Members of the tax group are jointly and severally liable for the CIT liabilities of the group for the period during which the tax group agreement remains in force. Why Set Up Your Business in Poland? Patents protect inventions that are new, have an inventive step and are capable of industrial application. The main role of the Data Protection Office is to control and monitor the processing of personal data, review complaints of data subjects, conduct inspections, issue decisions and impose fines, oversee accreditation, grant certifications and issue interpretations and guidelines. As in a general partnership, there is no minimum share capital requirement. The company is treated as a legal entity separate from its shareholders. Employees whose contracts are terminated in a group redundancies procedure are entitled to additional severance pay of one, two or three months' remuneration, depending on the duration of their employment (respectively: less than two years, from two to eight years, longer than eight years). Employment contracts may be terminated with or without notice or by means of a termination agreement. Ongoing tax and employment-related reporting duties (eg, in respect of taxes and various social security contributions) will also apply. Polish law does not currently recognise the concept of "piercing the corporate veil" and attempts to introduce the concept have so far been unsuccessful. Under the new withholding tax pay and refund mechanism which, following a number of postponements, is currently expected to come into force from January 2021, in respect of payments above this threshold, the tax remitter is obliged to collect withholding tax at the standard statutory rates of 19% or 20% (subject to a refund mechanism) unless: Significant fines apply if, in the absence of an exemption, a tax remitter does not collect the statutory withholding tax. Poland took also second place in 2018 year's ranking of Data protection issues are principally regulated by the EU General Data Protection Regulation (Regulation 2016/679 – the GDPR). employment contract for a probationary period; employment contract for a fixed term; and. Additionally, the author may request publication of an announcement in the press or payment of an appropriate sum of money to the copyright holder. Contracts can be added together, but no more than three. The Doing Business 2020 study shows that developing economies are catching up with developed economies in ease of doing business. To obtain a patent, the following must be filed with the Patent Office: the application, containing a motion, a description of the invention, claims and an abstract of the invention. Certain regulators, eg, the Polish Financial Supervisory Authority, expect various specific commitments from both foreign and domestic investors who wish to acquire large stakes in regulated financial institutions. 6 Mins Read. With over 38.5 million people, it is the largest market in Central and Eastern Europe and the eighth-largest economy in the European Union. To register an industrial design, an application containing an illustration of the industrial design must be filed with the Patent Office. In respect of certain sectors, where the formal consent of the regulator is not required but a change in the shareholding would trigger certain rights for the regulator, it is usually recommended, where feasible and practicable, for the proposed investor to introduce itself to the regulator before making the investment in order to determine whether the investment would raise any concerns for the regulator. Poland has also been ranked by Bloomberg as the best country for doing business in the Central and Eastern European (CEE) region. The main reason one invests is the future prospect of benefit. in particular, from 2018 the costs of certain intangible intra-group services will not be tax deductible to the extent they exceed 5% of EBITDA. In response to the COVID-19 pandemic, a new FDI act has been enacted that would introduce a clearance procedure relating to the acquisition of control over, or a significant share in, certain Polish companies by non-EU/EEA investors. Social security contributions may differ slightly from the above if an individual is employed under a civil law contract (as opposed to an employment contract) or is self-employed. The hiring and onboarding process in Poland is not unlike like the rest of the European Union, with a handful of key exceptions – or nuances. Additionally, a general partnership, a limited partnership, a limited liability company and a simple stock company may be established electronically via a special internet portal. In response to the COVID-19 outbreak, some temporary regulations have been introduced in Poland to address the problems employers may encounter. The relevant labour office must be notified of the agreement concluded or the by-laws issued. A transaction does not have to be notified if any of the following exemptions applies: Additionally, the following transactions fall outside the merger control system: There is no formal pre-notification procedure in Poland, although consultations with the PCA prior to a transaction are possible. In contrast to regular competition law proceedings before the PCA (where one may appeal to a special court), the new FDI regime will follow the standard administrative appeal route; appeals will be decided by administrative courts. Are you a Central & East European enterprise seeking to make an investment, develop or go public in China? However, certain matters listed in the Commercial Companies Code or partnership deed require the resolution of a general meeting. In respect of partnerships that are tax transparent, tax is payable by partners (CIT for partners being legal entities, PIT for individuals). Nevertheless, members of the corporate bodies may be exempted from this liability under the business judgement rule. There is no minimum number of shareholders, so the simple stock company may have only one shareholder. Therefore, investors from EU or EEA or EFTA member states may invest according to the same principles as Polish citizens and are not treated as foreigners. An "inventive step" means that the invention is not obvious to a person skilled in the given field, whereas "capability of industrial application" means that based on the invention, a product may be obtained or a method used in any industrial activity. Companies are obliged to notify the registry court of any changes to information disclosed in the register, such as the composition of their decision-making bodies, rules of representation, registered office and address, amount of share capital, and the names of their shareholders or partners. Costs that are not deducted in a given year due to the above mechanism may be carried forward for up to five consecutive tax years. Poland is located in central Europe, neighbouring Belarus, Czech Republic, Germany, Lithuania, Russia, Slovakia, and Ukraine.Spanning over 304,255 square kilometres of land and 8,430 square kilometres of water, Poland is 70 th largest nation in the world with a population of nearly 40 million. in the case of natural persons – persons who are not citizens of an EU/EEA/OECD  country; or. Third parties have three months to file an opposition to a trade-mark application on the basis of their earlier trade marks or other rights. The next step is to file an application with the National Court Register (Krajowy Rejestr Sądowy) to enter the company in the business register, which usually takes four to six weeks (sometimes longer). at least 30 employees, where the employer employs 300 employees or more and the redundancies are made during 30 consecutive days. If the industrial design meets the statutory requirements for granting protection, the Patent Office issues a decision granting protection. In addition to the remedies available in the case of infringement of a patent, the trade mark holder may demand that the infringing party ceases placing a mark identical or similar to the registered trade mark on packaging, labels and tags, or ceases offering, marketing, importing, exporting and storing such packaging, labels and tags. Overview. Patent protection lasts up to 20 years (subject to payment of annual maintenance fees). We aid companies in managing their taxes - for 30 years in Poland, PwC Legal offers comprehensive support in areas of law relevant to the business. In particular, except for the financial sector, where a specific act applies, and some specific positions in other sectors (where, by law, the employee must have a clean criminal record), background screening of employees and candidates (especially as regards any criminal record) is substantially restricted. Health insurance contributions would also apply at a rate of 9% (7.75% of the tax base is tax deductible; the remaining 1.25% is not). Like EU competition law, the Polish Act on Competition and Consumer Protection prohibits agreements/concerted practices between undertakings (or associations of undertakings) that have as their object or effect the elimination, restriction or other infringement of competition (Article 6). Finally, some consents (eg, antitrust approval or consent of the Polish Financial Supervisory Authority to acquisition of certain stakes in a bank or certain other, regulated financial institutions) may be required irrespective of whether the investor is foreign or domestic. However, this presumption may be challenged by the undertaking involved. The management board deals with the company's affairs and members are appointed and removed by the supervisory board, unless the statutes provide otherwise. Poland is classified as a high-income economy by the World Bank and ranks 22nd worldwide in terms of GDP (nominal) as well as 40th in the 2020 Ease of Doing Business Index. 2017 Accounting Auditing Business Services Consulting/Advisory Doing business in Poland HR International Business Investing in Poland IT Solutions Legal Payroll Poland Tax Publications Download the brochures providing general information and outlining the … Industrial design is a new and original appearance of a product, or part thereof, resulting from the features of its lines, contours, shape, colours, texture and/or materials of the product itself and/or its ornamentation. There is no minimum number of shareholders, so the limited liability company may have only one shareholder. A professional partnership (spółka partnerska or sp.p.) Copyright protection does not depend upon a registration process or satisfaction of any formal requirements. A partnership limited by shares must have at least one general partner and at least one shareholder. However, in order to enjoy the same rights as Polish citizens, foreign investors need to meet certain criteria, eg, obtain a residence permit in Poland, otherwise (save for where international treaties provide differently), an investor may only participate in a limited liability company, joint-stock company, limited partnership or partnership limited by shares. The organisational structure is very flexible. The minimum share capital will be PLN1 and all shares will be dematerialised (ie, there will be no share certificates). In the event of violation of a business secret, the entrepreneur may demand cessation of the violation, removal of the effects of the violation, a relevant statement, redress of damage, the surrender of any unlawfully obtained benefits, or the award of an appropriate sum of money for social purposes associated with supporting Polish culture or protecting the national heritage. The management board manages a company's affairs and has executive directors, whereas the supervisory board (with non-executive directors) or, less commonly, the audit committee, monitors its activities. However, a company that has more than 50 employees is obliged to inform employees of the possibility of setting up a works council. As a general rule, the PCA should examine the transaction within one month of the date the merger control proceedings are instituted (Phase 1). The law provides for certain exceptions where the limits may be exceeded without the contract becoming a contract for an indefinite term, including conclusion of a contract for a term of office or a situation where the employer can objectively justify exceeding the limit. Published by Adriana Sas, Nov 2, 2020 The statistic shows the ease of doing business (EODB) ranking of Poland among 190 economies measured by Doing Business 2020 study, broken down by … Your Doing Business in Poland trainer will be assigned to you following the results of your diagnostic consultancy according to your objectives and areas of focus. loss of the qualifications to perform work in a given position through the fault of the employee. Under Polish law, leniency (immunity or reduction of a fine) is available for both horizontal and vertical agreements. Furthermore, the Polish government may change the list of the affected companies and is entitled to introduce additional exemptions. The role of the supervisory board is to exercise day-to-day supervision over all areas of the company's activity. is the most popular form of corporate vehicle in Poland. Databases that are collected in a way requiring, in terms of quality or quantity, substantial investment of effort to compile, verify or present their content are protected by the Act on the Protection of Databases. The notification obligation is triggered if either of these thresholds is met; the thresholds need to be met by one party only. Certain additional reporting duties vis-à-vis the National Bank of Poland may apply regarding, among others, foreign exchange transactions and other financial matters. In general, under Polish law there are no requirements to negotiate with trade unions or works councils when a Polish company or its assets are being acquired. Termination without notice can take place where a doctor diagnoses a detrimental effect of work on the health of the employee and they are not transferred to another position, or where the employer severely breaches its basic duties to the employee. There is no special regime for the protection of software. In these areas, the relevant regulatory bodies may be authorised to revoke licences for state security interest reasons. A limited number of reliefs and allowances may be available to employees, for example, for the use of the internet and for certain donations made to charity and/or if they have children who are: Tax deductible costs (other than social security and health insurance contributions) for employees are lump sums ranging from PLN1,335 to PLN2,502.56 per annum. In 2018, a split payment mechanism applied to some B2B transactions, whereby the VAT portion of the amount payable by a buyer to a vendor of goods or services was credited to a dedicated VAT bank account from which funds may, in principle, have been used only for payments of the VAT portion of the prices payable to vendors and for VAT settlements with the tax authorities (including VAT refunds). In principle, employees in Poland are subject to PIT at the rate of 17%, provided that a 32% rate applies on the portion of the taxable profit exceeding PLN85,528 in the tax year. Detailed below is the profile of a member of our culture training team. From 1 March 2021 all shares in joint-stock companies will have to be dematerialised (ie, no share certificates will be in place going forward) and each share transfer will become effective upon registration in the shareholders' register and shareholders will no longer be able to remain anonymous. The process of incorporating a corporate vehicle begins with signing the articles of association or deed of formation. Additional provisions are currently undergoing the legislative process, which will make it possible for employers to send employees on mandatory leave, but only using the overdue holiday entitlement carried over from previous years. As the burden of proof will rest entirely with the management board member, it may sometimes be very difficult for the member to succeed in being released from liability. For employment contracts for a fixed term and an indefinite term, the notice period i: two weeks if the period of employment lasted less than six months, one month if the period of employment lasted at least six months, and three months if the period of employment lasted at least three years. New business guide, published by MGI Worldwide member firm ABC Audit provides valuable insights into the … Employees may be ordered to work remotely and if they are to perform work at the workplace, new health and safety rules must be abided by (including providing disinfectants and ensuring social distancing). The fundamental difference is that a joint-stock company may raise its capital by public subscriptions and issue shares in the form of securities. In 2016 Poland introduced rules on combating tax avoidance, ie, any act that satisfies both of the following conditions: If the tax authorities identify an act effected primarily with the aim of achieving a tax advantage, the tax consequences of the relevant act are determined based on the state of affairs that would have existed if an "appropriate act" had been effected. The minimum share capital of a partnership limited by shares is PLN50,000 and the nominal value of one share may not be less than PLN0.01. However, in simple stock company, a one-tier model may be introduced instead of the typical two-tier model. The managing and supervising functions are divided between the executive and non-executive directors, while the right to represent the company in relations with third parties is vested in both types of director. In 2019, Poland's gross domestic product (GDP) grew by 4.1%, spurred by higher wages and increased domestic consumption. in the case of the acquisition of control and/or assets – if the target's turnover in Poland did not exceed EUR10 million in either of the two financial years immediately preceding the concentration; in the case of mergers as well as the creation of a joint venture – if the turnover of any party to the merger or JV did not exceed EUR10 million in Poland in either of the two financial years preceding the concentration; and. Basic information about Poland. Any change to the terms of employment should be made in writing. The same applies to individual employment contracts. Now a modernised economy and a regional power it has the 8th largest economy globally. An agreement that violates competition law is invalid in its entirety or in the anti-competitive part. The abuse may consist, in particular, of: A dominant position is held by an undertaking if it enables it to prevent effective competition in the relevant market and to act independently of competitors, contracting parties and consumers to a significant degree. If the status of a tax group is lost as a result of a breach of the applicable obligations, each participating company will have to adjust its tax filings for the most recent three tax years (as if the tax group did not exist) and, where applicable, settle any outstanding taxes. Business secrets are protected under the Polish Act on Combating Unfair Competition. The members of the management board (and directors of the simple stock company) may be jointly and severally liable for the company's debts in terms of all their assets if enforcement against the company proves ineffective (ie, if the company's assets are insufficient to cover the claims). The higher addition applies if overtime work is performed at night, on a Sunday or a holiday, or on a day off granted to an employee for work on a Sunday or holiday, and also for every overtime hour exceeding the weekly working hours. The partners' liability is similar to that in a general partnership, but the partners are not liable for the partnership's obligations arising in relation to the practise of professions by the other partners or resulting from acts or omissions of the partnership's employees who are supervised by another partner. In 2020, however, growth is expected to … Limited partners may represent the partnership only on the basis of a power of attorney granted by the partnership, although management of the partnership is the general partners' right and duty, decisions on matters exceeding the ordinary scope of the partnership's business activity require the consent of the limited partners as well. Presently, the basic legislative framework for business activities in Poland is provided by the Civil Code of 1964, the Commercial Companies Code of 2000 and the Act on Entrepreneurs of 2018. Incomes from different sources are not mixed and tax is calculated for each source of income separately. Fast growing economy. A limited partnership must have at least one partner who is the general partner and at least one partner who is the limited partner. Therefore, holding a shareholders’ meeting will be less burdensome than for joint-stock companies. Today, the team in Warsaw consists of 93 lawyers (including nine partners) who support clients across all sectors and practice areas in some of the largest and most innovative transactions in the region. 19% on dividends and other capital gains and interest payable to individuals on some debt instruments. The right conferred by registration of an industrial design is granted for 25 years, divided into five-year periods. The basic VAT rate is 23% (reduced rates of 8%, 5% or 0% may apply to some goods and services). If an employer with at least 20 employees terminates some of their employment contracts for reasons not attributable to the employees, it is referred to as "collective redundancy" if it involves: The employer is obliged to consult the trade unions of the intention to carry out group redundancies and must also notify the trade unions of, among other things, the reasons for the planned redundancies, the number of employees to be made redundant and the period during which the redundancies will take place. Under the new transfer pricing regulations introduced in 2019, where a markup of 5% applies in respect of certain low-value services such as accounting, HR, legal, tax or IT services, these will be recognised as rendered on an arm's length basis. The Act expressly identifies a list of items which cannot constitute tax-deductible costs. In the case of the companies, they come into existence upon the conclusion of the articles of association, but upon registration they receive legal personality. Cost of living in Poland – 2020 guide. A partnership is established upon registration. Employees who do not intend to benefit from any reliefs and allowances can ask their employer to file on their behalf. Copyright consists of economic rights and moral rights. The new regime will affect the following: A de minimis exemption for target companies with revenue below EUR10 million in any of the two financial years preceding the notification applies. Poland is one of the fastest growing economies among the countries based in Central Europe. Brief description of the taxation and business forms which may be used by Foreigners in Poland. In such a case, there is no requirement to draft the articles of association in the form of a notarial deed. However, there are some exceptions, where the case is heard by the regional court in the first instance and is then appealed before an appeal court. An employee can terminate an employment contract with or without notice. Doing Business in Poland - Nov 4, 2020. The Supreme Court's role is to ensure uniformity and accuracy of interpretations of the law and to issue opinions on statutes. Also other reports prove that Poland is agood place for investments. severe violation of basic employee duties; committing a crime which makes it impossible to continue employment in a given position; and. Market Overview. In the long-term, the Ease of Doing Business in Poland is projected to trend around 24.00 in 2021, according to … Moreover, non-compliance with the new FDI Regime will constitute a criminal offence subject to a penalty of imprisonment from six months to five years and a fine of PLN50 million (approximately EUR11 million). 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