Sangamon Sun

The February Monthly Meeting was held on Wednesday, February 2, 2022. Our guest speaker was Mr. Jan Sarnowski, Deputy Minister of Finance, accompanied by Ms. Maja Kowalewska, Deputy Director in the Income Tax Departments, and Mr. Tomasz Bieliński from the Department for Large Businesses, Ministry of Finance. ‘The Polish Deal’, retention of talents, fundamental fiscal issues, economic credibility of Poland as a place to invest as well as regulatory plans to support companies and their employees were the main topics of the discussion moderated by Jolanta Jaworska, AmCham Vice-Chair (IBM). 

US investors are making business decisions by evaluating the country’s economic credibility and calculating the associated risks (economic, political or regulatory). So far, the investment climate in Poland has effectively attracted our companies, which are developing their business here.
Therefore with great concern AmCham observes many adverse regulatory and policy developments in the Polish economy, such as uncertainty associated with the introduction of the Polish Deal, another tax law,  even more complex, and growing costs of doing business in Poland.
With these changes AmCham sees potential serious risks like lowering competitiveness of Poland as a destination country for FDI, instability and leakage of the workforce, retention of talents and reassessment of investment plans, which have been discussed today sharing also AmCham’s strong recommendations to mitigate the challenges. AmCham proposes to postpone the Polish Deal by one year and start working together on this reform, which is very important from both the employer’s as well the employees’ perspective.

Minister Sarnowski started his presentation by assuring meeting participants that the Government is conscious of 'some level of uncertainty, but one must be aware that 'the Polish deal' is one of the biggest tax reforms of the last 20 years’. He claimed that the Government plans full implementation of 'the Polish Deal' to be closed till the end of March 2022. He listed five pillars of 'the Polish Deal' tax reform: Tax Fairness, Modern Taxation, Increased Labor Supply, Investment Convenience, and Competitive Tax Regime. He also mentioned that 17.5 M people (66% of all taxpayers) would benefit from 'the Polish Deal'. 

Partially addressing AmCham concerns, Minister Sarnowski focused on four packages encouraging investment in Poland: Capital, Investment, Innovations, and Development and Expansion. 

Attracting capital should be reached thanks to Repatriation Relief, a lump sum for new investors, new regulations on Family Foundations (to be introduced end of 2022), and support for company CSR activities (tax deduction, known as 'Pałacyk plus'). One of the main tools in this area is the Voluntary Disclosure Program, planned to be launched on October 1, 2022. 

Direct support for investors means, among others: easier and quicker access to tax information (including 'Interpretation 590'), lower compliance costs (CIT and VAT grouping regulations to be introduced July 1, 2022), Holding regulations and VAT options for financial services, that already entered on January 1, 2022. 

The next pillar of the reform supports innovation. For the first time, R&D relief and IP Box relief will be used simultaneously. The package introduces some new tools such as tax reliefs for innovative employees, automation, and prototypes. The Minister expressed willingness to engage AmCham in the education process for companies about the new tools supporting innovation. 

The last package: Expansion and Development, is designed to support companies already operating in Poland, no matter their size. 

Except finalizing the introduction of 'the Polish Deal', which is an absolute priority to the Ministry, other challenges for 2022 are: 

Negotiations and introduction of BEPS 2.0. The EU regulations on global minimum taxation are planned to be announced in the begging of Q2 2022, with the implementation date expected in June 2023 or January 2024. 

The new VAT Directive that is expected to open new options allowing the Government to lower VAT rates in Poland. 

MDR reform. 

Introduction of e-invoicing. 

With the last two issues, AmCham already agreed to form a working group led by AmCham Tax Committee and the Ministry to work together on the best possible solution. 

Answering questions from the audience, Mr. Sarnowski agreed to proceed with meetings of the VAT working group in English, which was expected by a couple of AmCham member companies. The Ministry wants to continue working closely with (AmCham) companies on all stages of the legislative process in the way that evolved during joint work on the Withholding Tax. He also repeated that set of new incentives, lowered costs of compliance and other elements of 'the New Deal' are, in his opinion good arguments to convince international businesses to invest in Poland.  

At the meeting closing, the voice was passed to Mr. Tomasz Bielański from Department for Large Businesses, who explained the role of the new Investor Desk operating in the Ministry of Finance. The Desk is designed to help large investors (investments over 100 M PLN) in the process of preparing and settling the investment. More details on Ministry's Investor Desk will follow in Q2.