Poland: 9% up to €1.2M revenue, 5% for IP.

[blockchain4ever]

What do people think of the new regulations in Poland?

In EU, moving a company from a high-tax jurisdiction to Malta or Cyprus might raise red flags, while Poland should not raise any.

For the small business entrepreneur, this could potentially be ideal.

However, Poland might have its set of issues. What are they?

 

[Tourbillon]

Don't know much about Poland, but in Lithuania you can have reduced tax rate of 5% for your company if you have less than 300kEUR income over the taxable period and less than 10 employees.
I also heard that now they have made first year 0% tax and from second year you pay 5%, but I am not sure about this one.
Standard corp tax rate is 15% in Lithuania.

 

[blockchain4ever]

If I remember correctly, Lithuania has the severe restrictions that you cannot own any other company.

 

[Tourbillon]

blockchain4ever said:
If I remember correctly, Lithuania has the severe restrictions that you cannot own any other company.
Click to expand...

Yes, theoretically you can't have more than 50% shares in any other EU company, but I never heard of them checking it. If you work silently without making any problems and not rising too much attention to your company, I don't think that there would be a problem having company in any other EU country in the same time.

 

[JohnLocke]

blockchain4ever said:
In EU, moving a company from a high-tax jurisdiction to Malta or Cyprus might raise red flags, while Poland should not raise any.
Click to expand...

Sorry, not to be rude, but how stupid do you think that tax office in Europe are? It makes zero difference what you are do if the purpose of a transaction is against applicable tax laws or if they can find something to come after you.

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[blockchain4ever]

Tourbillon said:
Yes, theoretically you can't have more than 50% shares in any other EU company, but I never heard of them checking it. If you work silently without making any problems and not rising too much attention to your company, I don't think that there would be a problem having company in any other EU country in the same time.
Click to expand...

That's reasonable, but not optimal. I'm used to the tax office actually doing their job, and company registries will be public in EU soon which should make their job very easy. Maybe it's worth a shot though.

That said, what about Poland?

 

[blockchain4ever]

Admin said:
Sorry, not to be rude, but how stupid do you think that tax office in Europe are? It makes zero difference what you are do if the purpose of a transaction is against applicable tax laws or if they can find something to come after you.
Click to expand...

IF, and that's a big IF.

Tax offices work differently from country to country, but at least what I'm used to is that they do risk profiling. It's not as if they have enough people to manually go through the tax declarations of every citizen. They let computers do that, and computers use statistics or correlations.

Malta and Cyprus companies correlates with tax dodging. Polish companies correlate with carpenters or truckers.

 

[JohnLocke]

I agree it depends on the country. Where I live it is known what is going on in the low tax countries like Malta, Cyprus, Poland and the Baltic countries. It makes simply no difference. Poland is even known here for much other things and for that reason it's the same.

Maybe it is different in Germany and France (some of the major EU countries) but I doubt that the tax office in these countries sleep or live under a rock.

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[blockchain4ever]

I think Poland is in a different category though. It has 40 million people. Poland's GDP ranks 10th in EU, and is larger than Belgium, Austria, Norway, Ireland, Denmark, Finland, ...

And then you have Malta and Cyprus with the tiniest GDP of all. Poland has 40x the GDP or Malta and 25x that of Cyprus.

I think this is important, because it means there is massive regular trade with Poland, so bank transfers or ownership of companies shouldn't raise flags. About 50% of the tax-refugees I know of in Malta have serious issues with the tax authorities back home, while I have never heard of anything like that for immigrant workers from Poland (not that I know their personal finances that well though).

 

[Martin Everson]

blockchain4ever said:
In EU, moving a company from a high-tax jurisdiction to Malta or Cyprus might raise red flags, while Poland should not raise any.

For the small business entrepreneur, this could potentially be ideal.
Click to expand...

Might be interesting as you say for small EU companies but do your homework thoroughly. The EU has introduced EU exit taxation and some countries have already adopted it into law but all must do so soon. EU Exit taxation as part of ATAD means moving your company to another EU country will result in a tax, and in some cases you would be taxed as if the assets where sold at market value on the day of moving. Check this law in you country and the threshold before moving your business. I discussed this in another thread below.

https://www.offshorecorptalk.com/threads/uk-tax-minimising.24663/#post-85589
Tax harmonization will sooner or later come to EU and is already in the works. Personally I would not touch Poland with a barge pole. They introduced ATAD already meaning once you move your company their and potentially paid exit tax in other EU country you will have to pay exit tax gain in Poland to move it somewhere else 🙁.

Polish ATAD Exit Taxation new law:

https://www.lexology.com/library/detail.aspx?g=c0df8c43-48b0-44d7-9245-22ff8508ef69

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[GrumpyMess]

blockchain4ever said:
For the small business entrepreneur, this could potentially be ideal.
Click to expand...

You forget about divident tax, which is 19%. I don't see any advantages of Poland compared to other countries.

Martin Everson said:
Personally I would not touch Poland with a barge pole.
Click to expand...

Which country/ies would you choose in Europe then?

 

[blockchain4ever]

Martin Everson said:
Might be interesting as you say for small EU companies but do your homework thoroughly. The EU has introduced EU exit taxation and some countries have already adopted it into law but all must do so soon. EU Exit taxation as part of ATAD means moving your company to another EU country will result in a tax, and in some cases you would be taxed as if the assets where sold at market value on the day of moving. Check this law in you country and the threshold before moving your business. I discussed this in another thread below.

https://www.offshorecorptalk.com/threads/uk-tax-minimising.24663/#post-85589
Click to expand...

That could be an issue, but that only applies to unrealized gains, and that's not really a problem for me. I'm fine with winding down the operations when needed. Isn't an exit tax for corporations quite natural? What is taxed is the difference between the tax value and market value, which is what would happen if the company was dissolved or assets sold at market price anyways.

I have huge issues with the personal exit tax though.

 

[daxbr]

Providing you are not subject to social insurance, otherwise 31.64% more.

https://lang.zus.pl/en/https://www.zus.pl/pl/baza-wiedzy/s...i/wysokosc-skladek-na-ubezpieczenia-spoleczne

 

[TurnedToRobot]

@blockchain4ever thanks for the hint I found the official link here The Anti Tax Avoidance Directive - Taxation and Customs Union - European Commission which means it's over to just move around the EU.

I doner what this world will be in 10 years!

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[Martin Everson]

GrumpyMess said:
Which country/ies would you choose in Europe then?
Click to expand...

None in EU!!!! Get out while you still can damn_(.

Open a Georgia company perhaps. Georgia has a comprehensive free trade agreement with EU you know.

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[hungryit]

Martin Everson said:
None in EU!!!! Get out while you still can damn_(.

Open a Georgia company perhaps. Georgia has a comprehensive free trade agreement with EU you know.
Click to expand...

where would you bank @Martin Everson

 

[Martin Everson]

blockchain4ever said:
Isn't an exit tax for corporations quite natural?
Click to expand...

No its not it is a new phenomena in EU that has just come into law across EU from 1st Jan 2019 with transition up to 2020 I believe. it means companies like i.e Apple based in Ireland are shafted if tomorrow Ireland raises corporate taxes to 35%. If Apple decided to move to Cyprus for example they would pay potentially up to 33% exit tax in Ireland eek¤%&.

Don't fall for no Polish trap and enter the country with its enticing low tax rate its a trap....lol. Yes, you could wind the company down and start same business in another EU country but this could be considered exit tax avoidance if you have start new business with same customers, business model, management, products etc but just different name. I wouldn't want to argue that in court.

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[Martin Everson]

kanakke said:
I doner what this world will be in 10 years!
Click to expand...

I don't know what the world will look like but EU will be the biggest open air prison in the world. Expect harmonized taxes, EU ID card, personal exit taxes across entire EU and a social score system.

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[Martin Everson]

hungryit said:
where would you bank @Martin Everson
Click to expand...

I have 117 bank accounts and I bank everywhere and anywhere.

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[hungryit]

Martin Everson said:
I have 117 bank accounts and I bank everywhere and anywhere.
Click to expand...

That's a lot. I read it already in another post you made. But why that many accounts!! Have you travel to 117 different banks?