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Poland

2. Bilateral Investment Agreements and Taxation Treaties

Poland has concluded bilateral investment agreements with the following countries: Albania (1993); Argentina (1992); Australia (1992); Azerbaijan (1999); Bangladesh (1999); Belarus (1993); Canada (1990); Chile (2000); China (1989); Egypt (1998); India (1997 – terminated in March 2017;   a 15 year sunset clause applies); Indonesia (1993); Iran (2001; although Poland supports international sanctions regimes); Israel (1992); Jordan; Kazakhstan (1995); Kuwait (1993); Macedonia (1997); Malaysia (1994); Moldova (1995); Mongolia (1996); Morocco (1995); Norway (1990); Serbia and Montenegro (1997); Singapore (1993); Slovakia (1996 termination under consultations); South Korea (1990); Switzerland (1990); Thailand (1993); Tunisia (1993); Turkey (1994); Ukraine (1993); United Arab Emirates (1994); the United States (1994); Uruguay (1994); Uzbekistan (1995); Vietnam (1994).

In May 2020, all EU-member states, except Sweden and Finland, signed an agreement of termination of intra-BITs concluded by the member states. This will terminate Poland’s final BIT, which is with Slovakia.  Sweden and Finland will sign bilateral agreements with Poland terminating the “sunset clauses.” in their existing BITs.  During the notice period, as stipulated in most of the intra-EU BITs, all the obligations assumed by Poland remain in force.  Moreover, most of the intra-EU BITs contain sunset clauses that prolong the treaty protections.

The United States and Poland signed a Treaty Concerning Business and Economic Relations in 1990 that was amended and re-ratified in October 2004 due to Poland’s entrance into the EU.  A current list of all Poland’s BITs, including the documents themselves, can be found at: http://investmentpolicyhub.unctad.org/IIA/CountryBits/168#iiaInnerMenu 

Poland has signed double taxation treaties with over 80 countries.  The United States shares a double taxation treaty with Poland; an updated bilateral tax treaty was signed in February 2013 and is awaiting U.S. ratification.  The “Agreement between the United States of America and the Republic of Poland on Social Security” prevents double taxation, enables resumption of payments to suspended beneficiaries, and allows transfer of benefit eligibility.

The Polish tax system underwent significant changes in 2018, many of which became effective in 2019 or will become effective in 2020.

In 2019, the most important changes involved:

  • An obligatory split payment mechanism;
  • A “White List” of VAT taxpayers (along with their VAT numbers and bank account details) and tax-deductible costs;
  • Relief from income taxes for bad debts;
  • Major changes to the processes for “withholding tax” (postponed until 1 July 2020);
  • A new matrix of VAT rates;
  • The replacement of VAT returns with a new Uniform Control File (JPK) structure;
  • An agreement on cooperation in tax matters;
  • Incentives for registering intellectual property, a.k.a. “IP Box” (See Section 5 for more details); and
  • New rules for accounting for tax loss.

More information can be found at http://taxsummaries.pwc.com/ID/Poland-Overview 

Some U.S. investors have expressed concern that Poland’s tax authorities do not always consistently uphold presumably binding tax decisions and sometimes seek retroactive payments after a reversal.  In 2019, tax offices carried out nearly one-fifth fewer audits than in 2018. Irregularities were found more often, but the amount recovered to the budget was lower.  This trend has been observed for a few years and shows that the tax system is being effectively sealed and taxpayers are more accurately selected for audits. The double taxation treaty does not cover stock options as part of remuneration packages, according to some investors.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or International Source of Data:  BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount  
Host Country Gross Domestic Product (GDP) ($M USD) 2018 $589,800 2018 $585,700 www.worldbank.org/en/country 
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:  BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2018 $4,822 2018 $12,977 BEA data available at https://www.bea.gov/international/
direct-investment-and-multinational-enterprises-comprehensive-data
 
Host country’s FDI in the United States ($M USD, stock positions) 2018 $747 2018 $N/A ** BEA data available at https://www.bea.gov/international/
direct-investment-and-multinational-enterprises-comprehensive-data
 
Total inbound stock of FDI as % host GDP 2018 37.3% 2018 39.6% UNCTAD data available at
https://unctad.org/en/Pages/DIAE/
World%20Investment%20Report/
Country-Fact-Sheets.aspx
 

* In Poland, the National Bank of Poland (NBP) collects data on FDI.  An annual FDI report and data are published at the end of the following year.  GDP data are published by the Central Statistical Office.  Final annual data are available at the end of May of the following year.

Table 3: Sources and Destination of FDI
Direct Investment from/in Counterpart Economy Data (end of 2018)
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 228,522 100% Total Outward 24,595 100%
The Netherlands 48,771 21% Luxembourg 7,490 30%
Germany 39,880 17% Czech Republic 2,767 11%
Luxemburg 32,459 14% The Netherlands 2,519 10%
France 20,725 9% Hungary 1,821 7%
Spain 10,849 5% Germany 1,611 6.5%
“0” reflects amounts rounded to +/- USD 500,000.

Results of table are consistent with the data of the National Bank of Poland (NBP).  NBP publishes FDI data in October/November.
A number of foreign countries register businesses in the Netherlands, Luxemburg and Cyprus, hence results for these countries include investments from other countries/economies.

Table 4: Sources of Portfolio Investment
Portfolio Investment Assets (end of June 2019)
Top Five Partners (Millions, current US Dollars)
Total Equity Securities Total Debt Securities
All Countries 37,087 100% All Countries 21,066 100% All Countries 16,021 100%
Luxemburg 5,497 15% Luxemburg 4,573 22% Int’l Orgs 4,352 27%
Int’l Orgs 4,352 12% Ireland 909 4% Czech Rep. 1,471 9%
Czech Rep. 1,889 5% Germany 745 4% Sweden 928 6%
France 1,271 3% Hungary 554 3% Luxemburg 923 6%
Hungary 1,112 3% Austria 549 3% France 758 5%

Note: NBP publishes only total amounts of portfolio investment assets.
Results of the table are consistent with data from the National Bank of Poland (NBP). NBP publishes FDI data in October/November.
A number of foreign countries register businesses in the Netherlands, Luxemburg and Cyprus hence results for these countries include investments from other countries/economies.

Investment Climate Statements
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