International companies siphon profits out of Poland, depriving state budget

International companies operating in Poland often illegally transfer profits abroad to reduce taxes. Worldwide such transfers reach an amount of $8 billion, according to International Monetary Fund (IMF) analysis. Poland is exceptionally exposed to this risk. The main problems are deficiencies in the tax law and the incompetence of treasury inspectors. Poland also lacks tax offices abroad. As a result many internationally profitable companies record losses on the Polish market for years. There are several ways to accomplish this, which are difficult to uncover. Foreign companies may buy products from their subsidiaries for very low prices. Some subsidiaries pay a significant part of their revenues for research abroad. Lending and borrowing money at the same time with different interest rates is also possible. Some companies, including Agros, are accused of transferring assets to their foreign owners. Several cases of profit transfers are already in the courts. (Rzeczpospolita, pp. A1,B1) M.K.