Apple could face new taxes in Poland under proposed digital services law

Poland is reportedly moving forward with a proposal to tax certain income from digital services at up to 3%, which could hit companies like Apple. Here are the details.

A new tax proposal could apply to multiple Apple services

Last year, Poland’s Ministry of Digital Affairs proposed a new law that would tax revenue generated by certain digital services in the country.

As Reuters reported at that timeThe measure was harshly criticized by the United States ambassador to Poland, Tom Rose, who referred to it in a publication on X as “a self-destructive tax that will only harm Poland and its relations with the United States.”

Now, also according to ReutersThe country has signaled that it will begin work on the bill, “preparing for a possible clash with its key ally, the United States.”

According to the draftIncome from certain digital services provided in Poland would be taxed at up to 3%, in what Poland’s Deputy Prime Minister and Minister of Digital Affairs Krzysztof Gawkowski described as an effort to create a more level playing field between domestic and foreign companies:

“Today, competition in the digital market in Poland is distorted. Companies that pay taxes for their activities in Poland are in a worse position than those that provide digital services within our country from abroad. This reduces the competitiveness of national entities, limits our digital sovereignty and significantly reduces state budget revenues that could be reinvested in building the technological potential of our country. The economy is increasingly shifting towards the digital sphere, and over time these inequalities will only deepen.”

As is often the case with proposals like this, the bill uses broad language that leaves room for interpretation about what exactly would be included in it.

From the bill:

The project proposes to introduce a compensatory tax on services provided within the territory of the Republic of Poland consisting of:

• Placing targeted advertising on a digital interface directed at users of that interface;
• Provide users with a multilateral digital interface that allows them to interact with other users or can facilitate the underlying supply of goods or the provision of services directly between users;
• Transfer, through sale, license or other paid means, data collected about users, both individually and as part of data packages, generated as a result of user activity on digital interfaces.

The draft also outlines several exemptions, stating that the tax would not apply to:

• Provide users with a digital interface whose sole or primary purpose is to deliver digital content owned by the provider or for which it has acquired distribution rights, or to provide communication or payment services to users;
• Sell ​​goods or services online through the supplier’s own website, where the supplier does not act as an intermediary;
• Provision of regulated financial services by entities subject to supervision under Article 1(2) of the Law of 21 July 2006 on the Supervision of Financial Markets;
• Provide, through a trading venue or a systematic internalizer, any of the services listed in Section A, points 1 to 9, of Annex I to Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments, as well as amending Directive 2002/92/EC and Directive 2011/61/EU;
• Provision, by a regulated crowdfunding service provider, of any of the services listed in Section A, points 1 to 9, of Annex I to Directive 2014/65/EU or services consisting of facilitating the granting of loans.

So again, as the text comes out plenty With no room for interpretation, the language suggests that services like the App Store, Apple TV, Apple Music, Apple Books, Apple Podcasts and Apple’s growing advertising business could fall under the new law.

At the same time, the exemptions are also broad enough that Apple can argue that some of its services fall outside the scope of the tax.

Finally, while Apple is far from the only company that would likely be affected by the law, there are some requirements that would limit its reach. If approved, it will only apply to companies with more than 1 billion euros (approximately $1.16 billion) in global revenue and more than 25 million zlotys (approximately $6.8 million) in domestic revenue in the previous reporting period.

Apple has yet to comment on the bill.

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