Offset technology transfer run into first problems - taxation

Companies, which are to receive money from the offset program might be forced to reject some of the technologies due to the fact that they will be unable to pay taxes which they will be obliged to pay as the transfers are taxable. This is despite the fact that the government stressed that these offsets were preferred by Poland. "All such operations, which are subject to commercial law, are normally taxed," said Finance Ministry spokesman Jarosław Skowroński. The nominal value of the offset deal was calculated at $7.75 billion and about 10-12% of this amount ($700-800 million0 is the value of transferred technologies. This means that the companies would have to pay in about $200 million of this in income tax, as the American side is interested in maximum evaluation of each of their projects. On some of the other goods and services they also might have to pay 22% VAT, plus various custom duties. The final decisions now rests with the Finance Minister. (Rzeczpospolita, pp. A1, B1) M.M.