GAFA tax aimed at US corporations means specific budget revenues. However, Morawiecki's government does not want to spoil relations with the US, especially as it is fighting for visa waiver.
The digital tax, or so-called GAFA tax, which has adopted the name from the largest technological giants (Google, Amazon, Facebook, Apple) has been mentioned since July 2019 It was then that France decided to introduce the tax to its tax jurisdiction.
The introduction of a digital tax would undoubtedly have a significant contribution to our country's budget. However, the issue for today is not simple for the government and it is not known whether the work on the Tax Act on certain digital services will continue
In July this year, France, in order to combat tax avoidance, eventually passed legislation imposing on digital giants such as Google and Facebook a income tax of 3% According to the French government in 2019 The tax is to bring 400,000,000 EUR revenue to the state budget and in 2020 – 650,000,000 EUR.
Not the taste of the USA
Poland was also to follow the French. The Ministry of Finance also announced that it intends to prepare a bill imposing a tax on digital giants on revenue generated in our country. This law would also cover American technology companies. However, 2 September, After the visit of Vice President Mike Penc of the United States, in the country on the Vistula we can look forward to the taxation of technological giants.
After the visit of the vice president of the United States, the work on the bill may be suspended, as it was Mike Pence who expressed his gratitude that Poland rejected the proposal for a digital service tax, who informed the public that Poland had abandoned its intention to introduce this tax. Pence addressed the subject at a joint conference attended by President Andrzej Duda.
It is clear that the U.S. government would not be pleased to introduce such rules in Poland. According to U.S. Government Trade Attorney Robert Lighthizer, the U.S. is “very concerned that the tax on digital services (...) will actually hit US companies”. Therefore, at the request of U.S.
President Donald Trump, the effects of the planned legislation are to be examined, as well as the possible impact on trade between the United States and France. This is why Poland most likely deviated from the design of technological taxation of giants.
Prime Minister Mateusz Morawiecki, however, says that it does not exclude the introduction of a digital tax in Poland.
The Prime Minister points out that Poland as a Member State of the European Union must wait for the European Commission's findings supported by the Organisations for Economic Cooperation and Development (OECD) on the implementation of new rules.
Prime Minister Morawiecki also reassured that these changes would not bring "so many measures, so it is not some important tax source for the government". In contrast, looking at the figures of potential receipts to the French digital tax budget, we can get a completely different impression.
A visa or a tax?
The introduction of a digital tax would undoubtedly have a significant contribution to our country's budget. However, the issue is not simple for the government today and it is not known whether the work on the tax on certain digital services will continue. We can only assume that the Polish government is playing on time, blocking good relations with the European Union and claiming that a digital tax will be introduced if the EU decides to do so.
In fact, the government may not want to make very good relations with the United States worse, and that is when citizens are waiting to be informed of the inclusion of our country on the list of countries that will participate in the visa-free movement. It is also unlikely that the Polish government, after thanks from the Vice President of the United States, will work on the bill itself without pressure from the European Union.
Source: https://www.forbes.pl/opinie/rzad-moze-wycofac-sie-z-podatku-cyfrowego-w-zamian-za-zniesienie-wiz/bcwr3jv
Author: Andrzej Dmowski
Lawyer and Doctor of Legal Sciences of the University of Warsaw. From 2011 one from Managing Partners in Russell Bedford Poland. Previously on the BDO advisory network, as well as Deloitte & Touche. Author of the book “Transfer Prices”, co-author of the commentary “The Corporate Income Tax Act”, author of many publications on tax law.