Polish Deal in the perspective of the employee and employer

Polish Deal this is our plan for the time after the pandemic, which presents proposals for many areas of social and economic life. A plan that provides for actions and investments in health, family and energy. This is our response to post-covid reality[1].

This information is provided by a specialized website established to give citizens an insight into New Polish Deal Economic. But so far, we have no specifics, and the only thing we know is that the plan - with a high probability - will harm entrepreneurship through a revolutionary change in shelling.

We are already in trouble at the beginning because we really know as much as nothing. It is true that government representatives in superlatives themselves are spreading about future solutions to support the post-covid economy and to ensure a transition through the economic crisis with a slight footing. However, there are no specifics.

There are no draft laws, no public consultation or outlines of possible solutions. At the moment, only promises of concrete changes have been announced. This therefore resembles a much more electoral programme than the actual draft reform.

It is full of top-notch slogans about improving the situation of citizens and arranging the tax system. However, sometimes the final legal arrangements do not meet their hopes.[2].

However, this situation is about to change, because according to the announcement of Minister of Finance Tadeusz Kościński from 17 June 2021, June 1 July The draft tax changes are to be presented.

The workers will be happy...

Among the most noisy tax announcements in Nowy Polish Deal The increase in the tax-free amount to 30,000 PLN and change second the tax threshold of 85,528 PLN to 120,000 PLN. This will definitely delight those who earn the least, as it can effectively reduce their taxation.

It is also definitely positive that this amendment will allow at least to be added to the so-called "European media" in terms of the amount of the tax-free amount. So far, Poland has been a European tail, just ahead of Romania, point (w) Bulgaria and Hungary. Our country also ranks much lower in this respect than economies such as Botswana (by figure). 12,384 PLN, Morocco (11,127 PLN), Zambia (3,570 PLN) or Tanzania (3,960 PLN).

In addition, as announced by government parties[3], The reform is also to be neutral for the "medium class" thanks to a special relief. This applies to employees with income from 6,000 to 11,000 PLN A month.

…But the employer no longer

The attitude of employers towards these reforms is completely different. It is difficult to say that they are beneficial to them. Surely it is not possible to determine the fact that entrepreneurs will earn better[4]. This is definitely a positive issue, but for workers not employers.

Although government parties announce a number of reliefs, including for innovation, company development or for the investor. However, there are no more details except those already introduced, such as the Estonian CIT, which at this moment did not have a spectacular success[5].

However, it is clearly clear that the way to cover tax cuts for the poor will be to increase taxes for employers. This is, of course, about abolishing the possibility of tax write-off 9% health contributions to self-employed people. Although the Ministry of Finance reiterates that this change does not mean a new tax, in the end this contribution has been paid for years, the increase in the amount of paid dan could certainly be considered an increase in the fiscal burden.

The main reason for this change is to equalise the position of those employed on the employment contract and those engaged in a single business activity. However, other conclusions can be drawn, given the amount of budget revenue that will be contributed to this.

Questions Unanswered

With a more precise assessment of the proposed tax solutions, it is necessary to hold for the present moment until the contents of the amended laws are discovered. As with tax matters, “the devil is in the details.” Often, something that is supposed to provide tax benefits is covered with so many conditions that, at the end of the day, the rule does not fulfil its basic functions.

Lack of specifics causes websites and between taxpayers to spread rumors about possible solutions that the government is not talking about. one of these would be information that the tax-free amount would be valid only to a certain level of the tax base, and after exceeding its tax would be counted as if it were not at all.

Every day we learn new information about Polish Deal as a result of statements by politicians or servants of the ministry. They do not always dispel the inherent doubts. In the case of health contributions they are to be calculated on real income, as confirmed by Deputy Minister of Finance Jan Sarnowski[6].

But he did not explain what it meant. If a loss is achieved, will the taxpayer not pay health contributions? Will it be paid only at a minimum amount? How will this affect the use of NFZ? In the case of taxable persons settling on a flat-rate basis, will the contribution be calculated on the basis of operating income?

As you can see from a simple statement, a lot of questions have sprouted, and that's just one many reform issues. All that remains is to hope that the announced reform bill will remove more doubts than it will.

Damian Kuszewski

The author is a graduate of the Warsaw School of Economics in Finance and Accounting, and a graduate of the Faculty of Law at SWPS. From 2018 Associated with Russel Bedford Poland. His professional interests are tax law and, in particular, income taxes.

[1] http://polskilad.pis.org.pl/

low income worker

an entrepreneur whose employees will earn better

pensioners