| In Principle

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.

On 7 December 2021, the Polish government officially announced its Polish Hydrogen Strategy for 2030 with a view to 2040. The announcement came at a perfect time, amid price turbulence on the natural gas market in Europe and growing doubts whether natural gas (of which Europe has too little) is still a reasonable transition fuel for decarbonisation of the economy.

In housing communities, the individual parts of common areas (e.g. parking spots, terraces or gardens) are intended for common use by all owners of premises. Often, to avoid problems with use of such areas, division and use of common areas is established at the stage of acquisition of housing units from the developer. This is known as quoad usum division. Can it be changed if circumstances change?

In 2012, a restrictive ban on advertising by pharmacies was introduced into Polish law. According to Art. 94a of the Pharmaceutical Law, it is only permissible to provide information on the location and working hours of a pharmacy or a pharmacy outlet. Violation of the ban can draw a heavy fine, up to PLN 50,000. In practice, the advertising ban is strictly enforced by the province pharmaceutical inspectors, which results in numerous administrative fines imposed on businesses.

The proposed changes in healthcare in Poland would not only impose new obligations of healthcare providers, but also seek to raise the quality and safety of medical services. Periodic external audits and mandatory reporting of adverse events are to be introduced. This represents an organisational change, but also a cultural one. Every hospital employee would have to be aware of their responsibility towards patients, and all processes would be designed to focus on the patient. The idea of a patient-centred system has been discussed in Poland many times, but not even a uniform definition or principles for such an approach have been adopted to date. It is worth taking a look at how others are doing it.