Month: May 2025

The government has published information regarding tax changes coming into effect in 2023. In this article, we present the most important of them:

No taxation of private rental under general rules

From 2023, the rules for taxing rental income from residential properties outside business activity will change.
Individuals earning income from private rental will no longer be able to tax this income under the general rules — i.e., the progressive tax scale. The only available form of taxation will be the lump sum tax on recorded revenue (ryczałt).

This means rental income will be taxed at a rate of 8.5% on income up to 100,000 PLN, and 12.5% on the excess income above 100,000 PLN.

Taxpayers will no longer be able to deduct costs related to the rented properties. The lump sum tax on recorded revenue does not allow deductions for expenses such as repairs, depreciation, or mortgage interest.

No depreciation of residential premises

Changes in tax regulations will also affect depreciation of residential properties. Taxpayers renting residential premises as part of their business activity will not be allowed to depreciate these premises or include depreciation charges as tax-deductible expenses from 2023 onwards.
The prohibition on depreciation applies to residential buildings, residential premises, cooperative ownership rights to residential premises, and rights to single-family houses in housing cooperatives used in business activities or leased/rented by personal income tax (PIT) and corporate income tax (CIT) taxpayers.

New rules for applying the tax-free allowance

Tax changes in 2023 will also require that from this year, the tax remitter will be obliged to reduce tax advances by an amount equal to no more than 1/12 of the tax-reducing amount if the employee submits a declaration to apply such reduction.
A taxpayer (employee) will be allowed to submit declarations to up to three remitters, indicating that the remitter is authorised to reduce the advance:

• by 1/12 of the tax-reducing amount for one remitter
• by 1/24 of the tax-reducing amount for two remitters
• by 1/36 of the tax-reducing amount for three remitters

Application for no advance tax deduction during the tax year

In 2023, the changes will also extend the catalogue of income types that entitle taxpayers to submit an application for exemption from advance tax deductions in a given tax year.
For example, a taxpayer earning income from employment contracts, civil contracts (umowa-zlecenia), or specific-task contracts (umowa o dzieło) may submit such an application if they anticipate that their taxable income under the progressive scale will not exceed 30,000 PLN in the tax year.

Abolition of the obligation to submit PIT/WZ information (bad debt relief)

Entrepreneurs will no longer be required to submit, along with their tax returns, information on receivables and liabilities that decrease or increase the tax base (loss) arising from commercial transactions (PIT/WZ information).

Change in income settlement from pensions of minor children

From 2023, income from pensions earned by minor children will constitute the child’s income and will no longer be added to the parents’ income or reported in the parents’ annual tax return.

Modification of the heritage conservation allowance

From 2023, the possibility to use the heritage conservation allowance when purchasing a property – a heritage building registered in the heritage register – will be abolished (in 2022, it was possible to deduct from the tax base an amount equal to 500 PLN multiplied by the square meters of the purchased heritage property, but not more than 500,000 PLN).
Expenses related to conservation, restoration, or construction works on the heritage property may only be deducted after these works are completed, not during their execution. Additionally, only expenses covered by the permit from the provincial heritage conservator will qualify for deduction. Expenses exceeding this permit scope will not be deductible.

Increase in the percentage of tax payable allocated to public benefit organisations

From 1 January 2023, the amount a taxpayer can allocate in their tax return to public benefit organisations will increase from 1% to 1.5% of the due tax declared in the annual tax return (PIT).
The above list presents the key tax changes effective in 2023. For more information, please visit the government portal.

The Act on the Family Foundation, passed by the Sejm on 14 December 2022, is currently awaiting the President’s signature. The purpose of this new law is to protect family assets, minimise the consequences of unsuccessful succession, and guarantee the continuation of business activities in the form of a family foundation. The transfer of assets via instruments provided by the Act is intended to protect them from division, enable their growth, and thus allow benefits to be drawn from them, which can be used to cover the maintenance costs of persons designated by the founder. The primary function of the family foundation introduced by law is to meet the needs of the beneficiaries, who are generally family members.

Family foundation: what does the Act cover?

The Act on the family foundation regulates the organisation and functioning of the family foundation, including the rights and obligations of the founder and beneficiaries. It also introduces amendments relating to inheritance law (especially the right to a reserved portion) and rules concerning taxation connected with the establishment, operation, and dissolution of the family foundation.
The purpose of this new institution will be to fulfil goals defined by the founder, based on the assets transferred by them. This is meant to serve capital accumulation, which in turn increases the chances for undertaking investment activities. The founder is given flexibility to specify detailed objectives and outline the vision for the family foundation’s activities.

Only a natural person with full legal capacity may be a founder, transferring assets to the family foundation (either all or part of their estate, depending on their will). The family foundation may be established by more than one person, including unrelated individuals. Exceptions apply only in cases where the family foundation is established by testament (Polish inheritance law allows a will to be made by only one testator). The family foundation will provide specified benefits to the beneficiaries indicated by its founder. A beneficiary — i.e., a person deriving benefits according to the founder’s will — may be a natural person, a non-governmental organisation conducting public benefit activities, or the founder of the family foundation. The Act does not require a familial relationship between the founder and beneficiary. The foundation’s assets transferred by the founder will constitute the founding fund, whose value must not be less than PLN 100,000, both upon establishment and during the foundation’s operation.

In Poland, the family foundation will be able to receive donations. It is important to note that there is no risk connected with donations made by any persons, including donations from subsidiaries of the family foundation. A donor making a donation does not become a founder. This allows for the pooling of assets, especially in cases of co-ownership. Besides the founding document (the founding deed or testament), the statute will play a key role. It will regulate the most important aspects related to the operation of the family foundation and the bodies established within it. Additional organisational matters may be governed by internal regulations, depending on the wishes of the founder and members of the foundation’s bodies.

Family foundation: organisation

The governing body of the family foundation will be the management board. It will be responsible, among other things, for fulfilling the foundation’s objectives and taking actions to ensure financial liquidity and solvency. The supervisory board is an optional body, which becomes mandatory if the number of beneficiaries exceeds 25 persons. Members of the supervisory board must be natural persons with full legal capacity.
The Act also requires the establishment of a beneficiaries’ assembly, whose main purpose will be to ensure the continuity of the foundation’s other bodies and thereby proper functioning of the family foundation. Beneficiaries who simultaneously serve in the foundation’s bodies must comply with the statute and consider the founder’s will to the same extent as board members without beneficiary rights. Registration of the family foundation in the family foundations register will grant it legal personality. The founder will file the registration; if the foundation is established by testament, the management board will do so. The register will contain information about the family foundation that must be kept up to date by the management board.

The family foundation will bear joint and several liability for the founder’s obligations arising before the foundation’s establishment. It may also be liable for the founder’s maintenance obligations incurred before or after the foundation’s establishment if enforcement against the founder’s assets proves ineffective (subsidiary liability). Thus, the family foundation will be responsible for overdue, current, and future obligations of the founder towards persons entitled to maintenance. Claims of persons entitled to maintenance, whether beneficiaries or not, will be satisfied first. The foundation’s liability is limited to the value of the assets contributed by the founder.

The new law also provides mechanisms for the termination and liquidation of the family foundation, similar to those in company law. The foundation will be dissolved if the appropriate foundation bodies adopt a relevant resolution. In exceptional cases, the court may dissolve the foundation.

The Act confirms the possibility of renouncing the right to a reserved portion (in whole or in part), as well as options to defer payment, pay in instalments, or reduce the reserved portion, taking into account the personal and financial situation of the person entitled to the reserved portion and the person obligated to satisfy the claim. Furthermore, benefits received from the family foundation by an entitled person will reduce the value of the reserved portion, and the reserved portion received will reduce the value of future benefits payable by the foundation to that beneficiary.

Offer: Legal adviser – Tax law | Commercial law firm

Family foundation and taxes

Regarding taxation, the following aspects should be noted. Acquisition by natural persons of benefits or assets from the family foundation in connection with its dissolution will be subject to personal income tax, with rates depending on the degree of kinship between the beneficiary and the founder (exemption for the founder and close persons belonging to the so-called “zero group” defined in the Inheritance and Donations Tax Act — i.e., spouse, descendants, ascendants, stepchildren, siblings, stepfather and stepmother; 15% tax rate for others). Only the portion of benefits or assets acquired by the founder or persons in the “zero group” proportional to the founder’s current share listed in the asset inventory will be exempt from personal income tax. The family foundation itself will be liable for corporate income tax at 15% on benefits or assets transferred or made available directly or indirectly by the foundation in connection with its dissolution.
The VAT consequences of transactions and events connected with the introduction of the family foundation into the legal system will be determined in specific factual circumstances based on existing national VAT regulations, considering VAT Directive provisions and other EU laws. The Act does not introduce changes in this regard.

Additional information and the full text of the Act are available on the government website at the following link: Family Foundation – Ministry of Development and Technology – Gov.pl Portal (www.gov.pl)

From 1 January 2023, the law on due diligence obligations of enterprises in supply chains (German: Gesetz über die unternehmerischen Sorgfaltspflichten in Lieferketten – abbreviated as LkSG), enacted by the German parliament on 16 July 2021, came into force. Although it imposes obligations only on German enterprises meeting specific criteria, it will also affect Polish entrepreneurs engaged in trade with our western neighbour.

Who does the LkSG apply to?

Until 1 January 2024, the scope of the Supply Chain Act covers German enterprises employing 3,000 or more employees. After that date, the obligations will extend to those enterprises employing 1,000 or more employees. When determining the number of employees, persons employed by affiliated entities, whether in Germany or abroad, are also taken into account.
The aim of the LkSG is to compel large German enterprises to contract only with suppliers who respect international standards concerning human rights, labour rights, and environmental protection within their business activities. The law effectively shifts responsibility for the entire supply chain onto the German entity itself — regardless of how extensive the supply chain is or in which country it begins.

These aims are implemented through a series of additional duties, primarily including the obligation to implement systems for assessing risks of violations of human rights, labour rights, and environmental standards within the supply chain, systems for preventing such violations, appointment of responsible persons, and additional reporting duties to the Federal Office for Economic Affairs and Export Control.

What does the LkSG concern?

The law explicitly addresses a range of fundamental human rights, labour rights, and environmental and working condition standards, mainly contained in the International Labour Organization conventions, directly related to the topics at hand.
These include in particular:

1. The prohibition of child labour, combating their exploitation in forms such as slavery, forced prostitution, involvement in drug trafficking, and work that poses risks to their health and life;
2. The prohibition of forced labour, especially work performed under threat or within debt bondage;
3. The right to freedom of association and collective bargaining;
4. The right to fair remuneration;
5. The prohibition of discrimination in recruitment, employment, and promotion policies;
6. The right to safe and hygienic working conditions.

Impact of the LkSG on Polish exporters and manufacturers

These restrictions and duties **will also affect Polish entrepreneurs working with German contractors** — the LkSG explicitly requires German enterprises to take adequate preventive actions towards their direct contractors, including:

1. Considering the protection of the rights specified in the Act when selecting contractors;
2. Including declarations in contracts that the contractor complies with LkSG requirements concerning the protection of human rights, labour rights, and environmental principles;
3. Obligation to conduct training and additional vocational education related to the points above;
4. Inclusion in contracts with contractors of appropriate mechanisms ensuring compliance with the standards of human rights protection, labour rights, and environmental protection as required by the LkSG.

The above new obligations mean that German contractors will require their Polish partners to incorporate appropriate mechanisms in new contracts to mitigate risks related to potential penalties. The LkSG forms the basis for imposing fines of up to €500,000 or up to 2% of turnover in the case of legal entities or partnerships with an annual turnover of €400 million or more.

Legal services in German

A limited liability company (spółka z o.o.) is one of the most popular forms of conducting business activities in Poland. Entrepreneurs choose limited liability companies mainly because they limit personal liability for the company’s obligations. Even those who already run a sole proprietorship often consider converting it into a limited liability company. This is an especially optimal solution since the transformed company inherits all the rights and obligations of the transforming entrepreneur. Therefore, business activity can continue seamlessly without the need to liquidate the sole proprietorship or to assign or amend contracts concluded with existing clients.

What succession of the business entails and the entrepreneur’s liability

Commercial law stipulates that the transformed company becomes the entity entitled to, among other things, permits, concessions, and reliefs granted to the transforming entrepreneur, except in rare cases where the law or the decision granting a permit, concession, or relief excludes such transfer of rights. Meanwhile, the transforming entrepreneur becomes a shareholder of the transformed company.

The transformation itself does not release the sole proprietor from liabilities that transferred to the transformed company. The transforming entrepreneur is jointly and severally liable together with the transformed company for obligations incurred before the date of transformation, for a period of three years starting from the transformation date. Joint and several liability means that the creditor may pursue the debt, at their discretion, from either the transforming entrepreneur, the transformed company, or both. The limitation of liability, therefore, applies “prospectively,” meaning only the company is liable for debts incurred after the transformation. However, if the transforming entrepreneur also serves as a member of the management board of the transformed limited liability company, they are liable for the company’s obligations if enforcement against the company proves unsuccessful. The management board member may avoid this liability, for example, by timely filing for the company’s bankruptcy.

Upon transformation, the existing business name may be retained by adding only the designation “limited liability company” (spółka z ograniczoną odpowiedzialnością). Alternatively, the business name may be changed entirely. In the latter case, the transformed company must indicate the former name in parentheses alongside the new name, with the word “formerly,” for a minimum of one year from the date of transformation.

The procedure for transforming a sole proprietorship into a limited liability company consists of several stages:

1. Preparation of the transformation plan of the sole proprietorship along with annexes and an auditor’s opinion – the plan must be drawn up in the form of a notarial deed and must include at least the determination of the book value of the transforming entrepreneur’s assets as of a specified date in the month preceding the preparation of the plan. Annexes include drafts of: the entrepreneur’s transformation statement and the articles of association of the transformed company; the valuation of the transforming entrepreneur’s assets; and the financial statement for transformation purposes. The plan is subject to review by an auditor appointed by the relevant registration court. The auditor has up to two months from appointment to prepare their opinion. The registration court sets the remuneration for the auditor, which depends on the size of the transforming sole proprietorship.
2. Submission of the entrepreneur’s transformation statement – this statement must also be made in a notarial deed and should include, for example, the share capital of the limited liability company (minimum PLN 5,000) and the names of the company’s management board members (which may be one person).
3. Appointment of the organs of the transformed company.
4. Creation of the company’s articles of association – also in the form of a notarial deed.
5. Entry of the transformed company into the National Court Register (Krajowy Rejestr Sądowy, KRS) and deletion of the transforming entrepreneur from the Central Registration and Information on Business (CEIDG).

The transformation becomes effective upon registration in the National Court Register. In addition to these formalities, it is important to notify business partners of the transformation to ensure, for example, that invoices are issued to the limited liability company.

Transformation of the business and social security contributions (ZUS)

The status of a shareholder in a sole-member limited liability company constitutes a basis for social insurance. Therefore, the transforming entrepreneur should deregister from the previous insurance title related to the sole proprietorship and register for health insurance based on their status as a shareholder of the single-member limited liability company. These actions must be taken within 7 days from the date of registration of the company in the National Court Register. From the transformation date, the entrepreneur becomes the sole shareholder but may subsequently sell part of their shares. In such a case, shareholder status in the limited liability company does not constitute a basis for social insurance.

It is also important to remember the tax obligations arising from the transformation, such as paying the civil law transaction tax (PCC) of 0.5% of the company’s share capital, and the requirement to maintain full accounting records. After transformation, there may also be reporting obligations to the tax office, e.g., deregistering and registering as a VAT taxpayer or registering new fiscal cash registers.

Transformation without PIT

There had been doubts as to whether the transformation triggers a taxable income event for the transforming sole proprietor. On 25 October 2021, the Director of the National Tax Information issued a tax interpretation stating that transforming a sole proprietorship into a single-member capital company does not generate income subject to personal income tax (PIT). This is because the process constitutes a change of the legal form of the enterprise, with the same entity merely changing its legal structure, rather than two separate entities emerging. Consequently, for PIT purposes, transforming a sole proprietorship into a limited liability company is tax neutral, meaning no income tax is due.

Costs of transforming a sole proprietorship into a limited liability company

The costs involved in transforming a sole proprietorship into a limited liability company typically include the following expenses:

1. Remuneration for determining the book value of the company’s assets – the amount depends on the size of the assets;
2. Cost of preparing the transformation plan in the form of a notarial deed – the notarial fee is up to PLN 200 plus VAT;
3. Fee for the application to appoint an auditor by the registration court – PLN 300;
4. Remuneration for the auditor reviewing the transformation plan, which also depends on the size of the enterprise – the registration court sets the fee and approves expenses;
5. Cost of preparing the entrepreneur’s transformation statement in the form of a notarial deed – notarial fee up to PLN 200 plus VAT;
6. Cost of drafting the limited liability company’s articles of association in the form of a notarial deed – notarial fee depends on the company’s share capital;
7. Civil law transaction tax of 0.5% of the company’s share capital;
8. Fees related to registration of the company in the National Court Register: PLN 500 for the registration application and PLN 100 for publication in the Court and Economic Monitor.

The entire procedure takes about half a year. Note that the auditor has up to two months to issue their opinion on the transformation plan, and the registration in the National Court Register depends on the court’s workload.

Limited liability companies continue to gain popularity

Both in terms of protecting private assets by limiting liability for business obligations and reducing social security contributions (in cases of multiple shareholders), transforming a sole proprietorship into a limited liability company appears to be the most advantageous choice. This explains its growing popularity among Polish entrepreneurs. Given the complexity of the procedure and the formalities involved, it is advisable to seek professional legal advice before undertaking the process independently.

Sobriety Checks at Work 2023

Among numerous demands from employers and their organisations, for a long time one of the most important was the need to formally regulate sobriety checks for employees. In response to this issue, on 21 February an amendment to the Labour Code came into effect, regulating in which situations and how sobriety checks of employees employed by a given employer may be conducted.

According to the new provisions, an employer may introduce sobriety checks provided it is necessary to ensure the protection of the life and health of employees or other persons, as well as the protection of property. The sobriety test itself must not infringe on the personal rights of the employee, in particular their dignity.

The amended Labour Code, regarding the definition of the state after alcohol consumption and intoxication, refers to the Act on Upbringing in Sobriety and Counteracting Alcoholism. According to its Article 46, the state after alcohol consumption is recognised when the alcohol content in the body is or leads to 0.2 to 0.5 per mille. The state of intoxication is recognised when the alcohol content in the body is or leads to a blood alcohol concentration above 0.5 per mille or 0.25 mg of alcohol per 1 dm³ of exhaled air.

Sobriety Checks at Work: How to Introduce Them?

To legally conduct sobriety checks on employees, it is necessary to include specific provisions in the content of the collective labour agreement or work regulations. If the employer does not have a collective labour agreement or is not obliged to implement work regulations, these provisions must be included in a notice addressed to employees.

The aforementioned internal labour law acts must include:

1. Identification of employee groups subject to the sobriety control system;
2. Specification of the methods by which sobriety checks will be conducted, including:
   1. the type of device to be used for measurements;
   2. the timing and frequency of checks;

Furthermore, the introduction of the employee sobriety control system must be communicated to them in a manner customary for the given employer, e.g. via a mailing list announcement or by posting the notice on the notice board, at least two weeks before it comes into effect.

The employer is also obliged to prepare a protocol after each sobriety test of an employee, including not only the result but also the details of the person who conducted the test.

The control can similarly be introduced in relation to substances acting like alcohol, such as various narcotics and other psychoactive substances.

Breathalyser Testing at Work: New Employer Powers

The new provisions also grant the employer the right to refuse to allow an employee who is in a state after alcohol consumption or intoxication to work, as well as an employee who has not been tested but where there is justified suspicion that they reported to work under the influence of alcohol or substances with similar effects.

The employee must be informed of the reasons for being refused work. If the employee disputes the result of the test, it is possible for the test to be carried out by an authorised public order protection body – typically the police. If the test conducted by the officers is negative, the period of refusal to work is treated as a justified absence.

This is a fundamental change compared to the previous legal situation, where the obligation to refuse work to intoxicated persons was derived from the employer’s duty to ensure safe and hygienic working conditions.

Who Can Conduct Sobriety Checks?

The new regulations do not explicitly specify the need to authorise a particular category of employees to carry out sobriety checks at the workplace. However, it should be borne in mind that data concerning the concentration of alcohol in the blood or in the exhaled air of an employee constitutes special category data under GDPR. Therefore, the person conducting the measurement and preparing the protocol must be authorised to process such categories of personal data and must do so in accordance with the applicable data protection regulations and the employer’s data protection policy.

When Will Sobriety Checks by an Employer Be Illegal?

An employer will not be allowed to conduct sobriety checks at their establishment unless the mechanism for conducting such checks is regulated in the work regulations, collective labour agreement, or appropriate notice. Furthermore, not every method of conducting checks can serve as grounds, for example, for terminating the employment relationship with an intoxicated employee. According to the Regulation of the Minister of Health dated 16 February 2023, only breathalysers and blood tests based on methods specified in this regulation can be considered when taking further labour law actions. Moreover, a faulty protocol or improperly calibrated measuring device may render the test result invalid.

Possibility of Including Contractors in Sobriety Checks

Article 22^1h of the amended Labour Code also allows the use of sobriety check powers in relation to persons employed on a basis other than an employment contract. This solution will enable the employer to introduce universal sobriety testing of workers within an effective control system covering the entire establishment, including persons employed under civil law contracts such as contracts of mandate, or various forms of B2B contracts.

Although the possibility of introducing mandatory sobriety checks represents a unique opportunity to do so in full compliance with the law, it is necessary that it is conducted in a manner that takes into account the need to make appropriate changes in the employer’s internal regulations, using the procedures provided for by the new regulations, and that the results are documented with appropriate protocols. Ensuring proper documentation, especially regarding compliance with data protection law and labour law, is essential.

Remote work, so far introduced only through modest regulations of so-called anti-COVID rules and highly formalised telework provisions, will become a new, independent form of work under Polish labour law from 7 April 2023. The amendment will replace the now outdated form of telework. The new regulations will govern remote work much more strictly and impose numerous obligations on employers, primarily related to the necessity of maintaining documentation regarding the conditions of performing remote work and reimbursing costs incurred by employees.

Basis for Performing Remote Work

Remote work is defined by labour law. According to the new Article 67¹⁸ of the Labour Code, remote work may be performed fully or partially at a location indicated by the employee and agreed upon with the employer each time, including the employee’s place of residence, in particular by using means of direct remote communication. The provisions concerning remote work will have to be applied to employment relationships established on bases other than an employment contract, e.g., work based on appointment or nomination.
The basis for performing remote work, which simultaneously determines the rules of its performance, shall be:

1. An agreement concluded between the employer and the workplace trade union organisation, or, if more than one trade union operates at the employer, an agreement between the employer and those organisations or representative organisations.
2. A regulation established after consulting trade union organisations if within 30 days from presenting the draft agreement by the employer no agreement is reached with the aforementioned employee organisations.
3. A regulation established after consultation with employee representatives if no workplace trade unions operate at the given employer.
4. An order to perform remote work or an agreement concluded with the employee (depending on the mode of remote work performance), if no agreement with the workplace trade union organisation or regulation has been established.

Modes of Performing Remote Work

According to the amendment, remote work may be performed:

1. By agreement between the employer and the employee, which may be concluded upon the conclusion of the employment contract or during the course of employment (initiated by the employee or the employer).
2. By order of the employer (in strictly specified cases, i.e., during a state of emergency, epidemic threat, or epidemic, as well as within 3 months after their cancellation, or when ensuring safe and hygienic working conditions at the employee’s usual workplace is temporarily impossible due to force majeure).
3. At the request of privileged employee groups (e.g., pregnant women), which the employer is obliged to consider.

In the agreement with the workplace trade union organisation or the regulation, it is mandatory to include:

1. 1. The group or groups of employees eligible for remote work;
   2. The principles of employer’s reimbursement of costs related to remote work (including equivalents or lump sums, if applicable);
   3. The principles of communication between the employer and the employee performing remote work, including the method of confirming presence at the remote workplace;
   4. The rules of work performance control by the employee performing remote work;
   5. The rules of occupational health and safety control;
   6. The rules of compliance control concerning information security requirements, including personal data protection procedures;
   7. The rules for installation, inventory, maintenance, updating software, and servicing the work tools entrusted to the employee, including technical devices.

The order to perform remote work or an individual agreement with the employee must include the elements specified in points 2–7 above.

New Provisions Regarding Reimbursement of Costs Related to Remote Work

1. If the work is performed using materials and tools provided by the employer: The employer will be obliged to provide the employee with free installation, servicing, and maintenance of the tools necessary for remote work or cover the necessary costs related to their installation, servicing, operation, and maintenance. Additionally, the employer will have to cover the costs of electricity and telecommunication services necessary to perform remote work.
2. If the work is performed using materials and tools belonging to the employee: The employer will be obliged to pay the employee a monetary equivalent or a lump sum, the amount of which will be agreed with the employee and should correspond to the anticipated costs incurred by the employee in connection with remote work. When determining the amount of the equivalent or lump sum, consideration must be given to consumption norms of materials and tools, including technical devices, their documented market prices, quantity of material used for the employer’s needs, market prices of the material, as well as consumption norms of electricity and telecommunication services costs. Annual depreciation tables attached to tax laws may be particularly helpful. Due to applicable tax exemptions, thorough tax office audits concerning the amount and method of calculating the equivalent or lump sum are expected.

Regardless of the type of remote work, the employer may also cover other costs related to performing remote work, provided they are agreed with the employee or the workplace trade union organisation, in the order to perform remote work or in the regulation depending on the basis of remote work. The employer will always be obliged to provide the employee performing remote work with necessary training and technical assistance.

It is worth noting that both providing the employee performing remote work with materials and tools necessary for remote work and reimbursing costs incurred by the employee, including payment of a monetary equivalent or lump sum, do not constitute income within the meaning of the Personal Income Tax Act. This means that such income will not be included in the tax base nor social security contributions. It can be assumed that the link to remote work will be subject to a restrictive interpretation by the tax authorities and the Social Insurance Institution to limit abuses and attempts to avoid taxation of income from employment. Therefore, this concerns only costs directly related to remote work (though not necessarily limited to those listed in the Act).

Offer: Labour Law Lawyer

Remote Work and Health and Safety at Work: New Regulations

The employer will be obliged to ensure safe and hygienic working conditions to the remote worker within the scope resulting from the type of work performed, excluding provisions regulating cooperation between employers, providing first aid, condition and standard of rooms and facilities, providing preventive meals and drinks, as well as sanitary and hygienic devices and equipment. Initial health and safety training for employees hired for administrative and office positions may be conducted electronically.

1. 1. that are particularly dangerous;
   2. resulting in exceeding permissible physical factors norms set for residential premises;
   3. involving chemical factors posing hazards as per regulations on health and safety related to chemical factors at the workplace;
   4. related to the use or emission of harmful biological factors, radioactive substances, and other substances or mixtures emitting unpleasant odours;
   5. causing intense dirtiness.

The amendment also includes guidelines concerning the occupational risk assessment of employees performing remote work. The risk assessment should particularly consider the impact of remote work on vision, the musculoskeletal system, and psychosocial conditions of such work. Based on the results, the employer should prepare information containing:

A special type of remote work is regulated in Article 67³³ of the amended Act. This concerns so-called occasional remote work, or popular home office. It may be performed only upon the employee’s request submitted in paper or electronic form, for no more than 24 days in a calendar year. Some provisions applicable to “standard” remote work modes do not apply to it. Supervision of its performance, health and safety control, or compliance control regarding information security, including personal data protection procedures, is to be conducted only on terms agreed with the employee.
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Who Can Register a Trademark?

The registration of a trademark can be made by any natural or legal person. The purpose of a trademark is to distinguish the goods or services of an entrepreneur from those of competitors in the market. A trademark may consist of any signs, in particular words—including surnames—or drawings, letters, digits, colours, the shape of goods or their packaging, or sounds.

Why Is It Worth Registering a Trademark in the European Union?

Registering an EU trademark with the European Union Intellectual Property Office (commonly referred to as EUIPO) grants the owner exclusive rights to that trademark throughout the member states of the EU. In practice, this means the owner can, for example, prohibit any third parties from using the trademark for specified goods and services if such use could mislead consumers. The owner of a registered EU trademark can therefore block the placement of the trademark on goods or packaging by unauthorised entities or the use of the trademark in advertising by such parties.
Registering an EU trademark at EUIPO thus offers entrepreneurs the ability to block unauthorised use of the trademark by entities unlawfully benefiting from the reputation associated with that trademark on the market. This solution is especially attractive as it allows protection across all EU member states, rather than only nationally, as is the case with registration at the Polish Patent Office. This article describes an individual trademark, which serves to distinguish the goods and services of one specific enterprise from those of another. Such an individual trademark may be owned by more than one entity, meaning that more than one party can apply for it at EUIPO.

How to Register a Trademark?

So, how to register a trademark? First, you must check whether you meet the registration requirements. Consider whether the sign intended to be registered as a trademark allows the goods or services of the business to be distinguished from those of other enterprises. It is necessary to establish to which goods/services the trademark will apply. The list of goods/services should be as precise as possible. For this purpose, the Nice Classification divided into 45 classes is used. The selection of classes for the goods/services to be covered by the legal protection provided by the trademark registration affects the registration fees.
Submitting an application electronically facilitates searching the Nice Classification to determine the goods/services to be covered by the trademark protection. Properly specifying the list of goods/services is crucial because after submitting the trademark application, the list cannot be extended. On the other hand, an overly broad definition of goods/services may lead to other parties attempting to challenge the trademark by filing oppositions during the registration process or by requesting cancellation after the trademark is registered.

Therefore, it is advisable to use free online trademark search tools to check whether trademarks for specific goods/services are already registered — i.e., trademarks whose owners could challenge your trademark application because they previously filed an application for the same or a similar trademark for certain goods/services. Such search tools include, for example, eSearch plus and the TMview database.

It is also worth remembering that there are absolute grounds for refusing trademark registration. For example, trademarks cannot be purely descriptive, meaning they consist exclusively of references to: the kind, quality, quantity, purpose, value, geographical origin, or time of production of the goods or the provision of services, or other characteristics or properties. Therefore, you cannot register a word mark such as “coffee” or a word mark like “Podhale.”

It is possible to submit a trademark application to EUIPO using the Fast Track accelerated procedure, provided certain conditions are met, including upfront payment of the registration fee.

After submission, EUIPO examines the application for compliance with formal requirements and the absence of absolute grounds for refusal. If the examination is positive, the application is published, opening a period during which third parties may file oppositions within 3 months if they believe the trademark infringes their rights. Third parties can also submit observations indicating absolute grounds for refusal within this period. If no oppositions or observations are filed, or they are dismissed, the trademark is registered, and the registration is published. The owner of the registered EU trademark may receive a certificate of registration. The EU trademark registration lasts for 10 years from the filing date and can be renewed for further ten-year periods.

Although the EUIPO trademark registration procedure may not seem very complicated, it actually requires thorough analysis, particularly regarding the goods and services to be covered by the trademark and whether the registration infringes the rights of earlier trademark owners. This is all the more important because the application fee is non-refundable if the application is withdrawn or the registration is refused. Assistance in this area can be provided by a commercial law firm.

How Much Does It Cost to Register a Trademark?

Registering a trademark involves certain costs. When submitting a trademark application electronically, the fee for one class is €850. The application covering a second class entails an additional €50 fee, and for each subsequent class, the fee is €150.

Business development often forces entrepreneurs to change the legal form of their business activity. One of the most popular solutions is the transformation of the existing business or the establishment of a new limited liability company (spółka z o.o.). The main reasons for this are the limited liability of shareholders and the tax regulations introduced by the Polish Deal (Polski Ład). The formalised transformation process, as well as business considerations, often lead entrepreneurs to transfer their existing enterprise to the newly established company. This is done by contributing the enterprise or its organised part as a non-cash contribution (aport). What are the tax consequences of such a legal transaction? What exactly is an enterprise or its organised part? This article will explain the details.

What is a Contribution in Kind of an Enterprise?

What Does “Enterprise” or “Organised Part of an Enterprise” Mean?

The definition of an enterprise is relatively clear and does not usually cause interpretive problems. Pursuant to Article 55(1) of the Civil Code, an enterprise is an organised set of intangible and tangible components intended for conducting business activity.

It includes, in particular:

the designation identifying the enterprise or its separate parts (business name);

ownership of real estate or movable property, including equipment, materials, goods, and products, as well as other proprietary rights to real estate or movable property;

rights arising from lease or tenancy agreements of real estate or movable property and rights to use real estate or movable property arising from other legal relationships;

receivables, rights from securities, and cash;

concessions, licences, and permits;

patents and other industrial property rights;

proprietary copyrights and related proprietary rights;

trade secrets;

books and documents related to conducting business activity.

Thus, it corresponds to what is commonly called a “company” (though not to be confused with the legal term “firma” in the Civil Code, which means the entrepreneur’s business name).

Organised part of an enterprise, under tax law, means an organisationally and financially separated set of tangible and intangible components within an existing enterprise, including liabilities, intended to perform specific economic tasks, which could simultaneously constitute an independent enterprise capable of performing these tasks on its own. The key aspect is that the organised part of the enterprise must be capable of independent functioning, separate from the enterprise of which it is a part, demonstrated by financial and organisational separation.

Contribution in Kind of an Enterprise or Its Organised Part: Tax Consequences

VAT

The issue of VAT taxation on the contribution in kind of an enterprise or its organised part is relatively straightforward. Pursuant to Article 6(1)(1) of the VAT Act, “The provisions of this Act shall not apply to the transfer of an enterprise or an organised part of an enterprise,” which means that the aforementioned legal transaction is VAT-neutral. However, when contributing an organised part of an enterprise, it is important to ensure the definition is met, as tax authorities frequently challenge this during audits. If in doubt, it is advisable to seek advice from a legal tax adviser.

Corporate Income Tax (CIT)

The contribution of an enterprise or its organised part to a company does not trigger a corporate income tax liability for the company. Although under Article 12(1)(7) of the CIT Act revenue includes, among others, “the value of the contribution specified in the statute or company agreement, or, in their absence, the value specified in another document of a similar nature,” Article 12(4)(25) of the CIT Act excludes from revenue the value of a non-cash contribution when the contribution is an enterprise or its organised part to a company or cooperative. In other words, the contribution of an enterprise or an organised part to a company does not generate revenue for the company.

Personal Income Tax (PIT)

For the shareholder making the contribution, income arises equal to the nominal value of the shares received in exchange for the contribution of the enterprise or its organised part. However, pursuant to Article 21(1)(109) of the PIT Act, this income is exempt from personal income tax.

It should be noted, however, that to benefit from this exemption, the contribution of the enterprise to a capital company must be made for justified economic reasons. According to Article 12(14) of the CIT Act, if a merger, division of companies, exchange of shares, or contribution in kind (aport) is not conducted for justified economic reasons, it is presumed that the main or one of the main purposes of these actions is to avoid or evade taxation. The term “justified economic reasons” is not legally defined and is interpreted by tax authorities as meaning that the action cannot be artificial or aimed solely at obtaining tax benefits.

Civil Law Activities Tax (PCC)

The contribution of an enterprise as aport to a limited liability company is generally subject to the civil law activities tax as a change to the company agreement. The tax base is the value of the share capital or the amount by which the capital is increased. The tax rate is 0.5% (Article 6(1)(8)(a) in conjunction with Article 7(1)(9) of the PCC Act). From the tax base, one may deduct notary fees (including VAT), court fees for registration in the National Court Register (KRS), and the fee for publication of the entry in the Court and Commercial Gazette (Monitor Sądowy i Gospodarczy). It is important to note that the tax liability rests with the company, not the shareholder making the contribution.

The PCC declaration (form PCC-3) must be submitted and the tax paid within 14 days from the date the tax obligation arises, i.e., from the date of the contribution.

In summary, when contributing an enterprise or its organised part to a company, entrepreneurs should expect to pay only the civil law activities tax. They benefit from numerous tax exemptions and exclusions under VAT and income taxes. However, it is always essential to verify that the contributed object actually meets the definition of an enterprise or an organised part of an enterprise, and in case of doubts to seek professional legal adviser assistance.

On 21 March, the President signed the Act of 9 March 2023 amending the Labour Code and certain other laws (Bill No. 2932), implementing the provisions of the Directive of the European Parliament and of the Council (EU) 2019/1158 of 20 June 2019 on work-life balance for parents and carers and repealing Council Directive 2010/18/EU (OJ EU L No 188, p. 79). The changes in labour law extend parental leave and introduce an individual right to leave for each parent (non-transferable to the other parent).

Extended Parental Leave Periods

According to the amended Article 182(1a) of the Labour Code, parents of a child will be entitled to parental leave to care for the child for up to:

41 weeks – in the case of the birth of one child at a single birth;

43 weeks – in the case of multiple births.

Furthermore, parents of a child holding a certificate confirming a severe and irreversible disability or incurable life-threatening illness, which arose during the prenatal development period or at the time of birth, will be entitled to parental leave to care for the child for up to:

65 weeks – in the case of the birth of one child at a single birth;

67 weeks – in the case of multiple births.

According to the justification of the draft, the proposed changes aim to implement Article 5 of Directive 2019/1158, according to which Member States shall introduce the necessary measures to ensure that every employee has an individual right to parental leave of four months to be taken before the child reaches a certain age, up to a maximum of eight years, to be specified by individual Member States or collective agreements. Moreover, in line with recital 24 of Directive 2019/1158, the period during which employees are entitled to parental leave should be linked to the child’s age. This age should be determined so as to enable both parents to effectively use the full parental leave entitlement granted to them under Directive 2019/1158.

Offer: Legal Adviser: Labour Law and Social Security Matters

Non-Transferable Part of the Leave

Unlike previous regulations, each employee-parent will have an exclusive right to 9 weeks of parental leave from the total parental leave entitlement stated above. This means, for example, that if the mother uses the entire parental leave, the father still retains the right to 9 weeks’ leave. The right to the 9-week leave cannot be transferred to the other parent (it will be a non-transferable part of the leave). At the same time, the new regulations specify that taking at least 9 weeks of parental leave by an employee-parent means the use of the non-transferable part of the leave.

As stated in the draft’s justification, this change is motivated by recital 20 of Directive 2019/1158, which notes that since most fathers do not use parental leave or transfer a significant part of their leave rights to mothers, in order to encourage fathers to take parental leave while preserving the right of each parent to at least four months of parental leave as provided in Directive 2010/18/EU, this Directive extends the minimum non-transferable period of parental leave from one to two months. The aim of ensuring that at least two months of parental leave are available exclusively to each parent and cannot be transferred to the other parent is to encourage fathers to exercise their entitlement to such leave. This solution also promotes and facilitates mothers’ return to the labour market after maternity and parental leave.

The described changes come into force 21 days after the publication of the Act.

On 26 April, the largest amendment to the Labour Code this year, alongside remote work regulations, came into force, introducing numerous new obligations for employers and rights for employees. The most significant changes in the Labour Code concern the content and rules for terminating employment contracts, new and extended leave and time off work, as well as rights for employee-parents. The Act implements into the Polish legal system the EU regulations — namely the Directive of the European Parliament and of the Council (EU) dated 20 June 2019 on transparent and predictable working conditions in the European Union, and the Directive of the European Parliament and of the Council (EU) dated 20 June 2019 on work-life balance for parents and carers. This article outlines the key changes.

Changes in the Labour Code from April 2023

New Rights for Employee-Parents

• Increase in the total amount of leave for both parents,
• Introduction of exclusive parental leave for each parent,
• Change in the amount of maternity benefit paid when applying for the “long” maternity leave,
• Introduction of a new type of leave — care leave,
• Raising the age of the child for which carers have additional parental rights, as well as expanding these rights (including exemption from working overtime or night shifts without the employee’s consent).

Changes in Employment Contracts

• Introduction of new mandatory provisions to employment contracts, including fixed-term and probationary contracts,
• Introduction of a new catalogue of employment information that employers must provide within a Labour Code–specified timeframe after admitting the employee to work,
• Changes in the rules for concluding, terminating and extending employment contracts, especially fixed-term and probationary contracts,
• Guaranteeing employees the right to request a change to a more favourable type of employment contract,
• Introduction of an information obligation regarding vacancies, positions and promotion opportunities for employed staff.

Changes in Work Organisation

• Introduction of the possibility to take time off work due to force majeure,
• Definition of flexible work organisation and a list of employees entitled to request its application,
• Regulation of employee training in terms of payment, scheduling, and inclusion in working time,
• Regulation of simultaneous employment of an employee by another employer (with exceptions).

Labour Code Amendment 2023: Other Changes

• Regulation of transitional provisions for ongoing employment relationships,
• Changes to employer obligations regarding employees seconded within and outside the EU,
• New regulations concerning work breaks.

ATL Law lawyers provide employers with comprehensive legal assistance in all areas relating to human resources management and labour law. If you are interested in details concerning new employer obligations, the ATL LAW team is ready to assist both in preparing a study covering all significant changes introduced by the amendment and in drafting document templates (including contracts, contract annexes, and information on employment conditions) reflecting the new regulations. We invite you to contact us.

Also read: Workplace Monitoring Regulations