INCENTIVES FOR INVESTORS IN POLAND
There are a number of key factors which make Poland especially favourable for investment.
Favourable factors include:
- The size of the Polish market
- Low labour costs
- Availability of educated staff
- The country’s stable political situation
- Its favourable geographical location
According to the Code of Commercial Companies, commercial companies include:
- A registered (general) partnership, a professional partnership, a limited partnership,
- A limited joint-stock partnership (which are partnerships), a limited liability company and
- A joint-stock company (which are capital companies).
SUBJECTS OF TAXATION
Natural persons subject to personal income tax (PIT) are individual taxpayers, including those with income from participation in partnerships, i.e.:
- A partnership in the meaning of the Polish Civil Code
- A registered partnership
- A professional partnership
- A limited partnership
- A limited joint-stock partnership
Any income from the participation in the above-mentioned partnerships, as well as income from joint ownership, joint enterprise, joint possession or joint use of things or property rights, is taxed separately for each partner (taxpayer), in proportion to his/her share in the partnership’s income.
The PIT Act is also applicable to natural persons who are shareholders in companies having legal personality i.e. limited liability companies or joint stock companies, with reference to income from participation in the companies’ profit.
OBJECTS OF TAXATION
Personal income tax is levied on all kinds of income, except for income exempt from taxation under provisions of the PIT Act and income on which collection of taxes has been abandoned under provisions of the Tax Ordinance Act.
According to the provisions of the PIT Act, income can be derived from several sources and the assignment of income to certain specific sources results in the application of a specific method of taxation.
An income from a given source of revenue is defined as the excess of total revenue from that source over its tax deductible costs, generated in a given tax year. If a taxpayer receives income from more than one source, subject to certain exceptions, the sum of the various incomes from all sources is subject to taxation. The said exceptions refer to the following:
- Revenue (income) which is subject to lump-sum taxation
- Income which is subject to flat-rate tax
VALUE ADDED TAX (VAT)
Legal provisions governing VAT issues are divided and set out in two groups, by:
1) Community law – in particular, the Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax
2) National law – the act on Tax on Goods and Services of 11 March 2004 r. (Journal of Laws No 54, item 535, with amendments) and over 30 executive decrees
Entities should register for VAT before they first conduct any taxable activity. As a result of registration, an entity acquires active VAT payer status. If the taxpayer plans to carry out intra-community transactions, it is additionally requiredto register as an EU VAT payer. Some taxpayers are exempt from the requirement to account for VAT. This exemption applies to taxpayers whose annual taxable sales do not exceed PLN 150,000.
Foreign VAT payers can be registered for VAT purposes in Poland and have the same obligations as local VAT payers. VAT payers from outside the EU must appoint a fiscal representative, who is jointly liable with the entity.