Poland: Changes to banking tax

As of 1 February 2016, Poland has had a banking tax.

This tax applies to domestic banks, branches of foreign banks, branches of credit institutions, cooperative savings and loans associations, domestic insurance undertakings, domestic reinsurance undertakings, branches of foreign insurance or reinsurance undertakings, main branches of foreign insurance or reinsurance undertakings and lending institutions.

The tax is charged on the amount by which the taxpayer's total assets (as per its month-end trial balance derived from general ledger accounts) exceed the applicable statutory threshold. These thresholds are defined for the various categories of taxpayers as follows:

1. PLN 4 billion for domestic banks, branches of foreign banks, branches of credit institutions, cooperative savings and loans associations;
2. PLN 2 billion for domestic insurance undertakings, domestic reinsurance undertakings, branches of foreign insurance or reinsurance undertakings, main branches of foreign insurance or reinsurance undertakings;3.    PLN 200 million for lending institutions.

There is case law from the Supreme Administrative Court (including its judgments of 13 January 2022 in cases no. III FSK 235/21 and III FSK 3324/21) construing these regulations unfavourably for the financial industry. The court has held that, for banking tax purposes, the statutory design for the basis of assessment is based solely on taxpayer's assets (without reference to its liabilities or equity).

For the taxpayer categories in points 2 and 3 above, assets are taken to mean the aggregate assets of all taxpayers that are directly or indirectly controlled or jointly controlled by one entity or a group of related entities.

There are certain deductions from the basis of assessment available for domestic banks, branches of foreign banks and branches of credit institutions. These include, among other items, equity, assets purchased from the National Bank of Poland as security for refinancing extended by that Bank, and treasuries treated as assets.

In addition, all taxpayers except lending institutions will make a deduction from the basis of assessment for the money's worth of assets represented by bonds issued by the Bank Guarantee Fund or asset manager and of loans they extended to the Bank Guarantee Fund or asset manager.

The banking tax is charged at the monthly rate of 0.0366% of the assessment basis.

A bill to amend this legislation was published on 9 Nov 2022. According to the bill, domestic banks, branches of foreign banks, branches of credit institutions, and cooperative savings and loans associations will be entitled to make deductions from the basis of assessment for the money's worth of assets represented by treasuries or securities statutorily guaranteed by the State Treasury. This change is intended to decrease the cost of capital obtained through issuance of bonds statutorily guaranteed by the State Treasury. Moreover, it is also proposed that the above taxpayers might make deductions from the assessment basis for money's worth of assets arising from repurchase transactions involving treasuries. Where the other party to such a transaction is any entity other than the State Treasury, the National Bank of Poland or the Bank Guarantee Fund, the deduction will be available if the transaction is executed on a regulated market or via a multilateral trading facility and is subject to settlement via CCP.
The bill is currently being processed in the lower house of Polish parliament.

If you wish to discuss this topic, please contact: WTS Saja, Warsaw

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