In terms of complexity of the tax system, Poland currently occupies 47th place, which means an increase of 11 positions compared to last year’s ranking – according to the latest report “Pay taxes 2017», prepared by the consulting firm PwC and the World Bank.

271 hours to meet tax requirements

In Tuesday’s announcement dedicated to the report, it was written that on average, a Polish entrepreneur currently pays seven taxes per year, spending 271 hours per year to meet all tax requirements (both indicators are the same as the last year). While total tax rate in our country it is 40.4 percent. (in last year’s study this indicator was 40.3%).

According to the authors of the report, against the background of data for all countries of the European Union Poland its results are relatively good in terms of number of annual payments (the average for EU and EFTA is 11.8) and total tax rate (in EU and EFTA 40.3%) . However, the comparison of the number of hours spent on tax matters is much lower: the average for EU and EFTA countries is 164 hours.

“The results of this year’s +Paying Taxes+ study confirm that Polish tax system gradually evolves for the better. Just two years ago, we were 87th in the rankings of all countries studied. We owe the promotion, among other things, to: consistently implemented e-government program. However, there is still a lot to be done, in particular: in terms of sustainability and the consequences of tax law, which is seen for example in the still high number of hours that entrepreneurs dedicate to payment”, says Tomasz Barańczyk, partner at PwC, cited in the press release.

According to the report, the average time needed to meet requirements in the EU and EFTA region is 164 hours, which is 87 hours less than the global average (251 hours); it is also the lowest of all regions except the Middle East (157 hours). In only 32 countries, the time taken to meet requirements is longer than the global average.

It was noted that due to the widespread use of electronic document submission and payment systems, the region’s payment rate of 11.8 is the lowest among all regions, except of North America. “However, the EU and EFTA region is the only one where the number of payments has increased due to the introduction of a tax for which documents cannot be submitted or paid electronically,” we noted.

According to the announcement, in 2015, the total tax rate decreased by 0.4 percentage points, the compliance time was reduced by 3 hours, and the number of payments increased by 0.3. Progress in electronic filing and payment reforms, mainly in Portugal, Italy and Latvia, is leading to further reductions in compliance times.

The report’s authors note that reforms were carried out in 21 countries in the region and resulted in a reduction in the total tax rate. “The changes were small and affected the entire spectrum of taxes: income, employment and others. The picture is mixed, since in 11 economies the total tax rate was reduced and in 10 it increased “, adds the text.

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Where are taxes falling and where are they increasing the fastest?

The largest drop in the total tax rate occurred in San Marino, by 5.1 percentage points to 35.4 percent, with the sample company benefiting from the new lower corporate tax rate imposed to new companies. The largest increase in the total tax rate occurred in Malta, by 2.4 percentage points to 43.8%, due to the replacement of the capital gains tax with a tax on real estate changes.

“In 2015, employment taxes and mandatory employer social security contributions still accounted for the largest share of the region’s average total tax rate (65%) and required the longest time to comply (46%), but only represent 25% of the number of taxes. payments” – it was written.

He added that the average time to fulfill the conditions for a VAT refund request in the region is 7.1 hours, and it takes on average 14.8 weeks to obtain a VAT refund. In Croatia, Germany, Latvia, the Netherlands, Spain and Malta, VAT refund does not require additional time since the request is submitted on a standard VAT return.

The “Paying Taxes” report is published for the eleventh time. It provides a calculation of all taxes and mandatory contributions that a medium-sized business must pay in a given year, and measures the administrative burden of filing and paying taxes, as well as the procedures that take place after filing the declaration.

Taxes and contributions included in the report include income tax (i.e. corporate tax), social security contributions and payroll taxes paid by the employer, property taxes, taxes on civil law transactions, tax on dividends, tax on capital profits, tax on financial transactions, waste. disposal taxes, vehicle and road taxes, and other minor taxes and fees.

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