Poland Tax Guide 2010

Transcription

1 Poland Tax Guide 2010

2 FOREWORD For any business looking to set up in a new market, one of the critical deciding factors will be the target country s tax regime. What is the corporate tax rate? What capital allowances can we benefit from? Are there double tax treaties? How will foreign source income be taxed? Foreword Since 1994, the PKF network of independent member firms, which is administered by PKF International Limited, has produced the PKF Worldwide Tax Guide (WWTG) to provide businesses with the answers to these key tax questions. This handy reference manual provides clients and professional practitioners with comprehensive international tax and business information for over 100 countries throughout the world. As you will appreciate, the production of the WWTG is a huge team effort and I would like to thank all the member firms of the PKF network who gave up their time to contribute the vital information on their country s taxes that forms the heart of this publication. I would also like thank Richard Jones, PKF (UK) LLP, Kevin Reilly, PKF Witt Mares, and Rachel Yeo and Scott McKay, PKF Melbourne for co-ordinating and checking the entries from within their regions. This year s WWTG is the largest ever reflecting both how the PKF network is growing and the strength of the tax capability offered by member firms throughout the world. I hope that you find that the combination of reference to the WWTG plus assistance from your local PKF member firm will provide you with the advice you need to make the right decisions for your international business. Mark Pollock PKF Perth Chairman, International Tax Committee of the PKF network I

3 IMPORTANT DISCLAIMER This publication should not be regarded as offering a complete explanation of the taxation matters that are contained within this publication. Disclaimer This publication has been sold or distributed on the express terms and understanding that the publishers and the authors are not responsible for the results of any actions which are undertaken on the basis of the information which is contained within this publication, nor for any error in, or omission from, this publication. The publishers and the authors expressly disclaim all and any liability and responsibility to any person, entity or corporation who acts or fails to act as a consequence of any reliance upon the whole or any part of the contents of this publication. Accordingly no person, entity or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining advice from an appropriately qualified professional person or firm of advisors, and ensuring that such advice specifically relates to their particular circumstances. PKF International is a network of legally independent member firms administered by PKF International Limited (PKFI). Neither PKFI nor the member firms of the network generally accept any responsibility or liability for the actions or inactions on the part of any individual member firm or firms. II

4 PREFACE The (WWTG) has been prepared to provide an overview of the taxation and business regulation regimes of over 100 of the world s most significant trading countries. In compiling this publication, member firms of the PKF network have sought to base their summaries on information current as of 30 September 2009, while also noting imminent changes where necessary. Preface On a country-by-country basis, each summary addresses the major taxes applicable to business; how taxable income is determined; sundry other related taxation and business issues; and the country s personal tax regime. The final section of each country summary sets out the Double Tax Treaty and Non-Treaty rates of tax withholding relating to the payment of dividends, interest, royalties and other related payments. While the WWTG should not to be regarded as offering a complete explanation of the taxation issues in each country, we hope readers will use the publication as their first point of reference and then use the services of their local PKF member firm to provide specific information and advice. In addition to the printed version of the WWTG, individual country taxation guides are available in PDF format which can be downloaded from the PKF website at Finally, PKF International Limited gladly welcomes any comments or thoughts readers may wish to make in order to improve this publication for their needs. Please contact Kevin F Reilly, PKF Witt Mares, Eaton Place, Suite 440, Fairfax, Virginia 22030, USA by to kreilly@pkfwittmares.com PKF INTERNATIONAL LIMITED APRIL 2010 PKF INTERNATIONAL LIMITED ALL RIGHTS RESERVED USE APPROVED WITH ATTRIBUTION VI

5 ABOUT PKF INTERNATIONAL LIMITED PKF International Limited (PKFI) administers a network of legally independent firms. The PKF network is the 11th largest global accountancy network with over 240 legally independent member and correspondent firms which have a combined annual turnover of $1.9 billion. Located in 125 countries, the member firms of the PKF network share a commitment to providing clients with high quality, partner-led services tailored to meet each client s own specific requirements. The membership base of the PKF network has grown steadily since it was formed in Added to the sustained growth in the number of PKF member firms, this solidity has provided the foundations for the global sharing of expertise, experience and skills and the development of services that meet the evolving needs of all types of client, from the individual to the multi-national corporation. Services provided by member firms include: Assurance & Advisory Insolvency Corporate & Personal Financial Planning Taxation Corporate Finance Forensic Accounting Management Consultancy Hotel Consultancy IT Consultancy Introduction PKF member firms are organised into five geographical regions covering Africa; Latin America and the Caribbean; Asia Pacific; Europe, the Middle East & India (EMEI); and North America. Each region elects representatives to the board of PKF International Limited, which administers the network. While the member firms remain separate and independent, international tax, corporate finance, professional standards, audit, hotel consultancy and business development committees also work together to improve quality standards, develop initiatives and share knowledge across the network. Please visit for more information. VII

6 STRUCTURE OF COUNTRY DESCRIPTIONS A. TAXES PAYABLE FEDERAL TAXES AND LEVIES COMPANY TAX CAPITAL GAINS TAX BRANCH PROFITS TAX SALES TAX/VALUE ADDED TAX FRINGE BENEFITS TAX LOCAL TAXES OTHER TAXES B. DETERMINATION OF TAXABLE INCOME Structure CAPITAL ALLOWANCES DEPRECIATION STOCK/INVENTORY CAPITAL GAINS AND LOSSES DIVIDENDS INTEREST DEDUCTIONS LOSSES FOREIGN SOURCED INCOME INCENTIVES C. FOREIGN TAX RELIEF D. CORPORATE GROUPS E. RELATED PARTY TRANSACTIONS F. WITHHOLDING TAX G. EXCHANGE CONTROL H. PERSONAL TAX I. TREATY AND NON-TREATY WITHHOLDING TAX RATES VIII

7 INTERNATIONAL TIME ZONES AT 12 NOON, GREENWICH MEAN TIME, THE STANDARD TIME ELSEWHERE IS: A Angola...1 pm Argentina...9 am Australia - Melbourne...10 pm Sydney...10 pm Adelaide pm Perth...8 pm Austria...1 pm B Bahamas...7 am Bahrain...3 pm Barbados...8 am Belgium...1 pm Belize...6 am Bermuda...8 am Bolivia...8 am Botswana...2 pm Brazil am Brunei...8 pm Bulgaria pm C Cameroon...1 pm Canada - Toronto...7 am Winnipeg...6 am Calgary...5 am Vancouver...4 am Cayman Islands am Chile...8 am China - Beijing pm Colombia...7 am Costa Rica...6 am Croatia...1 pm Cyprus...2 pm Czech Republic pm D Denmark...1 pm Dominican Republic am E Ecuador...7 am Egypt...2 pm El Salvador...6 am Estonia...2 pm F Fiji...12 midnight Finland...2 pm France pm G Gambia (The) noon Germany...1 pm Ghana noon Greece...2 pm Grenada...8 am Guatemala...6 am Guernsey noon Guyana...8 am H Hong Kong...8 pm Hungary...1 pm I India pm Indonesia pm Ireland noon Israel...2 pm Italy...1 pm J Jamaica...7 am Japan...9 pm Jersey noon Jordan...2 pm K Kazakhstan...5 pm Kenya...3 pm Korea...9 pm Kuwait...3 pm L Latvia...2 pm Lebanon...2 pm Leeward Islands (Nevis, Antigua, St Kitts)....8 am Libya...2 pm Liberia noon Lithuania...2 pm Luxembourg...1 pm M Malaysia...8 pm Malta...1 pm Mauritius...4 pm Mexico...6 am Morocco noon N Namibia pm Netherlands (The) pm Netherlands Antilles am New Zealand midnight Nigeria...1 pm Norway...1 pm O Oman...4 pm P Panama am Papua New Guinea pm Peru...7 am Philippines...8 pm Poland pm Portugal...1 pm Puerto Rico...8 am Q Qatar am Romania...2 pm Russia - Moscow/St Petersburg pm S Sierra Leone noon Singapore...7 pm Slovak Republic pm South Africa...2 pm IX Time Zones

8 Spain...1 pm Swaziland...2 pm Sweden...1 pm Switzerland...1 pm T Taiwan...8 pm Tanzania...3 pm Thailand...7 pm Trinidad and Tobago am Turkey...2 pm Turks and Caicos Islands am Time Zones U Uganda...2 pm Ukraine...2 pm United Arab Emirates pm United Kingdom (GMT) 12 noon United States of America - New York City am Washington, D.C am Chicago...6 am Houston...6 am Denver...5 am Los Angeles...4 am San Francisco am Uruguay...9 am V Vanuatu...11 pm Venezuela...8 am Vietnam Z Zambia...2 pm X

9 Poland POLAND Currency: Zloty Dial Code To: 48 Dial Code Out: 00 (PLN) Member Firm: City: Name: Contact Information: Warsaw Agnieszka Chamera Warsaw Pawel Chrupek A. TAXES PAYABLE COMPANY TAX Polish resident companies are subject to corporate income tax (CIT) on all sources of their worldwide income, while non-residents are subject to corporate income tax only on income derived from the territory of Poland. A company is deemed resident in Poland if it is incorporated or managed in Poland. The corporate tax rate for 2010 is levied at 19% of taxable base. In general, the tax year for corporate taxpayers is the calendar year. Taxpayers are obliged to submit their tax declaration, together with the balance sheet, to the fiscal office within three months from the end of their tax year. Taxpayers are obliged to pay tax monthly in advance, based on the current year s income. Taxpayers can also make monthly advance payments based on specific rules if they meet certain conditions. CAPITAL GAINS TAX Capital gains from the disposal of fixed business assets are aggregated with income from other sources and are subject to corporate income tax at the standard CIT rate (19% in 2010). BRANCH PROFITS TAX The tax rate of income derived by a foreign corporation from a branch located in Poland is the same as for Polish entities (19%). SALES TAX/VALUE ADDED TAX (VAT) As a result of Poland s accession to the European Union, the Polish VAT Act has changed in line with the regulations of the 112th Directive and other EU Directives related to VAT. Under the Polish VAT regulations, VAT applies to the following transactions: including the movement of goods between different Member States within the same business different Member States within the same business. P Taxable entities are exempt from charging VAT in 2010 if, in the preceding tax year, the turnover of the entity making the supply did not exceed PLN 100,000. Taxpayers with 2009 supplies of between PLN 50,000 and PLN 100,000 may also apply for VAT exemption if they elect to do so by 15 January VAT payers who have no registered seat in Poland nor fixed place of business or place of residence are obliged to appoint a fiscal representative. This obligation does not apply to EU residents. The fiscal representative is jointly liable with the business it represents for all Polish VAT liabilities. In general, tax obligation arises at the moment of giving, handing over, exchanging a commodity, making a gift or rendering a service. However, there are many exceptions to this rule. 1

10 Poland VAT is charged at the standard tax rate of 22% on the supply of most goods and services or at the reduced rates of 7% and 0%: and passenger transport supply, construction and assembly services, restoration and conservation of building included in social housing programs goods. In addition, there are a number of exemptions from VAT including education and health care services. In general, VAT taxpayers are obliged to settle VAT tax on a monthly basis up to the 25th of the month following the month in which the tax obligation arose. FRINGE BENEFITS TAX (FBT) Benefits in kind are included in taxable income of employees. LOCAL TAXES Real property tax and transport tax are charged as local taxes in Poland. Real property tax is paid by owners of real estate. The tax base depends on the type of asset concerned: The tax rates are established by the Commune Council. The tax on the means of transport is imposed on lorries, tractors and trailers. The tax rates are also established by the Commune Council. OTHER TAXES CIVIL LAW ACTIVITY TAX (CLAT) Some of the civil acts may be subject to civil law activity tax. These are, in general: STAMP DUTY Transactions subject to stamp duty include the following: SOCIAL SECURITY CONTRIBUTION Resident individuals and employees within the territory of Poland are subject to obligatory old age and disability insurance. P Rates of social security contributions are as follows: Employer Employee Old age pension 9.76% 9,76% Disability insurance 4.50% 1.50% Sickness benefits 2,45% Accident insurance Health insurance 9.00% Contributions to the old age and disability pensions are paid by the employer and employee. The 9.76% employee contribution is transferred to the Open Pension Fund. Contributions by employees are based on their gross income for income tax purposes. There is a ceiling on income on which contributions for the old age for health and maternity insurance. The employer withholds the employees contributions. Employees contributions are deductible for income tax purposes and employers contributions are deductible for corporate income tax purposes. 2

11 Poland The contribution for accident insurance is paid by the employer. The contribution for sickness benefit is paid by the employee. In addition: obligatory health insurance contribution (covering medical expenses) is payable by employees Fund. B. DETERMINATION OF TAXABLE INCOME Corporate entities are subject to corporate income tax on the net profit shown on the yearly balance sheet, computed in accordance with the statutory accounting and bookkeeping rules, after adjustment for deductions and additions provided under the tax DEPRECIATION Current rates range from 1.5% to 30% depending on the type of asset. As a general rule, the straight-line method must be applied although the reducing method is possible under some conditions. The value of assets may be revalued at the beginning of the tax year with the agreement of the Minister of Finance. Land is not depreciated. INVENTORY Stock in trade, or inventory, is valued at its historic cost price or market value. The cost of inventory may be calculated at a standard cost, at a weighted average cost, or on the LIFO or FIFO basis, as long as the method selected is used consistently. CAPITAL GAINS AND LOSSES Capital gains and losses are subject to CIT tax at a rate of 19% for DIVIDENDS Dividends received from resident companies are taxed separately at a rate of 19% unless the participation exemption applies (see Section F below). The tax is withheld by the distributing company. Dividends may be distributed only from net profits of the company. Sums allocated for distribution among shareholders cannot be deducted from the taxable base. INTEREST DEDUCTIONS Interest is deductible on an accrual basis. For interest from credits and loans from LOSSES years but the amount deducted in any one year cannot exceed 50% of the loss incurred in the previous five tax years (including those amounts already utilised against profits). FOREIGN SOURCED INCOME Resident companies are subject to tax on their worldwide income, including foreignsourced income and gains. However, double tax agreements may apply to reduce or extinguish the tax liability imposed under domestic tax law. P INCENTIVES Polish law provides for corporate income tax incentives such as special economic zones (SEZs). In principle, companies operating within special economic zones may enjoy tax holidays which involve tax exemption from corporate income tax within certain time limits. Investments in SEZs may be conducted subject to a permit issued by the authorities. There are now 14 such zones in Poland: Mielecka, Katowicka, Suwalska, Legnicka, Walbrzyska, Lodzka, Kostrzynsko-Slubicka, Slupska, Tarnobrzeska, Warminsko-Mazurska, Starachowicka, Kamiennogorska, Pomorska and Krakowska (Krakow Technology Park). the Minister of Economy or the authorities of the SEZ. Regulations applicable to number of employees that must be hired to benefit from the tax exemption. 3

12 Poland C. FOREIGN TAX RELIEF Foreign-sourced income received by a resident company is included in its taxable base unless otherwise provided by the double tax treaty. Taxes paid abroad may be credited against the tax due. However, the amount of tax credit may not exceed the amount of domestic tax that would have been due on the income derived abroad had it been derived in Poland. D. CORPORATE GROUPS In accordance with the Corporate Income Tax Act, a tax capital group may be established. Corporate tax is due on the income of the group as a whole. Such a group can be established only by joint stock companies and limited liability the dependent companies. There are also other conditions which must be met to establish the tax capital group, such as: E. RELATED PARTY TRANSACTIONS Transfer pricing provisions apply to transactions carried out between related parties (broadly where one partly controls the other or they are under common control). The provisions apply to both transactions between a Polish and a non-polish resident entity and to those between Polish entities. F. WITHHOLDING TAXES Withholding tax is deducted from interest, royalties and dividends. On payments to non-residents, it is deducted at 19% on dividends and 20% on royalties and interest payments, unless reduced by a double tax treaty. However, under the provisions implementing the EC Parent-Subsidiary Directive, dividend distributions by resident subsidiaries to their non-resident EU parent or EEA (European Economic Area) parent companies or resident parent company are exempt. In order to benefit from this regulation, the following conditions must be met: dividends must be subject to corporate income tax in Poland or the EU member country or EEA country on their worldwide income company continuously for a period of at least two years. P From 1 July 2005, the EC Interest and Royalties Directive has been implemented into domestic law. Interest and royalty payments under the Directive are subject to a reduced rate of withholding tax when certain conditions are met. The rate is 5% between 1 July 2009 and 30 June 2013 and 0% thereafter. In order to benefit from this regulation, the following conditions must be met: another EU member state and has a taxable permanent establishment in Poland other than Poland company continuously for a period of at least two years; or company continuously for a period of at least two years. G. EXCHANGE CONTROL With effect from 2003, most foreign exchange transactions are allowed by the Poland. Domestic persons doing business in Poland, which normally operates wholly in Zlotys, generally may hold foreign currency accounts for foreign receivables. Invoices and services purchased abroad may be paid in foreign currencies at the official exchange rate on the day that the payment is made or from their foreign currency accounts. 4

13 Poland H. PERSONAL TAX Polish resident taxpayers are subject to tax on their worldwide income, subject to double tax treaties. Non-residents are taxed only on the income derived from work performed within the territory of Poland. Tax is levied on all taxable income at progressive tax rates. The tax scale for 2010 is as follows: Tax base Rate Up to PLN 3,089 0% 18% minus PLN Over PLN 85,528 PLN 14, % of surplus over PLN 85,528 Personal income tax is reduced if, in the financial year, the taxpayer incurred expenditure as specified in the law, within the proper limits. Payers of the income tax referred to in the PIT law are obliged to calculate and collect tax payments in advance, within the year, and transfer them to the bank account of the relevant tax office by the 20th of the month following the month when the tax advance payment was collected. Taxpayers are obliged to file an annual tax return by 30 April of the following year. This obligation does not apply to taxpayers for whom the annual tax return is made by the tax collector. The submission of the tax return has to be accompanied by payment of the difference between the income tax due, as calculated in the tax return, and the sum of any tax paid in advance. The income tax arising from the tax return is the tax due for a given year, unless the tax office issues a decision establishing a different amount of due tax. Individuals who receive inheritances or gifts are liable to tax for the portion they receive. Polish citizens and persons who are domiciled in Poland are also liable to property located in Poland are exempt if neither party is a Polish citizen or domiciled in Poland. The rates are progressive depending on the category of taxpayer and value of property received and will vary from 3% to 20%. I. TREATY AND NON-TREATY WITHHOLDING TAX RATES Dividends (1) Interest Royalties Non-treaty countries: Treaty countries: Albania 10 5 Armenia Australia Austria 5 5 Azerbaijan Bangladesh Belarus 10 0 Belgium 5 5 Bosnia and Herzegovina Bulgaria Canada Chile P 5

14 Poland P Dividends (1) Interest Royalties China Croatia Cyprus Czech Republic 10 5 Denmark 5 5 Egypt Estonia Finland 0 10 France (2) Hungary Iceland India Indonesia Iran Ireland Israel 5 Italy Japan Jordan Kazakhstan Korea Kuwait 15 Kyrgyzstan Latvia Lebanon Lithuania Luxembourg Macedonia Malaysia 0 15 (4) Malta Mexico 10 Moldova Mongolia Montenegro Morocco Netherlands 5 5 New Zealand Norway 0 10 Pakistan (3) 20 (2) Philippines Portugal Romania Russia Serbia

15 Poland Dividends (1) Interest Royalties Singapore Slovak Rep Slovenia South Africa Spain 0 10 Sri Lanka 15 0 Sweden 0 5 Switzerland 10 0 Syria Tajikistan Thailand Tunisia Turkey Ukraine United Arab Emirates United Kingdom 5 5 United States 0 10 Uzbekistan Vietnam 10 Zimbabwe Different treaty rates may apply depending on whether the dividend is received by a company or individual, or the percentage interest in the Polish company held by the recipient of the dividend. It is important to consult the relevant treaty for further details. 2 The domestic rate applies. 3 The domestic rate applies, apart from where the dividend is received by a company holding at least one-third of the capital of the Polish company. 4 Domestic rate applies to royalties for the use of, or the right to use cinematograph films, or works recorded on tapes for television or broadcasting. P 7

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