Tax risk

Foreign entities starting a business in Poland do not have to opt for setting up a local company. After all, running a business in Poland may take on different forms: you can set up a branch, hire local employees or merely partly transfer some processes (e.g., establish a warehouse or a design office). Sometimes foreign entrepreneurs decide to enter into close cooperation with an independent entrepreneur operating in Poland.

At present, the tax authorities are becoming increasingly interested in taxable permanent establishments of foreign enterprises in Poland. The tax authorities are taking a close look at them, because it affects the place of taxation of the income earned by a given enterprise.

Article 15e, in force until the end of 2021, limited the taxpayer’s right to treat expenses on intangible services purchased from related parties as tax-deductible costs. This provision caused many concerns, and it seems that they continue despite the fact that the said provision has been repealed…

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…

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.