How to set up your business in Poland

How to set up
your business
in Poland
„Anyone can run a small business
and anyone can run a large business.
The hard bit is getting from small
to large.”
Contents
1. The business plan and development strategies
05 Business plan
08 Development strategies
2. Structure – how to set up your business properly
11 Establishing companies, branch offices, agencies
11 The procedure of establishment of a company
15 Additional costs
16 Selected forms of companies
17 Limited partnership
18 Accountancy Bureau
19Bookkeeping
20Taxes
3. Cash – your business base
25 Acquiring capital
26 Banking relationships
27 NewConnect IPOs
28 Bond issue on WSE Catalyst
4. Responsibilities – how to avoid getting lost
31 Ongoing tax advice
32 Tax optimisation
33 Optimisation of structures and transactions
34 Tax Compliance
35 Transfer pricing
2
Introduction
The journey of a thousand
miles begins with a single
step.
Confucius
Running a business is a journey. Certainly the
most difficult moment of this journey comes
with making the decision to start up and taking
the first step in escalating the idea to reality.
One of the first questions and doubts that come
up at this initial stage is “Where should I start
my business adventure in order to grow it in
the most comfortable, stable and predictable
conditions, surrounded by conducive macro
economical indexes and supported by competent,
hardworking and kind people.” Poland is
definitely such a place.
Stating a business in Poland opens up for
entrepreneurs one of the largest European
markets, where over 38 million potential
clients live. Furthermore, Poland’s convenient
location in the heart of Europe, with its welldeveloped transport connections, facilitates the
establishment of business contacts with partners
from all countries in Western and Eastern
Europe. Poland is in a good economic situation
and its huge progress in the years 1995-2011
is best illustrated by average GDP increase
of 4,8% per year. The stable macroeconomic
environment, strong economic foundation,
large domestic demand and growth in foreign
trade helped Poland not only to avoid a recession
in 2009 but also to register the highest growth
during the crisis among all EU countries. Foreign
investors who plan to start up in Europe often
choose Poland as a location for new investments.
This information was confirmed in a survey by
Bloomberg 2013 where Poland was considered
to be the best country for doing business
in Central Europe.
In this guide we will provide you with
detailed information on particular issues essential
to starting and running a business in Poland.
In this guide designed for start-ups and
early stage companies, we focus on the four
cornerstones of a successful start-up:
1. The business plan and development strategies
2. Structure – how to set up your business properly
3. Cash – your business base
4. Responsibilities – how to avoid getting lost
Anna Pisarek
Director – establishment of business
3
Business plan
1. The business plan
and development strategies
A reliable business plan as a tool to make
a decision.
• A business plan is an explanation for decision-
makers on how the business idea fits into the economic realities and how the owners want to bring it into life.
• A reliable business plan is a tool to support accurate business decisions which facilitates the understanding of conditions, both internal and those related to the environment around the company. As a decision support tool, a business plan, in addition to the descriptive element, should also contain the financial assumptions in an Excel file, which allows them to verify and analyze the impact
of changes in the key assumptions on the expected results and the need for cash.
Why prepare a business plan?
The best business plan answers the following
questions:
• What do you want to achieve? What is your unique selling point? Why would customers buy from you?
• How do you intend to achieve your goals? What are the key milestones? What are the critical success factors/barriers to achieving
your goal? What are you going to do about them?
• What funding is required to achieve your goal?
Which milestones will the first fundraising achieve?
If you fail to plan, you plan to fail.
The main elements of a business plan are:
• Executive summary – an overall view of your business and its potential.
• Background and description of the business
– the rationale behind the business.
• Management and organizational structure – how your company will be organized
and managed.
• Market research and the marketing plan
– a comprehensive analysis of market potential and dynamics.
• Pricing strategy – the price point chosen will affect the image of the product or service you are offering, what gross profit per product,
and in total, is expected.
• Channels of distribution – the geographic area
– whether it is better to sell directly, through retail outlets or wholesalers.
• Product/service promotion – advertising, personal selling and sales promotion.
• Sales management – outline details of the sales
team and track record; what selling methods will be employed; what are the sales volume
and activity targets; how long is the sales
process; what procedures are in place for handling customer complaints?
• Sales forecasts – a sales forecast, on which monthly cashflows and budgets can be based, should be prepared.
• The operation plan – this section should describe the type and function of the
equipment you are buying so that the reader will have a clear image of your operational environment.
• Forecast profit and loss account and
cashflow – projected results for the business
demonstrating initial capital required,
break-even point, potential return on investment and over what period.
SWOT analysis
– critiques the business’
Strengths, Weaknesses,
Opportunities and
Threats using a balanced
score card approach.
Assessment
of business profitability
– ratio analysis, which
shows the effectiveness
of the market.
Porter’s Five Forces
– views the business
from the position
of suppliers, buyers,
competitors, threat
of substitute goods
and threat of new
entrants and is
a particularly good
way of portraying
the business visually.
At Grant Thornton, we understand that
a business plan is an integral element of
communication with investors and financial
institutions in the process of seeking funding
5
1. The business plan and development strategies
analysis of
resources
market
offer
environment
analysis
organization and
its suppliers
marketing
strategies
customers
and competitors
costs
forecast
analysis
and financial
planning
sales
forecast
the efficiency
of the company
for the implementation of business ideas
and therefore needs to provide its readers
with reliable information on the proposed
project. Review by an objective adviser on
the surroundings conditions, the organization
of the business and the current state of its
finance can assess the reliability of forecasts
and diagnose the key risks to the success of
the business. As a result, the beneficiaries
are both the co-financing institution and the
company itself.
We value close cooperation with you, the
client. We believe that the combination of client
knowledge of the business with our experience
and independent approach allows us to create
the best solutions. That’s why we offer services
related to the business plan, which aims to
determine the profitability of the business
investment.
The assessment is based on a business plan,
with the financial section presented using
6
the discounted cash flow model. It may be
expanded to include additional market analyses,
a market strategy framework, extended SWOT
analysis and elementary assessment of business
profitability.
Project scope is tailored to the client’s
individual needs. It most often comprises
the following elements:
• Evaluation of the company’s current situation (finance, product, market)
• Description of the investment project
• Collecting all the data necessary to develop the cash flow model, and all other information important to the project (market environment – legal limitations, competitors, potential customers)
• Building the business plan including the financial model
• Project viability assessment
• Sensitivity analysis
• Formulating recommendations
The work is realized in several stages:
• Overview of principles and concepts of
the business and the scope of information available to the company.
• Environment analysis (customers and competitors) and the description of resources (organization and its suppliers).
• Construction of profit – cost assumptions, capital expenditure and working capital
elements that determine the demand for financing.
• The development of business plan documentation and discussing conclusions.
As a result, the client receives a report in
the form of a business plan, containing financial
simulations, as well as assumptions, sensitivity
analysis and investment project assessment.
7
1. The business plan and development strategies
Development strategies
Grant Thornton offers a development strategy
service that involves supporting groups of
companies by identifying areas with potential
for boosting the bottom line. Grant Thornton
advisers take into account various ways
of realising synergies, particularly through
centralisation and outsourcing of some
functions. We recommend best practices
in business operations.
By combining knowledge on the functioning
of processes inside businesses with long-term
experience in defining business strategies and
professional analytical skills, we can develop
several variants of optimisation activities and
assess their economic viability. As a result of
our work, the company’s management can
make decisions which will have a positive
impact on business value. Depending on the
size and nature of the group of companies,
the scope of works differs.
Companies heading
into the future should
know their goals and
priorities, the chances
of success and the
obstacles to their
achievement.
It most often comprises the following stages:
• Getting to know the basics of the group’s operations
• Determining the scope of the project
• Collecting analytical data, e.g. through visiting businesses comprising the group
• Data analysis
• Developing and pricing potential scenarios
• Verifying the preliminary findings in a series of meetings with management staff
• Formulating conclusions and recommendations
Moreover, we can actively participate
in restructuring chosen processes or assist
by providing ongoing monitoring of the
implementation of recommended changes.
8
9
Establishing companies,
branch offices, agencies
2. Structure
– how to set up your
business properly
The gap between
success and failure
is quite small – small
things matter
A good start
is half the work!
In the business start-up environment,
it is easier and relatively inexpensive to get
the corporate and tax structure right at the start.
The alternative is to reverse out of an existing
structure at a later date which causes expense,
disruption to the business and is generally
a wasteful use of an enterprise’s resources
and time when both of these are in short
supply. We recommend focusing on the things
and structure that matter right at the start,
e.g. the possible exits, expansion opportunities
and tax optimization strategy in order to avoid
expense at a later date.
The goal of the service is to provide
comprehensive support in the process of
establishing companies, as well as branch
offices and agencies of international entities.
Tasks covered by the service include many
variants of the clients’ circumstances in the
context of international tax law.
The extensive experience and knowledge
of Grant Thornton advisers guarantee efficient
registration of an entity meeting the client’s
real needs.
11
Stages of registering the LTD in NCR:
2. Structure – how to set up your business properly
The procedure of establishment of a company
No.
signing
the lease
contract
establishment
of a bank
account
application to National
Court Registrer
– one-stop shops –
2
Statement by all board members that
contributions to the share capital were
fully paid by all the partners
Signed by all members of LTD management
board
1
3
List of partners
Signed by all members of LTD management
board
1
4
Signature pattern of each member of
the board
Form of a notarial deed
1 from
each member
5
The statement of no criminal record
and not performing a public function
from board members
Individual signature by LTD board member
1 from
each member
6
The statement of the names and
addresses of the members of the Board
Signed by all members of LTD management
board or proxy
1
7
A statement that not every/one member
has a Social Security Number
If the LTD is a sole shareholder company;
Signed by all members of LTD management
board or proxy
1
8
Statement of the address (and registered
office) of only member of LTD
If the LTD is a sole shareholder company;
Signed by all members of LTD management
board or proxy
1
9
Statement of the LTD address
and registered office
Signed by all members of LTD management
board or proxy
1
10
ID card/passport certified by a notary
with an apostille and translated into
Polish by a certified translator
If member is a foreign person
1 from
each member
11
The statement of no criminal record
If member is a foreign person obtaining the
certificate, bearing the apostille clause and
translated by a certified translator will speed
up registration in the NCR
1 from
each member
12
The power of attorney with proof
of payment PLN 17
If the application is rendered by proxy;
stamp duty paid according to the seat of
the submission
1 for each place
of submission (min.
4)
13
Application forms for NCR
Signed by the members of the Board in
accordance with the principle of representation
or proxy
1 for each form
Registrer, Central Statistical
Office, Tax Office, Social
Insurance Office
Version 2
the articles
of association
a notarial deed
signing
the lease
contract
establishment
of a bank
account
application
to the Central
Statistical
Office
application
to the Tax
Office
application
to National
Court
assigning Tax
register
assigning REGON
Identification
number
number
registration
form to
Social
Insurance
Office
registering
for the VAT
Stages of establishing a limited liability company:
No.
Specification
Comments
Number of copies
1
The Articles of association – a notarial
deed signed by all company partners
Sole shareholder company cannot be
set up by another sole shareholder company
3
2
The power of attorney from
the shareholders in the form
of a notarial deed
If the articles of association are signed by
proxy stated by partners
2 (number of copies from
each of the partners)
3
Transcript from the trade register
attributed to a partner, translated into
Polish by a certified translator and
bearing the apostille clause
If the partner is foreign legal person
3
4
Current copy from NCR (National
Court Register)
If the partner isa legal person from Poland
Notary will download
printout from NCR service
5
Appointment of the Board of Ltd.
Management may be indicated in the text of
the articles of association or in the notarial
deed agreement covering the articles of
association, but separate from the articles.
6
Resolution of the management
board / meeting of shareholders
consenting to participate in Ltd.
The parent company articles of association
may oblige the company to obtain the
consent from an appropriate company unit
that is supposed to be a partner.
12
Number of copies
Proof of payment to NCR – (PLN 500 for
Registration of the Company in the NCR
and 100 PLN for publication in MSIG)
registering
for the VAT
application to National Court
Comments
1
Version 1
the articles
of association
– a notarial deed
Specification
1
13
2. Structure – how to set up your business properly
Additionally, according to the principle of one-stop shops:
The scope of the Grant Thornton works consists of:
No.
Specification
Comments
Number of copies
1
Identification form NIP-2 with attachments
1
2
Document of authorization for the use of
office premises – for example, the lease
Transmitted to and for the
purposes of the Tax Office
1
3
Agreement to a bank account / bank
declaration / Extract accounts
Transmitted to and for the
purposes of the Tax Office
1
4
Application form RG-1 with attachment
RG-RD
1
5
Application form to Social Insurance Office
(ZUS-ZPA)
1
Steps after registration:
No.
14
Specification
Comments
Number of copies
1
Form KRS-Z3 with KRS-ZY
Updating the company data in NCR:
NIP and REGON
1
2
Update form – NIP-2
Updating the company data in NIP
for REGON; not covered by the rule
1
3
Update form – RG-1
Updating the company data in CSO
for NIP; not covered by the rule of
one-stop shops; as a rule, there is
no need to submit, as the CSO by law
should receive info from the Tax Office
1
4
Identification application VAT-R
with stamp duty PLN 170
Not covered by the rule of one-stop
shops
1
5
Share Register
Registration of shareholders
to Share register
1. Identifying all the actions necessary
to be taken during the process of establishing
a company in Poland
2. Preparation of a detailed schedule of establishing the company
3. Preparation of a list of documents and information to be received by Grant Thornton from the Principal
4. Preparation of a draft of the Articles of Association of the company and consulting
it with the Principle
5. Preparation of necessary powers of attorney for the Grant Thornton staff members
6. Conclusion of the Articles of Association of the company in the form of notary deed
7. Preparation of documentation necessary to register the company in the National Court Register (resulting in assignment of the KRS number)
8. Preparation of an application to register
the company for statistical purposes in the Statistical Office (resulting in assignment
of the REGON number)
9. Preparation of an application to register
the company for a tax identification number
in the Tax Office (resulting in assignment
of Tax Identification Number)
10.Preparation of an application to register
the Company for employment purposes
in the Social Insurance Office
11.Submission of aforesaid documents and monitoring of the process of registration
of the company in aforesaid institutions
12.Registering the NIP (Tax Identification Number) and REGON (statistical number)
in the National Court Register
13.Registering the company for the VAT
14.Consulting all legal and tax issues connected with the project
Additional costs
The additional costs of establishing a limited
liability company in Poland are, in particular:
• Registration of the company in the National Court Register – PLN 500
• Obligatory publication in Monitor Sądowy
i Gospodarczy (Court and Business Gazette)
– PLN 100
• Registration for VAT – PLN 170
• Necessary Certified translations – approx. PLN 80 – 100 per page
• Stamp duties on power of attorney – PLN 17 per submitted copy of power of attorney
15
2. Structure – how to set up your business properly
Selected forms of companies
Selected Forms
of Companies
16
Registered partnership
Spółka komandytowa
Limited liability
company Limited
partnership
Limited liability
company
minimum capital
–
–
PLN 5 000
minimum number
of shareholders
2
2
1 (sole shareholder
company)
taxation of company
profits
–
–
19%
taxation
of associates profits
according to the 19%
flat rate or by
a progressive 18%
and 32%
according to the 19%
flat rate or by
a progressive 18%
and 32%
dividend taxed
by 19% flat rate
responsibility
of shareholders
solidarity and
subsidiary of the
company, the full
responsibility
of all partners
the general partner
is responsible
in solidarity and
subsidiary with
company and without
restriction;
limited partner is
responsible to the
amount of partnership
company
representation
each shareholder has
the right to represent
the company unless
otherwise indicated
in the contract
general partner
represents the
company
it is not a separate
legal form, and
its specificity is
described in the
following section
lack of responsibility
of partners, however
liability may extend
to the members
of the Board
members of the
Board in accordance
with the principle of
representation as is
set out in the articles
of association
Limited partnership
A limited partnership enables you to combine the
benefits of securing the partners’ personal assets
(to a similar extent as in the case of a limited liability
company) with cost-effective taxation (flat-rate tax
of 19%), which makes it an optimal form of business
activity for small and medium-sized enterprises.
The appeal of limited partnerships is reflected
in the growing number of entities operating
within such a framework. Limited partnerships are
established for new business undertakings. In the
case of entities already in operation, it is possible
to change their legal form to a limited partnership.
Grant Thornton advisers provide comprehensive
support in the process of designing an appropriate
structure based on the limited partnership model,
as well as in the process of changing the legal form.
Our extensive experience based on numerous
completed projects provides a foundation for making
the right choice from among the available variants,
and also facilitates implementation.
The scope of services offered by Grant Thornton
includes:
Establishment of a limited partnership
• comprehensive diagnosis of all material circumstances of the client’s situation in order
to determine the optimal solution in terms of the ownership structure and implementation process
• drafting and agreeing with the client the contents of the limited partnership operating agreement
and, potentially, the general partner’s agreement
• determining the principles of representation
of the limited partnership (general partner’s responsibilities, scope of powers of attorney,
signing powers)
• defining the principles governing the transfer
of funds to partners, taking into account their
involvement in the activities of the limited partnership
• comprehensive services related to the registration process of the limited partnership and general partner in the National Court Register, tax office, social insurance institution, statistical office, etc.
Changing legal form to a limited partnership
• identification of all material aspects of the change in legal form
• recommendation regarding the approach to changing the legal form
• preparation for the process of changing the legal
form (identification of the necessary steps and
obligations, determining how to interpret transactions taking place during the change
process for tax purposes, including identification
of potential risks)
• development of a detailed schedule for the process and optimal delegation of tasks related
to individual activities
• drafting the necessary formal and legal documents relevant to the process (with content agreed with
a notary public)
• comprehensive services related to the registration process with the National Court Register,
tax office, social insurance institution, statistical office, and other institutions
• assistance in relations with business partners (including but not limited to banks and financial institutions, public administration bodies and
registry courts)
• consultations regarding how to reflect the change in legal form in accounting records.
17
2. Structure – how to set up your business properly
Accountancy Bureau
Your accountant
knows almost as much
as you do about your
business. Therefore it is
crucial for you to have
confidence in the
people you work
with.
In Poland, accounting is legally regulated
in the Accounting Act of September 24,
1994. (Journal of Laws of 2002 No. 76,
item. 694, as amended). Formal guidelines
for company accounting are provided in
the Act, for example;
• accepted accounting principles (policies)
• bookkeeping on the basis of accounting documentation
• valuation of assets and liabilities and determination of profits or losses
• preparation of financial statements
• collection and storage of accounting
and other documentation; and others.
Supporting the accounting function
in startups as well as micro and small
enterprises, we fulfill your obligations
related to bookkeeping, payroll calculation
and accountancy and tax reporting.
Our accountancy bureau provides
comprehensive accounting services for
businesses, including business registration,
legal and tax assistance and bookkeeping
in compliance with the Polish Accounting
Act. We support our clients in daily
settlements as well as in filling tax returns.
18
Bookkeeping
The scope of services provided by Grant
Thornton’s Accountancy Bureau include
the following accounting and payroll
services for SMEs:
• Business registration
• Legal and tax assistance during business
registration
• Business address rental
• Bookkeeping services compliant with the Polish Accounting Act
• Payroll calculation
• Tax returns, statements for ZUS, GUS, NBP, PFRON and Intrastat
• Basic HR administration
• Administrative support: transfers, invoicing, business travel accounting
• Financial statements
• Standard reports
We lift your burden of accounting
duties, always ensuring effective and
comprehensive accounting services.
Cooperation with Grant Thornton will
give you the time to grow your business
and build confidence that your books are
in order.
Tax law and accounting law constitute two
independent branches of Polish law, which
due to a common area of regulation, include
common solutions in some parts. Tax revenues,
costs and income are calculated based on
accounting records, but due to material
differences between the tax law and balance
sheet law, they are not equivalent to accounting
revenues, cost and income.
Accounting principles cover commercial
companies and partnerships and all other legal
entities, as well as individuals, civil partnerships
of individuals, general partnerships of individuals
and professional partnerships, if their net
proceeds from sales of goods and services for
the previous financial year amount to no less
than EUR 1.200.000.
• Undertakings are obliged to apply the accepted accounting principles, giving a true
and fair view of their property and financial standing as well as financial results.
• The manager of an undertaking bears
responsibility for the performance of the accounting obligations.
• Account books are kept inboth the Polish language and currency (not English).
• The Financial statement consists of:
a balance sheet; a profit and loss account; supplementary information, comprising
an introduction to the financial statements
as well as notes; statement of changes
in equity and cash flow.
• Account books should be opened within
15 days of the date operations commence,
which is the date of the first event producing effects of a property-related or financial nature.
• Account books should be closed no later
than 3 months after the date ending a financial year. The Financial statement should be drawn up as of the account books closing date.
• Submission of tax returns CIT-8 should
be submitted to the tax office no later than
3 months after the date ending a financial year.
• The Annual financial statement of
an undertaking is subject to approval no later than 6 months from the balance sheet date.
• The manager should submit the annual financial statement to the tax office within
10 days of the date of the approval of
the annual statements.
• The manager should submit the annual financial statement to the Court Register
within 15 days of the date of the approval
of the annual statements.
• In some cases the manager should publish
the annual financial statement in “Monitor Sądowy I Gospodarczy” within 15 days of the date of the approval of the annual statements.
• Approved annual financial statements should be stored permanently.
• Account books should be stored for at least
5 years.
19
2. Structure – how to set up your business properly
Taxes
The structure of the taxation system in Poland is
similar to the majority of European countries and
includes 10 tax titles. The majority of them are
regulated by separate acts. The general material
part and the procedure part of the tax law were
set in the Act – Tax Code.
Income taxes:
• Corporate income tax (CIT)
Taxpayers: legal persons, organizational units without legal personality, partners in partnerships
who are legal persons, tax capital groups.
Tax rates – the basic tax rate equals 19% of
the tax base.
Taxation period, tax payment
the tax year is a calendar year.
taxpayer shall calculate and pay tax monthly by
the 20th day of the month following the month
of earning the income.
Tax losses – a loss incurred by a taxpayer during
a tax year may be offset against the income generated
in the following five tax years, provided that the amount of loss offset in any single year may not
exceed 50% of that loss.
• Personal income tax (PIT) – is a complex structure including different categories of revenues and income
of taxpayers (including revenues from business activities, employment contracts, sale of property rights, dividends received, etc.
Taxpayers – all natural persons achieving revenues
from sources located on the territory of Poland
are taxpayers of personal income tax.
Tax rates – in the case of income achieved by natural persons conducting business activities, such persons
can select:
taxation based on tax brackets
progressive tax scale, differentiating the following income thresholds, i.e. 18% and 32%.
opodatkowanie 19% stopą podatkową
20
Tax base
Over
PLN 85 528
Tax rate in 2013
Up to
PLN 85 528
18% minus PLN 556.02
2.45
PLN 14 839.02+32%
of surplus over PLN 85 528
taxation based on a 19% tax rate (however in the case of selecting flat-rate taxation, the taxpayer loses the right to taxation jointly with a spouse and the right to relief and deductions). It is only for
natural persons conducting a business activity.
Taxation period, tax payment
the tax year is a calendar year.
taxpayer shall calculate and pay tax monthly by
the 20th day of the month following the month
of earning the income.
Tax regulations provide for the possibility to select
a simplified taxation form including tax card and
lump-sum tax on recorded revenues.
Turnover taxes:
• Tax on goods and services (Polish value added tax)
Polish regulations generally stay in accordance
with the Council Directive 2006/112/EC of
28 November 2006 on the common system
of value added tax. Tax on goods and services
is imposed on: supply of goods and provision
of services against payment within the territory
of the country; exports and imports of goods;
intra-community acquisition of goods against payment within the territory of the country;
intra-community supply of goods.
Taxpayers – include legal persons, organizational units without legal personality and natural persons operating a sole proprietorship, irrespective of the purpose or effects of activities.
•
Registration for VAT purposes – before starting
any VAT-able activity, taxpayers are obliged to submit a VAT-5 registration form to the head
of a competent tax office. Small entrepreneurs (whose sales value for the previous tax year did not exceed PLN 50.000) or entities performing
VAT-exempt activities can file the registration form,
but are not obliged to do so.
VAT rates – The base VAT rate is a 23% rate. Additionally, there are preferential 8%, 5%,
0% rates and the so-called exempt rate – “zw”.
The tax base – in the case of intra-community acquisition of goods is the amount to be paid by the purchaser. The tax base includes: taxes, customs duties, charges and other similar duties related
to acquisition of goods, except for VAT; additional costs, such as commission, packing, transport and insurance charged by the supplier to the entity
making the intra-community acquisition.
Documentation duties – taxpayers are obliged
to submit VAT-7 returns by the 25th day of the
next month or after informing the head of the competent tax office in the case of quarter periods
– by the 25th day of the month following each quarter (except for small taxpayers, whose turnover
did not exceed EUR 1.200.000, submitting quarterly VAT returns). Taxpayers making intra-community acquisitions or supplies of goods and services are obliged to submit summary information for monthly
or quarterly periods, by the 15th day of the month following the month or quarter during which tax was chargeable. Additionally, taxpayers are obliged
to draw up INTRASTAT information for monthly periods, by the 10th day of the month following
the month during which the transactions took place.
Excise duty – The Polish Excise Duty Act determines taxation of excise duty goods and passenger cars, organisation of excise duty goods turnover and
marking goods with excise stamps.
Other taxes have significantly less fiscal meaning:
• Tax on civil law transactions – is levied on:
sales agreements and agreements on the exchange
of goods and property rights, loan agreements,
donation agreements, annuity agreements and
agreements on the dissolution of co-ownership, establishment of mortgages, establishment of
usufruct for consideration and servitude
for consideration, irregular deposit agreements, company deeds; amendments to the aforementioned agreements if they increase the tax base; decisions
of courts and settlements if they have the same legal effects as civil law transactions subject to taxation.
• Real estate tax – is imposed on land, buildings and their parts, structures or their parts related
to conducting business activities.
• Road vehicle tax – is levied on trucks, buses, truck-
tractors and ballast tractors, trailers and semi-trailers with the weight and purpose defined in the Act.
• Inheritance and donations tax
• Agricultural and forestry tax
• Gambling tax
Social security contributions
Social security contributions comprise employer
and employee social security contributions. Employees
(insured persons) are subject to the following mandatory
social insurance schemes:
• retirement pension insurance
• disability pension insurance
• sickness insurance
• insurance in respect of accidents at work
Contributions for the above-mentioned insurance
schemes are deducted from the amount which is used
as the basis for the calculation of contribution rates,
i.e. revenue in the meaning of legal provisions on a
natural person’s income tax, attained by an employee
during a calendar month for work performed within the
framework of an employment relationship.
21
2. Structure – how to set up your business properly
Contributions are financed by the insured persons and the contribution payer:
Social security
contribution
Contribution as
a percentage of
the calculation base
Financing by
Employer
Pension
19.52
9.76
9.76
Disability
8.00
6.50
1.50
Sickness
2.45
Industrial injures
0.67 – 3.86
0.67 – 3.86
Total in 2013
30.64 – 33.83
16.93 – 20.12
2.45
Social security contributions for a retirement
pension and disability pension are made by
the employee and by the employer only up
to an annual cumulative earnings limit. In 2013
the limit is PLN 111 390. The remaining social
security contributions (2.45% to be paid by
the employee and 0.67% - 3.86% to be paid
by the employer) are made irrespective of
the earnings amount.
Moreover, there is a contribution to the
Labour Fund and Guaranteed Employee Benefit
Fund, which are to be financed by the employer.
The contribution amounts to 2.45% and 0.10%
of gross remuneration.
People eligible for social insurance are subject
to health insurance amounting to 9 %.
The registration form (ZUS ZUA) is submitted
by the contribution payer within 7 days of
the commencement of social insurance liability
to the relevant branch of ZUS. The monthly
minimum wage in 2013 amounts to PLN 1 600.
22
Employee
13.71
3. Cash
– your business base
3. Cash – your business base
Acquiring capital
The goal of the service is to support
the client in raising the financing
necessary for business development.
Grant Thornton advisers determine capital
needs and identify the available capital
acquisition options, selecting those which best
meet the client’s expectations and their business
circumstances.
We provide advisory services on acquiring
financing from the following sources:
• Handling issues of bonds, convertible bonds, senior bonds and floating securities on WSE CATALYST
• Handling private placements and support in public share issues preceding flotation on NewConnect or the regulated WSE market
• We represent our clients when seeking financing from venture capital / private equity / mezzanine funds
• We support our clients in meetings with banks related to applications for investment loans or project finance
Grant Thornton specialists have extensive
experience in acquiring financing for businesses.
The services we offer are comprehensive and
24
effective – thanks to our competence and in-depth
knowledge of capital raising methods we help
you achieve results which were hitherto beyond
your reach.
The service comprises the following stages:
• Getting to know the business
• Development of the project execution strategy, including choosing the method
of capital acquisition
• Development of the financial model
• Development of business valuation
(in the case of share issue)
• Drawing up tender documents and distributing them to investors
• Drafting appropriate investment agreements
• Negotiations with institutions and investors
• Closing the deal – recapitalization of the client’s business.
With Grant Thornton service quality is
guaranteed – we will do our best to obtain
financing for you on the best terms possible.
Moreover, our experts minimise the risk of
project failure due to a lack of interest in the
project among potential investors. And seen
as our services are comprehensive, the costs
of acquiring capital can be reduced.
25
NewConnect IPOs
3. Cash – your business base
The current
economy provides many
opportunities to raise capital
for development. The key
to success is in selecting
the option that is coherent
with the plans and goals
of the company, and
the perfect execution
of transactions.
Banking relationships
Banks are the traditional source of funding
for established businesses. Where banks lend
to new businesses, borrowers are required to
provide significant collateral such as security
over personal assets. Banks may also seek
undertakings from borrowers such as bank
covenants. Banks expect to understand the
business, usually requesting a detailed business
plan. At the moment obtaining bank finance is
slow so it is critical the business plan ticks all the
boxes.
Banks are having a tough time too. They
may be more cautious and concerned with bad
debt, so will need greater persuasion to lend
you money. In many areas, new lending will
be severely restricted. The banks will focus
increasingly on the quality of their loan book,
and their key concern will be loan recoverability.
That’s why you should treat your banker as a
partner in the business. You need your banker to
believe in you and your product as much as you
do. You need to get them as excited as you are.
This service is addressed to companies
seeking bank financing for their operations
and development. As part of the service, Grant
Thornton advisers draw up a report describing
your planned undertaking in the context of your
company’s key business areas and the business
sector in which it operates. The document is then
26
sent out to banks to determine project financing
options and choose the best offer.
Our experience enables us to draw up the report
in such a way that it highlights the issues of
importance to a financial institution and contains
all the necessary information. Data provided
in the form required by banks facilitate the
bank analysts’ job, which in turn accelerates the
process of obtaining financing for the company.
The report developed by the Grant Thornton
advisory team covers the following scope:
• Description of the planned project
• Company description – business profile
• Company description – legal and organisational aspects
• Analysis of the business sector
• The company’s positioning in the sector
• Financial forecasts developed by
the company, covering the planned debt
repayment period
• Breakdown of banking products used by
the company
The basic version of the service does not
include a verification of the company’s financial
forecasts. By cooperating with Grant Thornton,
you will receive a professionally written report
and save time in obtaining bank financing.
NewConnect is a platform for financing and secondary
trading organized by the Warsaw Stock Exchange.
It is based on the form of the Alternative Trading
System (ATS), characterized by simplified requirements
in comparison to admission to trading on a regulated
market.
Determining the interest in the company includes:
• Development of the project execution strategy
• Drawing up a questionnaire checking interest in
the project, which is distributed to investors
• Determining the investors’ interest in the company
• Review meeting
NewConnect is primarily dedicated to companies in
the early stage of development, with a high potential
of growth, seeking capital to raise from several hundred
thousand PLN to several million PLN, representing
the most innovative sectors of the economy.
Raising funds through NewConnect is associated with
a number of benefits:
• simplified formalities and procedures for admission
• low cost of debut and listing
• relatively low cost of raising capital.
Presence on the NewConnect market provides
a range of benefits associated with being listed as a public
company: excellent exposure to business partners,
promotion and increased recognition of the company
as well as increased credibility from banks and other
counterparties perspective. In addition, the issuer
receives another opportunity to obtain the financing
needed for development by further share issuance.
Negotiations and company recapitalisation include:
• Development of the financial model
• Company valuation
• Drawing up tender documents
• Contact with the interested investors
• Road Show – presentation meetings
• Negotiations with key investors concerning
the investment contract
• Company recapitalisation
Formal activities include engaging an agent/sponsor
of the issue, drawing up the Information Document
and preparing applications to the Warsaw Stock
Exchange, KDPW, KNF. As a result of these activities,
the company is floated on NewConnect. To be able
to realise the potential offered by a NewConnect IPO,
it is necessary to adapt the company’s organisational
structure to stock exchange requirements and to
implement public company standards.
Example schedule for the introduction of NewConect.
Decision concerning the
strategy of capital raising
Meetings with investors
and negotiations
Fulfillment of formal procedures
for NDS and WSE
Surveys among investors
– distribution of teaser
Shares allotment and cash
inflow to the company
Debut/First day of tradin
Distribution of offering materials
to interested investors
Preparation of registration
document
An initial public offering on NewConnect is a very
important milestone in a company’s history, as it
introduces the necessary financing for the business
and helps realise planned investments and above-average
growth rates.
The key to success is not only convincing investors
that the company’s development plans are sound, but
also finding a compromise between the owners’ and
investors’ expectations as to the value of the business.
Floating a company on NewConnect takes from 4 to
6 months. The scope of services performed by Grant
Thornton advisers includes determining the interest in
the company, negotiations and recapitalisation as well
as observing formalities.
NewConnect Authorised Advisers from Grant
Thornton provide support to companies in making
the necessary adjustments. With our extensive
experience we can provide a top-quality service,
and cooperation with our NewConnect experts boosts
your chances of success on the stock exchange.
27
3. Cash – your business base
Bond issue on WSE Catalyst
Catalyst is the first organized market
of debt financial instruments in Poland.
Issuance of corporate bonds on Catalyst
enables us to broaden the horizons
of investment.
Catalyst debut is preceeded by the submission
of an application for the introduction of financial
instruments to the market. An attachment to the
application should include:
• Information document ( in case of private placement for alternative WSE market and/or BondSpot)
• Information note (where other financial instruments of that issuer are already listed
on a regulated or alternative market);
• Prospectus or information memorandum
(in case of public offering and in case of financial instrument introduction to the regulated market).
Issuers have the possibility to receive
authorization for the issue of bonds. As a result
of authorization, each series of bonds, which
do not necessarily have to be dematerialized,
is registered in the publicly available
information system of Catalyst. In the alternative
trading system issuers of publicly listed debt
instruments can cooperate with an Authorized
Advisor which supports in complying with
disclosure requirements and helps in preparation
of the information document, which is the basis
for the introduction of instruments to trading.
The Public Offering Act defines two ways to
conduct a bond issue: via public offering and
through private placement.
Private placement of bonds is defined as offering
of bond securities to fewer than 99 investors
identified by name. In this case, it is not
required to prepare a prospectus or information
memorandum.
Bonds – are a debt
security issued in
series, in which the
issuer states that he is
indebted to the owner of
the bond (bond holder)
and is obliged to return
the borrowed amount.
Provision may be settled
in cash or in kind.
Issue Price – the price
at which the issuer sells
bonds in the primary
market.
Example schedule for implementation of the Catalyst through private offer.
identification of interested investors
decision
concerning
the strategy
of capital
raising
surveys
among
investors
– distribution
of teaser
2 weeks
28
distribution
of offering
materials
to interested
investors
negotiations and capital raising
meetings with
investors and
negotiations
bonds
allotment
and cash
inflow
to the
Company
10 weeks
formal requirements related to debut
preparations
of registration
dokument
fulfillment
of formal
procedures
for NDS and
WSE
6 weeks
debut / first
day of
trading
Debt securities are traded on two markets: retail
and wholesale, managed respectively by Warsaw
Stock Exchange and BondSpot. Each of these
markets is further divided into two platforms:
alternative and regulated markets. Each of the debt
instruments can be listed on WSE platform and
BondSpot. The goal of the service is to provide
advice on raising debt capital in the form of bonds
and assistance in introducing companies to the
Catalyst market.
As Catalyst Authorised Advisers, Grant
Thornton specialists develop business and financial
models presenting the company’s appeal to potential
investors. We also take care of the formal aspect
of the process, including drawing up the necessary
documents and collateral arrangements.
Thanks to the extensive experience and expertise
of our advisers, the bond issue process and Catalyst
début will be conducted in an effective manner.
As part of the service, we also provide advisory
services in seeking and acquiring investors.
To make sure that all related activities present
a consistent business vision, we coordinate the work
of all the parties involved, including law firms.
The service covers the following stages:
• Development of the project execution strategy
• Determining the conditions for acquiring
debt capital
• Negotiations with investors
• Acquiring capital
• Compliance with formal requirements connected with bond registration and listing
• Début on the Catalyst market
Competence and experience in Catalyst share
issues allow Grant Thornton advisers to minimise
the risk of failing to raise capital from investors
and the risk of insufficient bond prices.
29
Ongoing tax advice
4.Responsibilities
– how not to get lost in them
„Why should I use the services of a tax consultant? After all,
I employ a good accountant and pay him a lot of money, I always
send him to training and subscribe to specialized press. For that,
he should take care of my tax affairs. To such framed views of CEOs
I always respond with an analogy: when I have an excellent family
doctor, but I have a tooth ache, would I go to my doctor or to the
dentist? The choice is simple. Similarly, it should be obvious that
any accountant who deals with the company books and reporting,
providing reports and management information, assessment of
agreements, deployment of free cash, supervision of liquidity
and many other critical issues, is unable to perform the function
of a good tax advisor.”
Our experience and commitment in
getting to know the specifics of your
business and your business goals
guarantees our very high
effectiveness in solving tax problems.
We do not theorise in our opinions, we solve our clients’
problems. We settle more than a thousand diverse issues
for our existing clients every year, which helps us build
a very broad basis of experience and solutions that we
can apply in future cases.
We work in a comprehensive manner. We assess the
consequences with regard to law and taxation (across
all tax liabilities), as well as the balance sheet and business
consequences.
Grant Thornton’s ongoing tax advisory includes
the following services:
• Solving clients’ tax problems
• Providing tax interpretation of business events,
as they occur
• Analysis of contracts with regard to their tax consequences
• Drafting agreements with compliance to intended tax consequences
• Development of tax optimisation strategies for implementing intended business operations
• Support in implementing the proposed strategies for business operations by drawing up drafts of legal documents
A taxpayer who has
an agreement with an
advisor feels safe and
secure that the accounts
are correct. It is one
of the most important
benefits of ongoing
service
We provide ongoing tax advisory on an as-needed
consultation basis or through continuous cooperation.
The service is priced and rendered on the basis of an
analysis of the given actual state of affairs and documents
(agreements, administrative decisions, etc.) submitted
by the client. Client expectations are examined in each
instance during an interview.
Depending on the nature of the problem and
your expectations, ongoing tax advisory can take
the form of:
• written tax opinions
• memos sent by email
• telephone consultations
• consultation and training meetings
• hotline
31
4. Responsibilities – how to avoid getting lost
Tax optimisation
Each business function or a specific undertaking may
be realised within various legal and organisational
frameworks. The adopted solution affects the amount
of tax liability. The goal of tax optimisation services
is to identify the legal and organisational frameworks
which ensure the lowest possible level of taxation
to the entrepreneur. Optimisation activities cover both
the permanent elements of business processes going
on in an enterprise, such as goods supply, marketing
activities, investments and renovations, payroll, and
one-off activities, including e.g. investment undertakings,
new methods of promotion or contracts with new
business partners.
The complete scope of the service comprises the
following stages:
• Diagnosis of current status – development of the
AS IS model
• Analysis of current status in terms of tax effectiveness
• Developing optimisation solutions and consulting
them with the client
• Description of the target process model
– the TO BE model
• Scheduling the implementation of optimisation solutions
• Supporting the client in the implementation
of approved solutions
As a result, Grant Thornton tax advisers provide
you with a range of solutions, including optimisation
activities defined in detail and scheduled, leading to
complete implementation. If necessary, we offer
support in developing any related documentation,
regulations, agreements, procedures as prerequisites
for the implementation of optimisation solutions.
Grant Thornton advisers take into account the
requirements of a given business sector and client
expectations, while the solutions we propose are
consistent with the client’s business model and goals.
32
Optimisation of structures
and transactions
The goal of tax
optimisation services
is to identify the legal and
organisational frameworks
which ensure the lowest
possible level of taxation
to the entrepreneur.
The goal of our services related to tax optimisation
of structures and transactions is to minimise tax liabilities
while maintaining regulatory compliance, by means
of solutions related to the legal form of business, shape
of group structures and use of various legal institutions
to achieve business goals.
The extensive experience and knowledge of Grant
Thornton advisers enable us to develop and successfully
implement optimisation structures adapted to the client’s
unique needs and specific business models. The solutions
we propose combine increased tax efficiency of your
business with tax security.
The international network of Grant Thornton member
firms covering more than 100 countries, including several
countries with attractive tax regimes in place, enables our
specialists to design and implement not only domestic
but also transnational optimisation structures based on
offshore tax jurisdictions.
The continual changes in Polish tax law regulations do
not just hinder the security of Polish taxpayers’ business
activities, but also deliver new tools which, when used
skilfully in tax planning, can help reduce taxes or extend
tax due dates.
Our specialists’ activities within the framework of tax
optimisation of structures and transactions include:
• Identifying the client’s tax optimisation needs both in terms of the structure of their business and individual transactions
• Development and presentation of bespoke concepts
for enhancing business tax efficiencies, taking into
account such issues as the unique features of a given business, adopted business goals, boundary conditions specified by the client and applicable legal regulations, costs of implementing a structure/concluding
a transaction
• Detailed analysis of potential risks associated with implementing and functioning of the target structure
and undertaking measures aimed at reducing or eliminating them, including obtaining private rulings
from tax authorities
• Preparatory activities preceding the implementation
of a given solution
• Comprehensive legal and tax services related to the optimisation structure implementation process,
including:
Establishment of new legal entities
Business consolidation, transformation, division, liquidation
Contributions of assets, enterprises and their organised parts
Sale and other forms of share transfer
Changes in equity
• Process supervision and coordination of all entities involved in individual activities
• Assistance in disclosing transactions for tax and financial reporting purposes
33
4. Responsibilities – how to avoid getting lost
Tax Compliance
The tax compliance service provided
by Grant Thornton tax advisers aims
to support you in drawing up tax returns.
Depending on your needs, the scope of works may
cover both reviewing pre-prepared tax calculations
for compliance with bookkeeping records, or drawing
up tax returns with an in-depth review of data used
as the tax base. The tax compliance service is often
combined with a tax review, including all factors
affecting the determination of the amount of tax
or selected areas of the client’s operations.
The scope of service may cover the following taxes:
Corporate Income Tax (CIT)
• calculating the amount of CIT due and prepayments
• verification of the client’s calculation of the amount
of CIT due and amounts of prepayments
• verification of procedures related to calculating
CIT due and CIT prepayments
• tax reviews of data underlying the tax base
Withholding tax
• comprehensive analysis of taxpayer’s proper
compliance with their obligations
• calculating withholding tax due
• obtaining certificates of tax residence
• drawing up tax returns
Goods and services tax (VAT)
• taxpayer registration
• drawing up VAT returns, summary statements
and INTRASTAT
Expatriate accounting
Grant Thornton also offers the international tax
compliance service – tax reporting covering multiple
tax jurisdictions. The service has been designed
mainly with holding groups in mind.
34
Transfer pricing
Transfer pricing services aim to eliminate
or at least limit the tax risks related
to transactions between related entities
and optimisation of tax liabilities
resulting from those transactions.
Grant Thornton advisers take into account the
requirements of a given business sector and client
expectations, while the solutions we propose are
consistent with the client’s business model
and goals.
The scope of services in the area of transfer
pricing includes:
• Analysis of tax risks related to transactions
with related entities
• Drawing up tax documentation required
by the law for transactions between related entities
• Developing transfer pricing policy and principles of accounting between related entities
• Benchmarking
• Assigning the profits to a permanent establishment of a foreign enterprise operating
in Poland
• Analysis and drawing up agreements between related entities (including cost sharing agreements)
• Assistance in applying for advance pricing arrangements
• Advisory services in tax proceedings concerning transfer pricing (including preparation
of the argumentation and documents supporting
the taxpayer’s position)
• Transfer pricing trainings and workshops
Our services are provided by specialists with
broad knowledge and practical experience
in transfer pricing issues.
35
Contact us
Anna Pisarek
Director – establishment of business
T +48 32 721 3782
M+48 661 538 523
Eanna.pisarek@pl.gt.com
www.GrantThornton.pl
© 2013 Grant Thornton Frąckowiak sp. z o.o. sp. k.
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Grant Thornton Frąckowiak jest firmą członkowską Grant Thornton International Ltd