The Impact of Poland’s Penal Policy on Business Development

Poland’s business development is under increasing pressure due to the country’s penal policy, which experts call “too repressive.” New billing offenses have been added to the Penal Code, and tax authorities have been given tools to surveil taxpayers’ bank accounts without their knowledge, both of which are seen as harmful to the development of Polish companies.

The experts point out that the number of convictions in connection with fiscal crimes has been increasing over the years, which they see as evidence of the growing repression by tax authorities. The study reveals that in 2019, only 577 people out of 10,000 entrepreneurs against whom proceedings were pending in courts were acquitted. The level of repression is making it very difficult to do business development in Poland.

Importance of Business Development:

The penalties imposed in tax crime cases are also increasing, and experts have a particularly negative view of the practice of using pre-trial detention in a situation where the only reason to do so is the threat of a severe penalty to the suspect or accused.

The closure of enterprises is one of the effects of the repressive penal policy of the state apparatus, which is worrying for experts from the Ożóg Tomczykowski Law Firm and the Business Center Club. In 2022, a record number of 212,000 companies disappeared from the market, and as many as 22,900 companies were deleted from the National Court Register.

The number of legal regulations successively introduced since 2015, which were supposed to tighten the tax system, has led to an increase in repressiveness for certain categories of acts. The statistics collected from criminal courts and the statements of business development harmed by the state apparatus confirm that judgments in tax cases are becoming more severe. Arrests are being used too hastily. Since the introduction of a special type of invoice crimes, the number of those convicted under these provisions has also been increasing in individual courts.

The weakening of legal certainty and predictability will hurt the number of foreign investments in the country. Urgent changes are needed to facilitate running a business, not to introduce further severe penalties for errors related to this activity.

The authors of the analysis suggest that the Polish government needs to reconsider its current penal policy and make changes that will support the growth of Polish businesses.

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.