Corporate Tax 2010 - BMR Advisors

Chapter 36
Poland
Ewa Opalinska
Gide Loyrette Nouel Warsaw
Maciej Grela
1 General: Treaties
2 Transaction Taxes
1.1 How many income tax treaties are currently in force in
Poland
Poland has entered into income tax treaties with over 80 countries
including the Member States of the European Union, most other
European countries and with several American, Asian, Australian
and African countries.
1.2 Do they generally follow the OECD or another model
Polish income tax treaties generally follow the OECD Model
Convention.
1.3 Do treaties have to be incorporated into domestic law
before they take effect
According to the Polish constitution, tax treaties are incorporated
into Polish law once accepted by Parliament in an enactment of
legislation, and then ratified by the President of Poland.
2.1 Are there any documentary taxes in Poland
Polish regulations provide for stamp duty imposed on certain
administrative procedures and documents.
2.2 Do you have Value Added Tax (or a similar tax) If so, at
what rate or rates
The Polish tax system provides for VAT. The Polish VAT Act
provides the following rates of VAT:
a standard rate of 22%;
a reduced rate of 7%;
a “zero” rate, and
a transitional reduced rate of 3% (valid until the end of 2010,
applies mainly to food products).
2.3 Is VAT (or any similar tax) charged on all transactions or
are there any relevant exclusions
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1.4 Do they generally incorporate anti-treaty shopping rules (or
“limitation of benefits” articles)
In general, Polish tax treaties do not contain ‘limitation of benefits’
clauses. However, in line with the OECD Model Convention, some
treaties rely on the concept of ‘beneficial ownership’ to eliminate
treaty shopping with regard to income from dividends, interest and
royalties. However, in practice, the issue of ‘beneficial ownership’
is not subject to special attention by the Polish tax authorities.
1.5 Are treaties overridden by any rules of domestic law
(whether existing when the treaty takes effect or
introduced subsequently)
According to the hierarchy of sources of law included in the Polish
constitution (being the supreme legal act), Polish tax treaties (as
international agreements ratified by an enactment of legislation)
override domestic tax legislation (apart from the general provisions
of the Polish constitution applicable to tax matters).
In general, VAT must be charged by all individuals, legal entities or
other units that supply goods or services on a regular or permanent
basis in Poland. Certain transactions, however, are not covered by
VAT (i.e. supply of an enterprise or an organised part of an
enterprise). Certain transactions are exempt from VAT with the
right to a deduction (“zero” rate with the right to deduct input VAT),
i.e. exports, intra-Community supplies or services and sales relating
to international transportation. Certain transactions are exempt
from VAT without the right to a deduction, for example the sale of
real estate (excluding, for example, new buildings and building
plots) unless the taxpayer opts for taxation, financial and insurance
services, health care services. Under certain conditions, small
businesses can elect to be VAT exempt.
2.4 Is it always fully recoverable by all businesses If not,
what are the relevant restrictions
As a rule, VAT payers registered for VAT purposes in Poland can
deduct input VAT from the amount of output tax. Foreign entities
without a business presence in Poland may reclaim the tax charged
to them in a refund of VAT for foreign entities.
As a general rule, input VAT deriving from a business activity is
fully deductible, though input VAT on the supply of goods and
services used for exempt or non-business activities are not
deductible to the extent they serve these activities.
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