A Representative Office is a subordinated organizational entity functioning for the purpose of advertising and promoting the business activity of the foreign entrepreneur.
The Representative Office may also be established by foreign persons appointed to promote the economy of the country of their seat, but the scope of activities of such representative office may be limited exclusively to advertising and promotion of the economy of the aforesaid country.
Obligations of a foreign entrepreneur
A foreign entrepreneur is obliged to:
· use original name of the foreign entrepreneur, together with the Polish translation of the entrepreneur’s legal form of operating and with the phrase ‘przedstawicielstwo w Polsce’;
· keep separate books in Polish in accordance with the provisions of Polish accountancy laws;
· notify the Minister of the Economy of any factual and legal changes concerning data included in the application for registering in the Register of Representative Offices, as well as of the commencement and termination of any proceedings conducted to wind-up the business of the foreign entrepreneur and of the loss of his right to conduct business activity or possess property, not later than 14 days from the time upon which such events take place.
Partnerships and companies
A registered partnership and professional partnership deed shall be performed in writing under the paint of nullity. Deed of other partnerships and companies shall be made in the form of a notarial deed.
Partnerships and companies must be registered in the Central Statistical Office (G?ówny Urz?d Statystyczny GUS) which grants a REGON statistical number.
They also have to be registered in the Register of Entrepreneurs of the National Court Register (Krajowy Rejestr S?dowy KRS), which grants a KRS number.
Tax-paying-entrepreneurs must be also be registered in the Tax Office and obtain Taxpayer’s Identification Number (Numer Identyfikacji Podatkowej NIP). Certain entities must receive VAT certificate. It is also required that they are registered in the Social Security Office (Zak?ad Ubezpiecze? Spo?ecznych ZUS).
Cost of establishing new partnership or company vary depending on the form and initial capital. Generally, the most expensive form in doing business is the Join-Stock company and Limited Liability Company.
There are also formal requirements for Branch Offices and Representative Offices. A Branch Office has to be registered in the Register of Entrepreneurs of the National Court Register (Krajowy Rejestr S?dowy KRS). A Representative Office has to be registered in the Register of the Representative Offices of Foreign Entrepreneurs, which is kept by the Minister of Economy.
The Polish tax system distinguish 12 types of taxes, including:
Ø Direct taxes
-Corporate Income TaxCIT,
-Personal Income Tax PIT,
-tax on civil law transactions,
-tax on means of transport,
-inheritance and donations tax,
-tax on dogs;
Ø Indirect taxes:
-Value Added Tax VAT (tax on goods and services),
The CIT is, apart from VAT, the most important tax levied on activities of legal persons in Poland. This is flat-rate, generally imposed on income, irrespective of the source of revenue, from which the income has been earned.
The basis CIT tax rate is 19% of the tax base. This rate is also applicable to incomes from dividends and other incomes from participation in profits of legal persons having their seat in Poland.
Subject of taxation
Following entities are subjects of the CIT:
· legal persons (in particular:,, capital companies in organization,
· partners who are legal persons,
· foreign partnerships, if in the states of their headquarters they are treated as legal persons and they are subject to unlimited tax liability,
· tax capital groups.
Basically, natural persons in Poland are subject to income tax which is calculated in according to a progressive tax scale. At present, there are two general income thresholds: 18% and 32%.
Polish VAT is harmonized with the common VAT system binding in the Member States of the European Community since May 1, 2004. It means that VAT is governed by the Polish Law as well as by the Community Law.
There are four tax rates:
· 22% rate is a basic rate; applies to majority of goods and services,
· 7% rate applies to specific goods and services (e.g. goods related to health protection, groceries and hotel services),
· 3% rate applies to supply of some farm produce,
Subjects of taxation
The VAT is imposed on entities which professionally carry out below stated activities:
· supply of goods,
· supply of services,
· export of goods,
· import of goods,
· intra-Community supply of goods,
· intra-Community acquisition of goods.
It must be noted that 0% rate applies to intra-Community supply of goods as well as exports of goods.