Poland Proposes Digital Tax Targeting Big Tech Firms

Poland's government has introduced a bill to implement a digital services tax aimed at large technology companies. Announced by Digital Affairs Minister Krzysztof Gawkowski, the proposed tax would impose a 3% levy on revenue generated from specific digital services, including online advertising and the sale of user data. This tax would apply to firms with global revenues exceeding €1 billion and local revenues over 25 million zloty, primarily affecting major US and Chinese tech giants. Exemptions are included for companies that primarily publish original content and for financial services.

Digital tax in the polish government’s work list. Who will the new tax cover?

The digital tax proposal is positioned within a broader legislative agenda but faces significant hurdles. While Gawkowski, a member of The Left (Lewica), advocates for the tax as a means to create a "level playing field," the ruling coalition's support is mixed. The centrist Poland 2050 party has expressed backing, with its leader, Katarzyna Pelczynska-Nalecz, calling it a "very good solution." However, the dominant Civic Coalition (KO), led by Prime Minister Donald Tusk, has shown skepticism. Finance Minister Andrzej Domanski previously indicated a "very, very low chance" of the tax being enacted, citing potential presidential veto concerns.

Notes from Poland

President Karol Nawrocki, an ally of former President Donald Trump, has pledged to oppose new taxes, raising the likelihood of a veto if the bill passes through parliament. The US administration has voiced strong opposition to such taxes, with incoming US Ambassador Tom Rose labeling the proposal as "not very smart" and warning of potential retaliatory measures from the Trump administration. Mixed reactions have also emerged from Poland's main opposition party, Law and Justice (PiS), with some members supporting the tax while others caution against its implications for transatlantic relations.

Notes from Poland

The proposed digital tax is anticipated to generate substantial revenue for Poland, potentially exceeding PLN 3 billion annually by 2030. Gawkowski has stated that the additional funds would be invested in areas such as artificial intelligence and cybersecurity. However, concerns have been raised regarding the potential for increased costs to local businesses, as affected platforms might raise prices to offset the tax burden. The Polish government aims to position itself alongside countries like France and Italy, responding to stalled global tax negotiations at the OECD level.

Digital tax in the polish government’s work list. Who will the new tax cover?Notes from Poland

While the Polish government has outlined its intentions for the digital tax, the actual implementation remains uncertain. The mixed signals from coalition partners and the potential for presidential veto create a complex landscape for the bill's future. Additionally, the international response, particularly from the US, could significantly influence Poland's approach to the proposed tax.

Digital tax in the polish government’s work list. Who will the new tax cover?

• “Global corporations often pay less in taxes than local companies; it’s time to end this,” — Krzysztof Gawkowski, Digital Affairs Minister

Notes from Poland

• “All companies in Poland should pay fair taxes, and we know that these tech giants simply don’t pay these taxes in Poland,” — Janusz Cieszynski, Former Digital Affairs Minister

Notes from Poland

• “President Trump will retaliate” — Tom Rose, Incoming US Ambassador to Poland

Notes from Poland