What is the opinion of the Association of Entrepreneurs and Employers on the Polish Order in the context of the Communication from the European Commission on tax simplification?
The Association of Entrepreneurs and Employers welcomes the European Commission’s (EC) Communication „Business Taxation in the 21st Century”, which aims to reduce administrative burdens, simplify the tax system and create a more business-friendly environment, as well as make it easier for businesses to make up for their losses after the coronavirus pandemic crisis. It cannot be impossible not to notice, however, that the EC’s proposals on the tax system seem completely contrary to the intentions of the creators of the Polish Order, who intend to increase the tax burden. At the same time, it is worth while the fact that the EC is betting on simplifying the tax system, while the system of relief provided for in The Polish Ada will undoubtedly lead to a greater complexity of the Polish tax system.
On 18 May, the European Commission published a Communication on corporate taxation in the 21st century. It aims to promote a robust, effective and fair tax system for businesses in the European Union. The Communication sets out both a long-term and short-term vision for recovering from the coronavirus pandemic crisis and ensuring adequate budgetary revenues in the coming years. The greatest emphasis is on creating a fair and stable business environment that will stimulate sustainable and job-creating growth in the EU. As a result, the simplification of the tax system is intended to strengthen the EU’s economic position and achieve strategic autonomy.
Moving on to the details of the European Commission’s plan, the three main pillars of the plan can be mentioned. Firstly, by 2023, the EC will propose a new corporate tax framework in the EU that will reduce administrative burdens, remove tax obstacles and create a more business-friendly environment in the Single Market.
The 'Business in Europe: Income Tax Regulatory Framework’ (or BEFIT) project will create a single rule set on corporate tax in the EU. An important objective of BEFIT is to achieve a fairer distribution of taxation rights between Member States. More importantly, BEFIT will reduce administrative burdens, reduce compliance costs and, by simplifying the system, reduce tax avoidance opportunities and support employment and investment.
From the formal side, BEFIT will replace the proposal for a common consolidated corporate tax base (CCCTB), which will be withdrawn. BEFIT is also expected to lead to a broader discussion on the future of EU taxation, which will be a tax symposium in 2022.
Secondly, in its Communication, the EC outlined the tax agenda for the next two years. The EC distinguished two categories of measures. The first is aimed at increasing transparency by proposing that some large companies operating in the EU publish their effective tax rates. The second focuses on supporting economic recovery by eliminating the inequalities between debt and capital in the current corporate taxation system, where corporate debt financing is treated more favorably than equity financing.
The third pillar of the EC Communication is devoted to the launch of the coronavirus pandemic. Also on 18 May, the European Commission recommended loss settlement, in which it encourages Member States to allow companies to carry over losses to at least the previous tax year. In our opinion, such a recommendation is business-friendly and will facilitate economic recovery after the coronavirus pandemic. As the EC itself points out, this measure will have a positive impact in particular on the situation of small and medium-sized enterprises.
The approach presented by the EC can be described briefly as business-friendly. Such proposals, according to the ZPP, were lacking in The Polish Scoundu. The proposals in the section „Good climate for companies” are de facto recycling of previously known announcements and solutions that have been under way for some time. For entrepreneurs, Polish The Deal does not therefore offer any major novelties. At the same time, Polish Ład significantly increases the effective burden on the self-employed due Polish to the change in the health care accounting system and complicates the tax system by introducing numerous reductions aimed at reducing the negative impact of new solutions on individual social groups.
In view of the above, it should be concluded that the amendments proposed by the polish governance are contrary to the direction of simplifying the tax system and facilitating business conduct as set out by the European Commission in its Communication „Taxation of economic activities in the 21st century”.
Projekt otrzymał dofinansowanie z Norwegii poprzez Fundusze Norweskie 2014-2021, w ramach programu „Dialog społeczny – godna praca”.
