Poland has seen significant reforms to its tax and business compliance regime over the past year. While these changes ultimately make things better for companies and individuals – particularly in the area of digitalization – some take time to work through the system and have increased the complexity of doing business in Poland. It is therefore even more important than ever for foreign companies to seek expert advice when incorporating or conducting business in Poland.
Poland is one of the most attractive places in Europe for the establishment of foreign companies. The country offers high levels of economic stability, a well-educated and diverse workforce, and a favorable location in the heart of Europe.
Wholesale regulatory changes introduced over the past 12 months aim to simplify and modernize Poland’s corporate tax and compliance regimes. However, due to the scale and speed of these reforms, many companies have struggled to comply with the new rules.
As changes operate in the system, things improve almost daily, but the Polish tax and regulatory environment remains very complex. This is the main reason Poland ranks tenth in the TMF Group’s 2022 Global Business Complexity Index, making it one of the most complex jurisdictions in the world to do business.
Here are some examples of the complexity that foreign companies wishing to do business in Poland should be aware of:
- Polish corporate tax rules vary depending on the type of activity in which the company is involved.
- Environmental obligations in Poland follow EU regulations, but are generally stricter and require specific registration and mandatory reporting to Polish authorities.
- Likewise, mandatory disclosure rules are stricter in Poland than in the EU as a whole and cover internal transactions above a certain value as well as those that cross borders.
- Most official business applications and declarations can now be submitted electronically, but must be signed using a qualified certificate that complies with EU Electronic Identification, Authentication and Trust Services (eIDAS) regulations.
- Polish labor legislation is complex and constantly changing, especially for people working for foreign companies in Poland.
- E-invoicing, along with real-time tax reporting, will become mandatory in Poland from January 1, 2024. New reporting requirements create significant challenges for businesses as they prepare their systems and processes to comply .
The challenge for foreign companies operating in Poland is that no two situations are identical, and there are many potential areas of non-compliance for those unfamiliar with local rules and regulations.
TMF Group’s local experts in Poland have considerable experience in helping foreign businesses navigate this complexity – minimizing risk while maximizing rewards – in all aspects of entity registration and management, accounting and taxation, human resources and payroll.
Find out how TMF Group can help companies meet the challenges of doing business in complex jurisdictions here.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.