otherwise
PIT Personal Income Tax
– Act on Personal Income Tax 26 July 1991 (Journal of Laws No. 80 item 350 as amended)
– specifies about 100 types of income exempt (reduced each year)
– On the income of individuals, independently of the source of origin
– Having lived in the country for over 183 days in a calendar year the overall income is taxed (not for foreigners who represent a foreign company in Poland or work for a corporation established with foreign capital)
-Otherwise only Polish earnings are taxable
– Paid on a monthly basis and the deadline for yearly tax returns is April 30
PIT IN 2009 and 2010
| Tax Base (PLN) |
Income Tax |
| up to 3091 |
EXEMPT |
| up to 85 528 |
18 % – 556.02 |
| over 85 528 |
14 839.02 + 32 % |
Tax on civil law transactions
– Tax on Civil Law Transactions Act – 9 September 2000 (Journal of Laws No. 86 item 959)
– A taxpayer who must pay this tax, without being called to do so by tax authorities, is obliged to submit the relevant declaration, calculate and pay the tax to the tax office or transfer it to its bank account, within
14 days from the date of the commencement of tax obligation
– E.g :
• 1. Sales contract:
a) connected with real estate: 2%
b) other rights: 1%
• 2. exchange contract, donation,…:
a) connected with real estate: 2%
b) other rights: 1%
• 3. contract of lease: 2%
Stamp duty
– Act on Stamp Duty of 16 November 2006 (Journal of Laws No. 225, item 1635)
– The following are subject to stamp duty (opłata skarbowa):
• performance of an official activity on the basis of a declaration or application;
• issuance of a certificate (on the basis of an application)
• issuance of a licence (permit or concession)
• submission of a document affirming the granting of a power of attorney
• performance of an official activity, issuance of a certificate or a licence (permit or concession)
– Paid:
– Cash payment at the administrative body’s cashdesk, a bank transfer to the relevant tax body’s account or by means of encashment (inkaso)
Local taxes
– Local authorities are empowered to set the level of rates and the scope of relieves in local taxes.
– Their rates, however, cannot exceed the maximum levels determined by the Parliament.
– Local taxes and fees include: real estate tax, vehicle tax, dog tax, and market tax.
Real estate tax
– Annual tax rates are determined by resolutions of the local government of communal level (gmina) and may be different in each administrative area (within the limits defined by the Minister of Finance published every year)
– Plans to replace this tax with a cadaster tax, which will be related to the property’s value
– Maximum rates for real estate property are set out in the following table (2008):
| Type of Real Estate |
Annual Tax Rate / Square Meter |
| Residential buildings |
0.59 PLN |
| Commercial buildings |
19.01 PLN |
Double taxation treaties
– model OECD convention
– Since Poland has signed agreements on avoiding double taxation with approx. 60 countries
– reciprocity principle
– reduce or eliminate various taxes
