On 15th November 2021, the President of Poland signed an amendment act, referred to as the Polish Deal (Polski Ład), introducing broad changes to tax legal acts. One of the accepted proposals of the Ministry of Finance is the introduction of the so-called Investment Agreement (Porozumienie Inwestycyjne), an agreement concluded between an investor and a tax authority which concerns the tax consequences of a planned investment in Poland.
The Investment Agreement is a new solution that has not been present in the Polish tax system. At the early legislation stage, it was called "Ruling 590" (Interpretacja 590). The validated measure is supposed to enable investors to determine the tax effects of a planned investment in a comprehensive manner before start of the investment. The conclusion of an Investment Agreement is to protect the investor from the negative tax consequences more than individual tax rulings do. At the same time, it gives the investor an opportunity and an incentive to join the Cooperation Agreement (Program Współdziałania) after the investment is made.
Who will benefit from the changes
An Investment Agreement is to take the form of an agreement concluded between the Ministry of Finance and an investor, i.e. an entity that plans or has started an investment on the territory of Poland with a value of at least PLN 100 million (PLN 50 million from 2025). Investment Agreement is addressed primarily to foreign entities planning to start a new business in Poland. Nevertheless Polish residents are not excluded from benefiting from these regulations.
An application to conclude an Investment Agreement will also be able to be submitted by a group of investors, in particular a consortium, company, branch or representative office established in connection with the investment.
Procedure for the conclusion of an Investment Agreement
The investment agreement is to be concluded upon the investor's application, which is to include the following information:
- data identifying the investor;
- description of the planned or commenced investment;
- the declared value of the investment and an explanation of how it was determined
- proposed duration of an agreement;
- the proposed subject of an agreement.
However, the subject of the application may vary depending on the scope of the investment.
The proposed regulations indicate two types of fees that investors will have to pay in order to enter into an agreement: an initial fee and a main fee.
The initial fee, which is the payment for the application, is to amount to PLN 50,000 (from each investor filing in the application) and should be paid to the account of the authority within 30 days from the date of filing the application.
On the other hand, the conclusion of an Investment Agreement is to be subject to a main fee of not less than PLN 100,000 and not more than PLN 500,000. The amount of the fee will depend on, among other things, the declared value of the investment and its complexity. The fee will be paid within 30 days from the day of concluding the agreement.
Due to the fact that the institution is primarily addressed to foreign investors, the regulations indicate that the agreement may also be drawn up in English. The regulations also provide for the possibility to organise a consultation meeting with the investor.
Similarly as in the case of the cooperation agreement, the competent authority for the agreement will keep a register of entities covered by the new measure. The register will be public and available on the website of the Ministry of Finance.
Benefits from concluding the Investment Agreement
The validated institution of the Investment Agreement is to simplify the situation of the investor and increase certainty about the tax implications of planned investments. According to the proposed amendments, Investment Agreement is to be equivalent to the following administrative acts:
- Advance pricing agreement (unilateral only);
- GAAR ruling;
- Binding Excise Information;
- Binding Rate Information;
- Individual tax ruling.
The agreement may cover all or some of the above acts. It will be valid for 5 years from the date of issue. It will be possible to renegotiate its contents resulting in changes to the agreement, including extending its duration.
The planned effective date of the legislation is 1st January 2022.
Autorzy:
