European Union wants special economic zones and tax breaks abolished

The European Union (EU) is demanding changes in Polish law concerning tax-free zones and tax breaks. Although the Sejm is already working on the issue the abolishment of zones and tax breaks is not very likely. Moreover it is possible that the number of tax-free zones will increase. Next year the legislation on creating and using tax breaks in special economic zones will be debated. The idea of a tax-free paradise is strongly criticized by the EU, since all producers operating in the area do not pay taxes. In order to be granted a license for operating in a tax-free zone a manufacturer has to locate his company there, and the company has to be registered within the zone. The regulation concerning special tax-free zones violates EU law and therefore has to be either abolished or changed. The new regulations would take effect Apr.1, 2001. Special economic zones will be operating until 2017. (Puls Biznesu, page 4) J.K