The Ministry of Digital Affairs is proposing that the digital tax apply to companies with consolidated revenues exceeding €750 million annually globally, but that it should be levied on revenues generated in Poland, the Ministry of Digital Affairs told PAP Biznes. According to PAP Biznes, the ministry favors the so-called broad variant with a tax rate of 3%, which would guarantee over PLN 3 billion in budget revenues in 2030.
According to an expert report commissioned by the Ministry of Digital Affairs (MC) from Instrat, the so-called broad digital tax model recommends a rate of 6%, but its development considered rates of 3% (which the ministry favors – PAP) and 4.5%. No threshold for gross revenue from digital services in Poland has been established, while the threshold for revenue from digital services globally has been set at €750 million.
As indicated in the expert opinion, with the 3% tax rate preferred by the ministry, the estimated tax revenues from the digital levy would amount to PLN 1.7 billion in 2027, slightly over PLN 2 billion in 2028, PLN 2.5 billion in 2029, and over PLN 3 billion in 2030.
In the case of a 4.5% rate, the digital tax could generate approximately PLN 2.6 billion in 2027 and PLN 4.6 billion in 2030. In turn, assuming a 6% rate, it could generate approximately PLN 3.4 billion in 2027 and PLN 6.15 billion in 2030.
It was indicated that in this variant the tax is to apply to targeted digital advertising services and the transmission of user data for marketing purposes as well as the provision of a digital interface (user networking portals, marketplace/e-commerce).
The exemptions are intended to cover digital intermediation services involving the provision of digital content, payment or communication services, regulated financial services and direct selling of goods and services.
In the narrow variant, the tax rate was assumed to be 7.5% (revenues of PLN 482 million in 2027, PLN 772 million in 2030), 5% (PLN 578 million in 2027, PLN 927 million in 2030), or 6% (PLN 722 million in 2027, approximately PLN 1.6 billion in 2030). The narrow variant would apply to targeted digital advertising.
The Ministry of Digital Affairs states that the proposed variants are designed to ensure the highest possible tax effectiveness, while maintaining maximum simplicity and transparent rules. The digital services tax (DST) model is modeled on regulations used in a number of other countries, including France, Spain, and the United Kingdom.
What does the Ministry of Finance want to spend the digital tax revenue on?
Furthermore, it was explained that the tax revenues would be used, on the one hand, to support the development of Polish technologies and innovation, and, on the other, to support the creation of quality media content . The ministry believes there is currently a need to support the media, as they have suffered the greatest losses from the takeover of the advertising market by big tech companies.
Companies subject to taxation will be required to report actual income related to services provided in Poland or relating to real estate or goods located in Poland.
When reporting, they will rely on data (e.g., IP address) they already have, based on which they will conduct a “reasonable assumption” test – a user will be considered a resident of a given country if the information collected by the platform indicates a likelihood that their normal place of residence is in that country. This means payers will not need to collect additional customer information.
In a situation where it is not possible to determine the location of users, the tax base will be determined in proportion to the number of users of a given interface in Poland or ad displays in the country.
The Ministry points out that this solution prevents the need to collect more data than is already collected as part of business activities and significantly reduces the administrative burden on companies and reporting costs.
Time for the draft bill after consultations
The next stage of work on introducing a digital tax in Poland will be the preparation of a draft bill taking into account the submitted opinions and assessments, which will then be subject to extensive consultations.
On Wednesday, the Ministry of Digital Affairs held a meeting with a broad representation of industry and non-governmental organizations to discuss the digital activity tax model, which has been under development for the past few months. Deputy Prime Minister and Minister of Digital Affairs Krzysztof Gawkowski first reported on the work to develop a digital tax model within the Ministry of Digital Affairs in an interview with PAP Biznes in March.
It was indicated that the votes and opinions of the meeting participants would be taken into account in the development of a proposal, which would be translated into a draft law and would be subject to further consultations.
Who will be covered by the digital tax and who will not?
Below is a list of services that are to be taxed:
- Digital interface services refer to the provision of multi-sided digital software (e.g., platforms, applications) that enable interaction between users. Such services include platforms that enable the exchange of information, goods, or services between different parties. Examples include marketplaces, resource-sharing applications (e.g., taxi apps), and other platforms that facilitate transactions or communication between users (social media);
- Targeted digital advertising services (profiling) – services that place specific advertisements targeted to specific users via a digital interface. This service is based on building a user profile based on information obtained about them and tailoring advertisements to their individual preferences and behaviors. Examples include advertisements displayed on social media platforms or in search engines (search engine marketing, SEM);
- Data transfer services – services based on the sale or licensing of data collected about users and their activities on platforms. These services include the transfer of information about users' interests, shopping habits, location, and other data derived from how a person interacts with digital interfaces. This data is used, for example, for the aforementioned marketing purposes or to improve the effectiveness of the services provided.
In addition, the ministry plans to introduce a number of exemptions, including:
- digital intermediation services where the main purpose is to provide users with digital content (e.g. computer programs, games, applications) or to provide them with communication or payment services (i.e. digital interfaces where users do not play a key role in creating value for the entity providing the interface);
- regulated financial services provided by regulated financial entities (e.g. banking applications);
- the sale of goods or services online through the website of their supplier, where the supplier does not act as an intermediary (e.g. e-commerce related to retail activities).
Maciej Białobrzeski (PAP Biznes)
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