Poland’s Left party, which is part of the centre-left government led by Prime Minister Donald Tusk, is proposing legislation to make Big Tech firms pay a new tax to generate revenue for the state.
The deputy Prime Minister and digital affairs minister Krzysztof Gawkowski who is a Left MP, yesterday announced a draft tax bill was ready for consideration by the government.
The legislation will be opposed by the US and is likely to be vetoed by the Polish President Karol Nawrocki.
Gawkowski claims the measure he is proposing is similar to a digital services tax introduced by France in 2019. He said it would create a “level playing field”, bringing “billions of Polish zloty” in extra annual tax revenue for the state.
“Global corporations often pay less in taxes than local companies; it’s time to end this,” he said and promised that the extra revenue would be invested in areas such as AI and cybersecurity.
The deputy PM explained that the measure would introduce a three per cent tax on income generated from some digital services in Poland, such as online advertising, interfaces that allow users to interact through messaging and commenting, as well as the selling of user data for marketing purposes.
The proposed tax would only cover companies that generate annual global revenue of more than €1 billion and revenue in Poland of more than €5 million, irrespective of their tax residence or the location of their headquarters.
In reality that means it would apply mainly to US and Chinese tech giants rather than companies which publish their own content online such as news websites.
Financial services and the sales of goods or services by suppliers directly would also be exempt from the digital tax.
The introduction of a digital tax is anathema to the US whose President Donald Trump has said that his country would apply retaliatory tariffs and sanctions on countries that introduce a tax that hits US companies.
The US last year called a digital tax “a suicidal tax” and a “not very smart move” that would only “damage Poland and its relations with the US”.
The Left Party is a junior partner in Tusk’s ruling coalition. It has recently clashed with the US ambassador to Poland Tom Rose when the Speaker of Parliament Włodzimierz Czarzasty said he would not back a call for the Polish legislature to support Trump’s quest for the Nobel Peace Prize.
Czarzasty, who is a former member of the Communist party that ruled Poland during the country’s subjugation to the USSR (1944-1989), said Trump did not deserve the Nobel Peace Prize and that under his rule the US was no longer an ally which could be trusted.
Commentators point to the Left Party’s willingness to attack the Trump administration to differentiate themselves from the larger Civic Coalition (KO), which is more circumspect about getting into disputes with the US.
Last year, the finance minister Andrzej Domański said there was little chance of the digital tax being introduced because any such measure would likely face a veto from the opposition Conservatives (PiS)-aligned Nawrocki.
He is a close ally of Trump who has made the maintenance of good relations with the US one of his top political priorities.
PiS in the past, though, has said it was willing to entertain a digital tax as a means of supplementing Poland’s state budget, although of late it has reverted to saying that any such measure should take into account the country’s transatlantic interests at a particularly sensitive time for Polish security.
During his presidential campaign last year, Nawrocki pledged to oppose all new taxes on citizens but he has signed into law a new tax on banks, arguing that most banks are foreign entities that generate considerable profits in Poland.
