Changing the company's location is normal in the modern economy. Business players change not only countries, but also continents. Is that a reason to punish someone? Turns out it is. It's another change in the tax sealing series, asking if it's too much. It could be considered that this is only an implementation of the EU Directive. However, there are doubts as to whether the proposed change is actually going in the direction outlined by the EU.
The planned new tax on changing the country's business position is nothing new. Some countries already use this design. However, this does not mean that this tax must look the same everywhere.
Exit tax in Polish version
The potential difference concerns whether it is a fee for the mere fact of the change of location or just for ‘tax tricks’ of an international nature. The change in the registered office of the company can only be illusory and yet tax-friendly savings. It seems that the Polish government has chosen a broader version and intends to punish not only for aggressive tax optimization.
The new tax will include companies changing locations from Poland to another. Individuals (including non-business persons) will also be paid. The key issue is holding securities (e.g. shares on the Warsaw Stock Exchange). The Polish holder of securities who wants to live abroad will pay a tax on potential profits, i.e. unrealised. If, after paying the tax, he sells securities below the purchase price, there will be something like a ‘taxed loss’.
19% or 3% tax
We have already learned the rates of the new tax on business escape from Poland. Basic rate 19% and reduced rate 3%
Companies sometimes decide to choose another jurisdiction for business reasons. However, individuals can change their country of residence for personal reasons, not to avoid paying taxes or some form of tax optimization.
Rate foreseen for companies (19%) will include, for example, transferred shares or other securities. The rate for natural persons may be set at 19% or 3% There are opinions that the EU Directive is very generally worded, and this increases the possibility of implementing it in a way contrary to its basic premise.
The European Union's authorities would rather want to limit aggressive tax optimization rather than some form of financial penalty for moving business or abroad. one from the basic assumptions of the Community is the free movement of capital.
Tax sealing is an area where moderation and reasonableness are needed. Overzealousness can paradoxically reduce revenue to the budget. The provisions which do not maintain this moderation may discourage a potential investor at the outset and at the same time reduce the tax to zero.
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.
source: https://www.forbes.pl/opinie/exit-tax-rzad-wprowadzi-sankcje-za-wyprowadzke-z-polski/bqefsw4