Capital gains from EU deposits; Legal costs; Flat-rate tax

When depositing money in banks from other members of the European Union, Poles will not avoid taxation on capital gains. This is because the tax office will find out about the deposit through an information exchange system, which will be effective in the EU from January 1, 2005. ... Expenses incurred on legal services which concerned the activities of a company can be recognized as tax deductible, while VAT invoices which are evidence of such services can serve as a basis for tax lowering. ... The Finance Ministry maintains that flat-rate tax is unjust, while at the same time it is considering its introduction. "A flat rate tax of 15.4% would mean a significant increase in the burden on less well-off taxpayers," states the Ministry's web site. (Tax News is based on PricewaterhouseCoopers Tax Department web service, www.taxonline.pl) A.K.