Introducing new regulations often means for entrepreneurs the necessity of remodeling their business – new rules or taxes can impact the profitability of a given business. The new government should, therefore, ensure that entrepreneurs are not too surprised and do not live in such great uncertainty when it comes to the stability and predictability of the tax system. At present, entrepreneurs face many tax regulations – withholding tax, reporting tax arrangements, foreign controlled units, limitations on including the cost of obtaining revenue from non-material services, or debt financing, loan financing. These regulations are, of course, needed and should be in our tax system – however, in the Polish version, they are much more restrictive and much more difficult to apply than what has been introduced in other European Union countries. In Poland, there are exceptionally restrictive regulations, and additionally, there are very many different interpretations of how to apply these rules. Therefore, an audit of the regulations that have been introduced and their simplification is recommended – so that there are no doubts about how to apply them. On the other hand, there is a wide range of tax incentives for research and development activity – but they give rise to so many interpretational doubts that companies are afraid to use them, for fear that some control will question these deductions. This is also the result of hastily enacting regulations without consulting entrepreneurs.
“First and foremost, the new government should introduce higher standards when it comes to tax legislation. And I mean social consultations of draft legal acts – i.e., those proposals for changes that are being introduced,” said Przemysław Pruszyński, tax department director of the Confederation of Leviathan, to the eNewsroom.pl service. “We cannot escape changes in tax law, as life changes, the economy changes – tax law must keep up with this economy. Therefore, even if the legislator is reluctant to propose new solutions – these new laws, new regulations will appear. From the point of view of the quality of life and the peace of companies’ operation, it is important that this legislative process is slow and transparent. This means consulting draft legal acts and informing entrepreneurs in advance about the planned changes – discussing with them whether these changes will not disturb the conditions of their operation. After conducting social consultations and adopting a given act – it is also necessary to ensure an appropriate period of vacatio legis. I mean at least 6 months for the entrepreneur to familiarize himself with these changes.
The second key issue is the restoration of a flat-rate health contribution. The current system, where the health contribution is calculated on income, is not only exceptionally socially unfair – it is also exceptionally costly and unnecessarily complicates the functioning of entrepreneurs. The third issue is the reform of the system of limiting tax obligations. Today we have a situation where due to many exceptions to the possibility of suspending the statute of limitations for tax liability – for example by filing criminal charges against entrepreneurs – the prescription period for tax liability in Poland never ends.
“Very often it happens that during the basic five-year period the tax authorities do not take any action, they come to the entrepreneur in the fifth year and say “now we will conduct a control for you” – but since we have only a few months to issue a decision defining the amount of tax liability, we will first file charges. Then the liability never expires – and then for another five years we will be issuing decisions and demanding our liabilities, which do not necessarily have to belong to the State budget. It is a pathological situation that the entrepreneur is never sure whether he is already free from any tax liabilities,” explains Pruszyński.
