Poland went up in the prestigious ranking of Doing Business 2016 by three positions and took the 25th place within 189 countries. Ranking reflects the ease of doing business in the world.
Doing Business 2016: Measuring Regulatory Quality and Efficiency, a World Bank Group flagship publication, is the 13th in a series of annual reports measuring the regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 189 economies — and over time.
Polish jump to the 25th place in the latest ranking is good news for home business and potential investors. Doing Business measures regulations affecting 11 areas of the life of a business among others: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
Poland has been repeatedly shown in the report as an example for other countries. As an worthy example indication were the rules relating to the creation of a new law in our country. Representatives of the World Bank praised the transparency of the legislative process, including availability of projects on public websites. Poland was also praised for the progress in the implementation of online tax returns.
The Tax Ordinance will be supplemented with provisions that will make it easier to perform tax audit to foreign entities established in Poland – according to the draft amendment to the Tax Ordinance.
According to the Ministry of Finance, currently regulations often do not allow for the efficient initiation of audit process to taxpayers who are not Polish residents or are not having fixed establishments in Poland.
The current legal situation regarding tax audit shows that the audited is the taxpayer. In the case of a foreign company the taxpayer will be natural or legal person being not resident or established in Poland. “This results in practice with many problems associated with the initiation of control caused mainly by regulations of delivering notices and representation “- explains the Ministry of Finance.
Trouble concern cases where the facility does not have a legal form, and consequently – its representation on the territory of Poland. As a result, the tax inspection authorities have problems with checking the taxation of their business.
The Ministry of Finance is planning to enter an additional provision that allows (in a situation where audit concerns to fixed establishment of a foreign entity) showing the authorization to carry out tax audits and identity cards of the person who directs, supervises or actually represents the activities carried out on the territory of Poland. It will not be necessary to present these documents to the taxpayer.
Anticipated changes of a draft amendment to the Tax Ordinance was adopted by the Council of Ministers in March 2014
Regulations concerning the inspection of establishments foreign entities come into force 3 months after promulgation in the Official Journal.
Intertax representative will participate in this year’s European Economic Congress 2014.
The 6th European Economic Congress in Katowice – another edition of the most important business event of Central Europe will take place on 7-9 May 2014. The date is important due to a number of reasons. The Congress takes place exactly 10 years after the greatest enlargement of the European Union has taken place in the history of the Community.
For more information please visit: http://www.eecpoland.eu/about-eec/
A branch in Poland of a foreign company has the right to deduct VAT on purchased in Poland goods and services
NSA (Supreme Administrative Court) has ruled once again ( February 24th 2014 I FSK 353/13) the right for the foreign company permanent establishment in Poland to deduct the VAT from the purchased in Poland goods and services connected with the services related to the activities performed for the main company (headquarters).
The condition of that deduction is that the foreign company to show a relationship between purchases carried out by a branch in Poland and its activities abroad. It is important, however, that the foreign company conducts taxable activities.
It is worth noting that this is Supreme Administrative Court another judgment that confirms the right of VAT deduction by the branch (in the previous judgment from February 26th 2013 I FSK 493/12)
Amazon’s recent decision to open three distribution centres in Poland, creating 6,000 full-time and up to 9,000 part-time jobs, shows the country’s attractiveness as a base for logistics activities.
The past decade’s expansion of the EU to take in a further 94 million consumers has changed the logistics map of Europe. Hundreds of billions of euros of structural and cohesion funds are being spent to weave the new member states into the EU’s infrastructural fabric, providing better routes to market. Poland has a crucial importance in this new logistics geography. Located at the crossroads of Europe, between western and eastern Europe, between Scandinavia and the Balkans, with ice-free Baltic ports; standing astride trunk trans-European road and rail networks, Poland has developed into the region’s most significant logistics hub.
The new Convention for the avoidance of double taxation between Poland and the United States was prepared on a model OECD Convention on Income and on Capital.
Compared with the previous one the agreement amendments include: the scope of the taxation of the royalties, dividends, interest, revenue from immovable property, definitions existing in the contract Convention and the exchange of information. The basic method used in the convention will be exemption with the progression method. The method of proportionality will be applied in the case of income from dividends, interest, royalties, gains from transfer of assets and other income not covered by other provisions of the Convention. The agreement has a provision for the exchange of tax information.
The Convention shall apply to private individuals and legal persons resident or established in Poland, the USA, or in both countries.
Polish President Bronisław Komorowski signed in August 2013 the Act on ratification of a new tax treaty, signed in February by Poland and the United States. The agreement will take effect probably in the early 2014.
The 2014 edition of Warsaw Business Journal Group’s Investing in Poland project has been launched. The project involves an annual publication scheduled to be launched at a conference on September 17, as well as an Investment of the Year competition and a gala which will be held in October.
The project is organized by Warsaw Business Journal Group in cooperation with the Polish Information and Foreign Investment Agency (PAIiIZ), PwC, Bank Pekao and CBRE as well as eight chambers of commerce: the British, German, Spanish, French, Belgian, Dutch, Chinese and Indian.
Investing in Poland project consists of:
1. The Investing in Poland 2014 publication – an annual investment guide published since 2009. The fifth edition of the Investing in Poland publication will come out in September 2013.
2. Conference – WBJ will hold a conference in late September marking the launch of the publication. Discussion panels featured at the conference will examine investment conditions and incentives.
3. Competition and Gala – First launched in 2012 in cooperation with major chambers of commerce and industry. The competition will award the Investment of the Year Award. This year the competition has been expanded: there will be three awards instead of one: Small Investment of the Year, Medium-Sized Investment of the Year and Large Investment of the Year.
The main aim of the Investing in Poland project is to distinguish the most important foreign investments in Poland as well as show Poland’s potential for investors.
Investing in Poland 2014 is the fifth edition of the publication. It presents all regions of Poland as well as major Polish cities and their potential for investors. It also provides information on all the special economic zones in Poland. Since 2011 the publication includes a special Trendbook section portraying the most prominent and interesting trends in the Polish economy.
In addition to the English version, the publication will be translated into Chinese and Spanish, two of the top three most-spoken languages in the world.
The conference will feature the official launch of the Investing in Poland annual publication, as well as two panel discussions. The first will focus on investing in Poland, in particular on what cities and regions are doing to attract investors, and the other on outsourcing as an investment trend.
In the weeks following the conference WBJ will present the profiles of each nominee and finally the top investment in each category will be selected by a jury. The three top investments, assessed on the amount invested, number of jobs created, innovativeness and sustainability will be awarded at the October gala.
Last year announced greenfield projects or greenfield investments, the investments from the ground up, which amounted to 11.5 billion dollars, in terms of value Poland took second place in the European Union. Before Poland, was only the Great Britain, where the value of such projects amounted up to 41.2 billion dollars. Right after Poland placed Spain (11.4 billion dollars.), Romania (9.9) and Germany (8.5).
In the annual UNCTAD survey (United Nations Conference on Trade and Development) the investors were asked about the most attractive place to locate projects for 2013-2015 Poland placed 4th in Europe and 14th in the world. Poland was one of the five European countries classified as one of twenty locations in the world to be the most attractive for investments. Poland was in that group the only country from Central and Eastern Europe.
In our part of Europe Poland remains the absolute leader in terms of the cumulative value of incurred expenditures by foreign companies. The expenditures amount to 230.6 billion dollars. Czech ranked second with is 136.4 billion dollars. The third place was taken by Hungary (103.6 billion dollars.), followed by Romania (74.2 billion), Slovakia (55.8 billion) and Bulgaria (49.9 billion).
Investment attractiveness of Poland was confirmed at the annual survey conducted by the 16 German bilateral chambers of commerce and industry. They questioned 1623 companies with foreign capital that invested in our region. Poland this year is a leader of this ranking for the first time.
Poland ranked 27th in the ranking of the most globalized economies in the world, ahead of Italy, South Korea and Japan. As the report shows Poland is the most open for trade.
Globalization Index measures the relationship of the 60 largest economies in the world (in terms of GDP), with other countries, taking into account the criteria such as the openness to trade, the capital flows, the labor mobility, the exchange of the technology and knowledge and the cultural integration.
The study was prepared based on the interviews with 750 managers of global companies. The report shows that despite the low GDP growth observed in 2012 and the uncertain economic outlook, globalization continues to proceed. First of all, thanks to the technological development, and cross-border movement of knowledge.
The report also draws attention to the fact that more globalized are medium-sized markets with high growth rate, such as Vietnam, Malaysia, Thailand and the Philippines, as well as smaller European countries: Belgium, Slovakia and Hungary. The BRIC countries were on much further positions: Brazil on the 45th place, Russia on 48th, India at 54th and China at the 44th. On the top of the ranking were Hong Kong, Singapore and Ireland. Poland was on the 27th place.
The changing nature of business, technology development and investment opportunities in the markets will encourage rapid growth of globalization.
Challenge for Poland as a friendly to business country, will be the increase of the competitiveness of the investment compared to other countries of Central and Eastern Europe.
Unlimited duration of special economic zones operation certainly will help to increase the inflow of foreign direct investment into Poland.
Broadening the directions of expansion and export structure will allow Poland to even greater strengthening of Poland’s position on international markets the experts stated. The report shows that in category: openness to trade Poland ranks best.
Polish Ministry of Economy proposes a new tax break for most innovative companies. If the proposal passes as early as next year expenses incurred on research and development will be tax-deductible. The proposal of a new tax relief assumes that the company running the research and development can benefit from tax preferences (in filling PIT or CIT).
Ministry of Economy wants the a relief to be in force from the beginning of 2014. It is part of the Enterprise Development Programme until 2020, which is a part of the new European Union budget. With the new tax relief he innovativeness of Polish companies will increase, the experts stated. The project is currently at the stage of inter-ministerial consultations. Today, the companies that choose to invest in research to improve the quality of their products may include expenses incurred as tax deductible costs, but they cannot take advantage of tax relief for the creation of innovative products.