RSM Poland is proud to announce that our Team has established RSM Poland’s blog! First seven blog posts are already publicly available at http://www.rsmpoland.pl/en/blog in as many as five different languages!
The RSM Poland Blog is a practical guide to taxes and business. We would like to use it as a tool for communicating some of the most interesting tax and economic topics, discussing issues related to incorporation and organisation of companies, touch on transfer pricing and reporting in accordance with Polish and international standards, as well as to study other key notions commonly related to running and managing a business.
Feel free to follow our posts, comment and ask questions.
„RSM Poland Blog” is a magazine entered into the Register of Newspapers and Magazines under no. RPR 3381 of the District Court in Poznań, I Civil Department.
The publisher: RSM Poland Spółka Doradztwa Podatkowego S.A.
The publisher’s and the editor’s address: Droga Dębińska 3b, 61-555 Poznań
Editor-in-chief: Izabela WOŹNIAK
Company valuation is a topic most managers and owners are likely to face at some point in running their large-sized businesses. The study is usually elaborated in connection with a prospective company acquisition/sale transaction, allotment of an organised part of the company into the structures of a new entity, or in relation to conditions imposed by regulations on financial review. These are, of course, only some examples – the list of circumstances that require or simply contribute to preparing a professional company valuation is much longer.
Choosing the right business form is of uttermost importance to every entrepreneur. Therefore, before you make the decision it is advisable to learn about all the resulting consequences. If you happen to be a Polish entrepreneur, the task seems rather simple (at least in theory): you browse the Internet (thousands of posts, but which ones are credible?), check on friends and their experiences, and finally there’s a phone call to the Companies House to check out the mundane side of starting a business (what forms need to be submitted, where to pay your fees and how much?).
Anyone who has ever had the pleasure of attending classes in programming almost certainly had the chance to plumb the mysteries of a programming language known as Turbo Pascal. If so, the phrase in the title of our first post surely sounds familiar. "Hello World" – the words our very first "programme" would usually display on the monitor of our computer. Back then, these two words meant the beginning of an adventure with a new, inspiring tool that would offer tremendous opportunities, namely programming. What better title could there be to celebrate the start of an adventure that may perhaps be different, but still as fascinating and inviting: an adventure with transfer pricing.
From a board member's point of view, an entrepreneur's or that of a foreigner delegated to develop the company's branch in Poland, the subject question is of fundamental meaning. The answer, as is often the case with taxes, is unambiguous. It all depends on how apt you are to take on extra risks and how much spare time you may allow yourself to spend on solving tax riddles…
The first months in Poland, as in any new place, are challenging: a foreign country, new people. It may still be the same company, but work organisation is somehow different. Not to mention job challenges – new tasks, time pressure and HQ are keeping their eye on you... At this point the CFO who had been delegated from Germany to Poland is showered with unfamiliar documents from HR: declaration of this, declaration of that, one information request, then another, further summaries, and on top of all: Forbearance of fiscal crime doer punishment. What is that even supposed to mean??? Just a warm welcome to the institution of income tax in Poland; or rather to those who have the daily 'pleasure' of dealing with the Polish Tax Office.
Let's say I purchased a company and...
... not everything is quite as I had assumed, although nobody was trying to cheat me. Does that sound familiar? I fear it does. In my job I work with people who are in charge of deciding whether to acquire another company, and if so – for what price. In the course of negotiation the price is usually established as a multiple of EBIT/EBITDA/net profit. I am personally not a supporter of this method. In my opinion it is much better to evaluate a company using the DCF methods in three scenarios: positive, neutral and negative. But who has time for such things these days? Due to its simplicity the multiple method is gaining many supporters among decision-makers.
More than once did I wonder what is the actual meaning of auditing services in Poland. And I came to the conclusion that this meaning is still “greatly underestimated”.
An audit of a financial statement is so much more than just a verification for correctness. I believe a financial audit is, most of all, an opportunity to identify the organisation's “weak points”, allowing management to minimise existing though not always realised risks.