Europe’s Biggest Car Battery Plant Will Be In Poland

Polish Govt and Korean company LG Chem announced in a press conference this week the corporation’s plans to open a plant of battery plant to produce batteries for electric vehicles in Poland. The factory is to be the biggest such facility in Europe and offer batteries to top European carmakers. It is going to be located in a special economic zone Kostrzenice near Wrocław, a city in the west of Poland.

The new factory is to produce 100,000 batteries from this car battery plant in a year and employ 2,500 people. LG Chem is going to forge cooperation with Wrocław University of Technology in order to tap into the local engineering talent. The facility is planned to open in 2018. It will be managed by LG Chem’s subsidiary in Poland, LG Chem Wrocław Energy. Soon, one out of nine car batteries from a new battery plant in Europe may come from a Polish manufacturing facility.

The Korean investor had to apply for consent from the authorities to start operations in the special economic zone. It was issued to the company on Thursday. Minister Mateusz Morawiecki stressed the investment is in line with the government’s electromobility strategy and was delighted the chemical company chose Poland as the base for this huge project. This is one of the biggest industry investments in the country in recent years.

This car battery plant deal is revealed after demand for lithium-ion batteries for vehicles is expected to grow in the upcoming years. European Union is urging member states to implement more and more restricting policies with regard to greenhouse gases and air pollution. Some European cities are considering banning fuel vehicles from centers and simultaneously coming up with incentives for owners of “green” cars such as free parking or tax credits.

The number of sold electric cars in the European continent grows every year. Still, today only a little over 1% of all vehicles on European roads are electric. 90% of all EVs sold in Europe are in one of the following 6 countries: Germany, France, the UK, the Netherlands, Sweden, and Norway.

What This Means for Businesses in Poland

Tax policy changes in Poland have direct implications for both domestic and foreign-owned businesses. Companies operating in Poland must stay informed about regulatory developments to optimize their tax position and maintain compliance. The Polish tax system includes CIT (19% standard, 9% for small taxpayers), VAT (23% standard rate with reduced rates of 8% and 5%), and various sector-specific levies.

For international entrepreneurs and investors, understanding the Polish tax landscape is essential for business planning. Poland offers several attractive incentives including the Polish Investment Zone (up to 15 years of CIT exemption), R&D tax relief (up to 200% deduction), and the IP Box regime (5% effective CIT rate on qualified intellectual property income). Professional tax advisory can help identify the most beneficial structure for your specific situation.

The interplay between Polish domestic tax law and international tax treaties is particularly important for foreign-owned entities. Transfer pricing regulations, withholding tax provisions, and anti-avoidance rules (GAAR) require careful navigation to ensure both compliance and optimization.

If you are doing business in Poland or considering entering the Polish market, Zalewski Consulting can help. Learn more about our tax advisory services in Poland, or contact us for a free consultation.