Polish minister of digitalisation Krzysztof Gawkowski announced that a project including a digital tax has been added to the government’s work list. If adopted and enacted, the project will be a move that positions Poland alongside France or Italy, creating a local response to the sluggishness in developing a global tax agreement at OECD level.
The proposed tax structure precisely targets the largest entities. With the revenue threshold mechanism set at EUR 1 billion on a global scale and PLN 25 million on the local market, the new burden will bypass Polish start-ups and medium-sized platforms. The Ministry of Digitalisation is sending a clear message: we are taxing scale, not innovation.
Selectivity architecture
The key to understanding the new regulation is who is missing from it. The government has opted for broad exemptions that protect traditional e-commerce and the financial sector. A fashion brand’s online shop or a bank’s mobile app remain outside the reach of the new tax. Instead, the tax will strike at the heart of the business model of platforms such as Google, Meta or Amazon – where revenue is generated through personalised advertising, marketplace intermediation and monetisation of user data.
The maximum rate of 3% on gross revenues may seem low, but in the world of technology, where operating margins are under constant pressure, it is a significant amount. An important safety net for companies with a real investment presence in Poland is that the new levy can be reduced by the income tax (CIT) paid. This suggests that the government does not want to penalise companies with a physical presence in the country, but rather those that transfer profits to jurisdictions with more favourable taxation.
Digital arms fund
Behind the ideological façade of ‘levelling the playing field’ lies hard budget mathematics. Estimates indicate that by 2030, the tax could feed the state coffers with more than PLN 3 billion a year. However, Warsaw does not intend to use these funds for current consumption. The strategy is to create a closed loop: the money collected from the giants is to return to the market in the form of investments in Polish AI, cyber security and digital competence.
For the local tech ecosystem, this is a double-edged sword. On the one hand, the announcement of billions in AI subsidies is promising. On the other – there is a legitimate fear that the platforms subject to the tax will simply raise commissions for Polish vendors or increase advertising prices, which will ultimately be financed by the domestic consumer.
International context
Poland is embarking on a path previously followed by Austria or the UK, among others, while ignoring the cautious attitude of Germany or Ireland. The decision comes at a time when discussions on the so-called OECD First Pillar have stalled. By introducing its own solution, Warsaw gains negotiating leverage, but exposes itself to potential trade retaliation, particularly from the US, which traditionally sees digital taxes as discriminatory towards its domestic champions.
The details of the definition of ‘digital interface’ and the role of the tax representative will be crucial in the coming months. It is in these technical provisions that the question of how profoundly the new tax will affect the profitability of digital operations in Central Europe will be decided.
