A digital tax is difficult to justify economically; it will negatively impact Poland's investment attractiveness, representatives of the Digital Poland Association said in a comment sent to the Polish Press Agency (PAP). They emphasized that digital tax is perceived globally as a bad practice.
During Wednesday's meeting with industry and non-governmental organizations, the Ministry of Digital Affairs presented a proposal for a digital tax in Poland, which would be paid by companies with global revenues exceeding EUR 750 million.
The Digital Poland Association, which brings together the largest companies in the digital sector, assessed in a commentary for the Polish Press Agency (PAP) that a digital tax is difficult to justify economically. “The impact of introducing such a burden should be assessed not only through the prism of the short-term fiscal effect – which does not seem to be spectacular – but also from the perspective of the long-term impact on the entire economy, with particular attention paid to SMEs and consumers,” the organization's representatives said in a commentary.
According to them , in the broader perspective, the digital tax will negatively impact our country's investment attractiveness. They added that Poland is currently a recipient of investment, and the health of our economy and its innovation potential depend largely on technological investments located in Poland. Therefore, “ensuring the conditions for such investments are in our common best interest and should be at the center of your attention.”
According to the organization, it's difficult to find a fiscal justification for introducing the tax. “The funds the state would gain from it will be used much more effectively by companies, investing them in the Polish innovation ecosystem. Contrary to appearances, special tax requirements targeted at a narrow group of businesses, for example, due to their business profile, negatively impact the entire tax system and set a dangerous precedent for the future. The very serious consequences of implementing a digital tax are disproportionate to the potential impact on the state budget,” the statement read.
“As an excise tax intended to increase the cost of a given good or service, such as digital advertising, it will most likely be passed on to other businesses in the form of higher prices, as an additional item on the service provider's invoice, or will be a burden on consumers. This is consistent with the experience of other countries. (…) In the current economic climate, such price increases could further increase inflation and raise concerns about the cost of living among citizens,” the Association's representatives assessed.
They added that, in their opinion, the discussion about the digital tax is based on “an unfair fixation on a narrow group of companies from one industry, which are accused of underrepresenting taxes, even though they pay taxes at the same level as large companies from completely different sectors.” They believe that the notion that technology companies pay less in taxes than other industries does not reflect reality and should not be used as a basis for discussion: “Because of the above arguments, among other things, the digital tax is perceived globally as a bad practice.”
They pointed out that global tax rules are designed to prevent double taxation, while the digital tax is designed to operate outside these rules, deliberately taxing revenues already taxed by other countries. They pointed out that companies affected by this fiscal burden have no recourse in cases of overlapping taxation layers.
According to the Association, as a result, countries such as Canada, Germany, and India have abandoned the idea of introducing a tax, and European governments have presented a digital tax solely as a temporary measure. A digital tax was also not included in the European Commission's list of proposed taxes for the next 7-year financial framework of the European Union, the report noted.
The Ministry of Digital Affairs announced that at Wednesday's meeting, representatives of the Instrat Foundation presented a report containing an overview of solutions already in place around the world and recommendations for introducing this type of tax in Poland based on 3%, 4.5%, and 6%. PAP Biznes reports that the ministry favors the so-called broad variant presented in the report, with a tax rate of 3%, which would guarantee PLN 1.7 billion in budget revenues in 2027, over PLN 2 billion in 2028, PLN 2.5 billion in 2029, and over PLN 3 billion in 2030.
According to the so-called broad variant, the following would be subject to taxation: digital interface services, e.g., marketplaces, taxi apps, social media; targeted digital advertising, i.e., specific ads targeted to specific users based on a previously created user profile; and user data transfer services.
The Digital Poland Association is an industry-wide employer organization representing the largest companies in the digital and new technology sectors – manufacturers, distributors, and importers operating in the Polish market. Members of the association include: Amazon Development Center Poland Sp. z o.o., Amazon Web Services EMEA SARL Sp. z o.o. Branch in Poland, Asseco Poland SA, Cisco Systems Poland Sp. z o.o., and Google Commerce Ltd. (PAP).
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