The Polish government has made concerted efforts in recent years to ease bureaucracy and improve the business environment for companies and those looking to invest. However, it’s still easy to fall foul of local regulation.
This has been illustrated in TMF Group’s latest survey of Eastern European Finance and Human Resources managers.
- 53% of CFOs said they experienced difficulties remaining compliant with Polish (and their own internal) reporting standards.
- 33% of CHOs admitted that they are affected by frequent labor regulatory changes.
On 1 January 2017 a number of tax regulation changes entered into force, including new income tax rules. One of the most important changes is an additional tax obligation. Polish tax and tax audit authorities can now apply an added sanction tax liability.
Sanctions are determined where authorities decide the taxpayer, in their submitted declaration:
- indicated a liability amount lower than the amount due; a tax refund amount or assessed tax amount higher than the amount due
- indicated an amount to be settled in the following periods higher than the amount due
- declared the tax refund amount or the tax to be settled in the following periods instead of the tax liability subject to payment.
Employers in Poland should also be well aware of, and now adhering to, a labour law change that increased the minimum monthly salary. Rising to PLN 2,000 (from PLN 1,850) inclusive of tax, if a wage paid to a full-time employee since the start of this year is an amount lower than this minimum wage, it is an infringement of Polish employee rights.
2017 has also seen some favourable regulation changes for those operating in Poland. A decrease of the Corporate Income Tax (CIT) rate sees some companies able to pay reduced CIT of 15%. It applies to ‘small’ taxpayers and others in their first year of operations.
Be wary of the restrictions however, as the main CIT rate of 19% is otherwise applicable.
The benefit of local support
When faced with local complexity, many foreign – and even domestic - companies in Poland look externally for support. TMF Group’s research shows there’s a strong need in the business community for swift adaptability, automation of non-core business functions and systems implementation, such as ERP.
This is where local business partners such as ourselves come in. Partnering with in-country HR, payroll, accounting, tax and legal professionals provides compliance peace of mind. And it gives businesses the increased bandwidth internally to be more competitive in the market.