Cos. cheer plans shifting to quarterly, not monthly, tax filings
Ministry officials confirmed last week that Balcerowicz plans to amend Poland's tax code to require companies to file taxes on a quarterly, rather than monthly, basis.
"We're working to eliminate the (monthly) filing requirement for corporate income (taxes) as quickly as possible, maybe by the end of this year," said Piotr Dubno, official spokesman for Balcerowicz.
Corporate finance directors and accountants praised the move, but urged the government to go a step further and shift to a quarterly filing system for value-added tax (VAT) and personal income tax payments, which must still be submitted every month.
"Certainly the ministry is moving in the right direction," said Ireneusz Weglowski, vice president of Orbis, a publicly traded hotel and tourism company. "But it doesn't make much sense for us to file VAT (payments) monthly and our corporate income taxes quarterly. That might make things even more complicated than they are now."
According to a tax survey by Big Six accounting firm Price Waterhouse, Poland and Brazil are the only countries in the world that require monthly filings of personal income tax payments. "Monthly reporting is, in a word, unnecessary," said Dennis Howarter, a partner with Price Waterhouse's tax department in Warsaw.
The ministry has been under pressure to revamp Poland's tax filing system since January, when it set up the Team on Debureaucratizing the Economy to simplify or eliminate government regulations. "We have seen nearly universal support within this group for a quarterly (filing) system," Dubno said.
Dubno added that the ministry plans to amend the tax code "as soon as possible" to create a quarterly filing requirement for corporate income taxes. The spokesman was unsure, however, whether it would extend this quarterly system to include VAT and personal income tax payments. "That's still under discussion," he said.
Corporations in Poland currently pay income tax of 36%, but that is scheduled to fall to 34% in 1999 and then to 32% in 2000.
Janusz Fiszer, tax adviser and partner with White & Case in Warsaw, said the monthly requirement for VAT payments provide the "biggest headache" for corporate accountants. That's because companies are given just 30 days to record VAT payments on goods and services that often take months to deliver, creating a disparity between revenue and tax payments.
A quarterly system would create a "grace period" for companies that are in sectors where it's difficult to receive timely payments, he said. "A quarterly filing system (on VAT payments) would give companies some room to maneuver," Fiszer said.
Tomasz Michalik, partner in the tax and legal department at Ernst & Young, said a quarterly system would have the largest benefit for small firms that hire accountants on a part-time basis. "Those (accountants) will only have to come in four times a year, instead of every month," he said.
"We're working to eliminate the (monthly) filing requirement for corporate income (taxes) as quickly as possible, maybe by the end of this year," said Piotr Dubno, official spokesman for Balcerowicz.
Corporate finance directors and accountants praised the move, but urged the government to go a step further and shift to a quarterly filing system for value-added tax (VAT) and personal income tax payments, which must still be submitted every month.
"Certainly the ministry is moving in the right direction," said Ireneusz Weglowski, vice president of Orbis, a publicly traded hotel and tourism company. "But it doesn't make much sense for us to file VAT (payments) monthly and our corporate income taxes quarterly. That might make things even more complicated than they are now."
According to a tax survey by Big Six accounting firm Price Waterhouse, Poland and Brazil are the only countries in the world that require monthly filings of personal income tax payments. "Monthly reporting is, in a word, unnecessary," said Dennis Howarter, a partner with Price Waterhouse's tax department in Warsaw.
The ministry has been under pressure to revamp Poland's tax filing system since January, when it set up the Team on Debureaucratizing the Economy to simplify or eliminate government regulations. "We have seen nearly universal support within this group for a quarterly (filing) system," Dubno said.
Dubno added that the ministry plans to amend the tax code "as soon as possible" to create a quarterly filing requirement for corporate income taxes. The spokesman was unsure, however, whether it would extend this quarterly system to include VAT and personal income tax payments. "That's still under discussion," he said.
Corporations in Poland currently pay income tax of 36%, but that is scheduled to fall to 34% in 1999 and then to 32% in 2000.
Janusz Fiszer, tax adviser and partner with White & Case in Warsaw, said the monthly requirement for VAT payments provide the "biggest headache" for corporate accountants. That's because companies are given just 30 days to record VAT payments on goods and services that often take months to deliver, creating a disparity between revenue and tax payments.
A quarterly system would create a "grace period" for companies that are in sectors where it's difficult to receive timely payments, he said. "A quarterly filing system (on VAT payments) would give companies some room to maneuver," Fiszer said.
Tomasz Michalik, partner in the tax and legal department at Ernst & Young, said a quarterly system would have the largest benefit for small firms that hire accountants on a part-time basis. "Those (accountants) will only have to come in four times a year, instead of every month," he said.
