Poland is in favor of a global minimum corporate-tax rate as long as it doesn’t impede its ability to lure foreign investors by offering tax relief, Finance Minister Tadeusz Koscinski said.
Along with Ireland and Hungary, Poland has been seen as a potential European holdout in the minimum tax plan backed by the G-7 group of the world’s richest countries. Koscinski said Warsaw would support a deal once there’s clarity on carve-outs, or exceptions to where the new regime must be applied.
With per-capita economic output at about three-quarters of the European Union average, Poland’s government has prioritized catching up with its western peers in the next decade. It plans to do so in part by continuing to offer special terms, including tax breaks, for companies relocating to the east European nation.
“We’re in favor of a minimum tax rate to stop companies from taking money out of one economy and putting it into another, but we also want to have the possibility of encouraging companies to do business in Poland,” Koscinski said in an interview. “These two things should be looked at together.”
Poland doesn’t want to be in a situation where the tax relief it offers to incoming companies would end up boosting foreign governments, which would be able to extract additional charges from firms that pay lower levies abroad.
Asked what carve outs would satisfy Poland, he said: “Anything that’s making money on the Polish economy” should be taxed according to the domestic corporate rate, which stands at 19% before potential relief. Companies shouldn’t be allowed to withdraw money from one economy to pay a lower tax in another, he said.
Once countries working with the Paris-based OECD club of developed nations agree on the exceptions — which Koscinski said is “closer rather than further” away — the deal could go ahead without much of a struggle over the minimum tax rate, which the G-7 tentatively predicted at “at least” 15%.
“All I’m really interested in is that a company pays the Polish tax for everything it does in Poland,” he said. “Anything it does from Poland to the outside world, the minimum rate should apply, and whether it’s 15%, 10% or 20%, that’s absolutely secondary.”