IT firms vow to fight tax harassement
According to press reports, citing sources close to several listed integrators, the tax authorities are currently examining at least five firms, including some of the country's largest IT companies. Two of the firms are said to have been charged more than zł.10 million apiece, although they still have the right to appeal. Ironically, the tax office itself made purchases of VAT-free licenses in the period for which it is demanding outstanding payments from companies, that is, in the years 1999-2001.
Ireneusz Dąbrowski, vice-president of the Polish Chamber of IT and Telecommunications (PIIT), vows to fight the authorities, saying that the large companies targeted by the authorities have the resources and will to take the cases to court. He added that the tax man "would get burned this time."
The news came just a week after JTT, a Wrocław-based hardware maker, finally emerged from bankruptcy protection... back into bankruptcy. The company, which was charged with tax avoidance and fined zł.20 million in 2000, later won a court case against the tax man, but by the time it had got the cash from tax rebates, it was already on the brink of bankruptcy. JTT, while a poignant example of the tax man's ability to wreck companies, is not the best known case of this.
Optimus, another hardware producer, based in Nowy Sącz, was also charged with tax avoidance, and its chief executive, Roman Kluska, was famously arrested in a spectacular raid by anti-terrorist police in July 2002. He was later released and declared innocent, but the experience was enough to drive him out of business. Kluska then focused on charity work and became a symbol of the harassment businesspeople suffer at the hands of the authorities. Last Friday, it was suggested that he was being put forward as a compromise candidate for prime minister. 'The tax martyr' is thought likely to prove popular with business and pro-market opposition parties that had defended him during his persecution.
Meanwhile, the tax man's current actions are likely to create yet more martyrs.
In a separate, though apparently not unrelated, development, lawyers have questioned the legality of the law that levies VAT on exports of IT services. According to these experts, the law is in direct breach of EU directives, which clearly set out that the tax on such services should be levied in the country of the service receiver. This will likely lead to double taxation, thus making domestic providers less competitive on the pan-European market.
The law has already led to IBM shelving its plans for an IT outsourcing center in Kraków, with the company's president, Dariusz Fabiszewski, saying in a recent interview with the Business Journal that it is likely to have more impact to that effect in the future, as well as landing the country in trouble with the EU. Expect more fun from the tax office in the coming months.
Ireneusz Dąbrowski, vice-president of the Polish Chamber of IT and Telecommunications (PIIT), vows to fight the authorities, saying that the large companies targeted by the authorities have the resources and will to take the cases to court. He added that the tax man "would get burned this time."
The news came just a week after JTT, a Wrocław-based hardware maker, finally emerged from bankruptcy protection... back into bankruptcy. The company, which was charged with tax avoidance and fined zł.20 million in 2000, later won a court case against the tax man, but by the time it had got the cash from tax rebates, it was already on the brink of bankruptcy. JTT, while a poignant example of the tax man's ability to wreck companies, is not the best known case of this.
Optimus, another hardware producer, based in Nowy Sącz, was also charged with tax avoidance, and its chief executive, Roman Kluska, was famously arrested in a spectacular raid by anti-terrorist police in July 2002. He was later released and declared innocent, but the experience was enough to drive him out of business. Kluska then focused on charity work and became a symbol of the harassment businesspeople suffer at the hands of the authorities. Last Friday, it was suggested that he was being put forward as a compromise candidate for prime minister. 'The tax martyr' is thought likely to prove popular with business and pro-market opposition parties that had defended him during his persecution.
Meanwhile, the tax man's current actions are likely to create yet more martyrs.
In a separate, though apparently not unrelated, development, lawyers have questioned the legality of the law that levies VAT on exports of IT services. According to these experts, the law is in direct breach of EU directives, which clearly set out that the tax on such services should be levied in the country of the service receiver. This will likely lead to double taxation, thus making domestic providers less competitive on the pan-European market.
The law has already led to IBM shelving its plans for an IT outsourcing center in Kraków, with the company's president, Dariusz Fabiszewski, saying in a recent interview with the Business Journal that it is likely to have more impact to that effect in the future, as well as landing the country in trouble with the EU. Expect more fun from the tax office in the coming months.
