| In Principle

When is the investor required to pay for the performance of work? How do identified defects relate to this obligation, and when can handover be refused? These questions cause many difficulties in practice and are the basis for numerous, often very complex and long-running disputes. Recently, this issue was addressed by the Supreme Court of Poland. The interpretive direction it affirmed may help market players, including construction contractors, to whom these findings may apply by analogy.

On 21 December 2021, the Court of Justice of the European Union issued a long-awaited judgment on the interpretation of the EU Blocking Statute in C-124/20, Bank Melli. Although the ruling does not dispel all doubts, it does set the direction for interpretation and shows that even imperfect regulations must be applied.

Magdalena Świtajska and Aleksandra Wójcik form Wardyński & Partners’ Employment & Global Mobility Practice, explain the ways of obtaining Polish citizenship.

The Polish Deal introduces several solutions for Polish capital market participants, including corporate income tax changes for companies preparing to debut on the stock exchange. This amendment came into force on 1 January 2022.

One of this year’s tax amendments that may affect Polish capital market participants is the income tax exemption for taxpayers investing in IPOs of companies entering the Warsaw Stock Exchange. Under certain conditions, they will be exempt from capital gains tax.

On 21 December 2021, the European Court of Human Rights issued a judgment in Stołkowski v Poland (application no. 58795/15) holding that Poland had violated the applicant’s property rights. The case involved the long impoundment of the applicant’s car as security in a criminal case pending against him, which resulted in decimation of the vehicle’s value. Relying on principles of property rights, the court decided when impoundment of a car may be disproportionate, despite the existing public interest and legal basis for application of such a measure.

On 9 December 2021, the Supreme Court of Poland issued a resolution (case no. III CZP 26/21) examining liquidated damages in construction contracts. In construction, liquidated damages are particularly common, generating serious disputes even threatening the completion of projects. In practice, this instrument is mainly used by investors, and the problem usually affects general contractors and subcontractors.

According to the Conversion Act, existing perpetual usufructuaries acquire ownership of real property if conditions set forth in the act are met. What are these conditions, and is perpetual usufruct of land converted into ownership of the land if the building on the land is subsequently designated for residential purposes?

A limited-liability company is represented by its management board. The right of the management board to represent the company covers all actions, including entering into contracts, court actions, making declarations, accepting declarations, etc. It cannot be restricted. However, the management board cannot represent the company in its dealings with a member of the management board.

Many investors and their lawyers consider property restitution, or as we call it in Poland, reprivatisation, to be a purely historical phenomenon. The aim of this article is to analyse if it is true and whether restitution claims are completely irrelevant to real estate investments in Poland.

Transfer pricing is one of the focal points of taxation in Poland. The arm’s-length principle underlying transfer pricing requires related parties to provide products, services or loans to each other on terms that would have been agreed upon between independent parties. When they follow the arm’s-length principle, taxable profits recorded by each party will not be distorted by their membership in the same capital group. The arm’s-length principle must not only be followed, but also be clearly seen to be followed and this comes at the cost of compliance efforts. In this respect, three issues will be analysed below: basic compliance obligations, selected peculiarities of Polish regulations, and transfer pricing documentation for a group of companies.

Thanks to bankruptcy proceedings creditors do not have to fight with each other over the debtor's assets in order to carry out individual enforcements. The order of satisfaction of claims prescribed by law means that the claims of the weakest creditors, i.e. employees, are paid first. Subsequently, the claims of contractors and the tax office are repaid. Only at the end are the claims of the shareholders paid off.