German Desk insights

The Court of Justice of the European Union issued a judgement on April 7, 2022, in the case of a Romanian company, Berlin Chemie A. Menarini SRL with the participation of a German parent company, Berlin Chemie AG, which may be of considerable importance for the correct understanding of the concept of a fixed establishment in terms of goods and services tax.

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.

Shortly after the results of the US presidential election were announced, Kamala Harris, the first female Vice-President in the history of the United States, said: “While I may be the first woman in this office, I will not be the last, because every little girl watching tonight sees that this a country of possibilities” and this message travelled the world with a lightning speed. With these words, she empowered American women and encouraged them to take up key positions.

Entrepreneurs from German-speaking regions are more frequently asking us about getting A1 certificates for their employees. Let us remind you that an A1 certificate is issued to confirm the social security legislation that applies to its holder. Therefore, this certificate is very important for all those who travel around the European Union, European Economic Area or Switzerland because of their professional commitments, e.g. expats.

In previous posts, we presented a handful of basic information that may be useful for foreign investors planning to start their business in Poland. Undoubtedly, a crucial thing here is the the choice of the legal form of such business, as we discussed e.g.: here. The next big step on the way towards developing a business in Poland is to hire employees. This, in turn, involves an entire range of additional obligations for the employer, such as occupational health and safety, personal income tax and social insurance.

Research shows, however, that Poland is among the leaders in Central and Eastern Europe in terms of the number of foreign direct investments and investment attractiveness. According to the Doing Business 2018 report, prepared by the World Bank and being one of the most comprehensive analyses of conditions of doing business, Poland ranks 27th in the world in terms of business-friendly environment.

As promised earlier, I will try to present some practical solutions prepared by the German Desk Team of RSM Poland which make it easier for foreign investors, in particular entities from German-speaking countries, to start or expand their business in Poland in the context of complex and often changing legal and tax regulations.

As business cooperation between Poland and Germany grows, there are more and more domestic entities that make and further enhance their strong presence on the market west of the Oder River, as well as more and more German companies that decide to launch or intensify their business operations in Poland. What form do foreign investors choose for their business in Poland?

The efforts to make the collection of the value-added tax more effective are an evident tendency in all of the European Union, including Germany. The tax administrations perceive goods coming from outside Europe, mainly from Asian markets, to be a serious problem at present. These vendors often do not pay taxes, which significantly distorts the competition and, what is more, it depletes the budgets of EU countries.

What makes Poland such an attractive place for investment? Are German companies, from the perspective of time, satisfied with having invested their capital in Poland?