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Financial Transaction Tax Bill

Tax Alert 18/2015

6 November 2015

Prawo i Sprawiedliwość has published a financial transaction tax bill at its website. The draft assumes introducing a new tax type - financial transaction tax (FTT) - as of 1 January 2016. The bill is dated 15 September 2015, but has not been presented in the Sejm yet.

Application of the new tax regulations

The new act will generally apply to financial institutions. In accordance with its provisions, a financial institution is any entity whose 50% or more revenue is generated from financial transactions.

Territorial coverage

The bill states that a financial transaction will be taxable if at least one party thereto has its office within the territory of the Republic of Poland or if the instrument is issued within the territory of the Republic of Poland.

Subject of the tax

In accordance with the bill, the following transactions will be taxable:
1) purchase and sale of financial instruments for a fee;
2) financial instrument exchange;
3) repo and sell-buy-back transactions;
4) lending and borrowing securities;
5) entering into contracts resulting in or related to derivative instruments.

Tax base

Under the bill, the liability amount due to sale or purchase of financial instruments or the face value of these instruments will constitute the tax base.

Tax rate

The financial transaction tax rate is 0.14 % of the tax base (and 0.07% for transactions including derivative instruments).

As the bill has only reached the pre-legislation stage, its final wording may be different. We will monitor legislative works concerning the new tax and we will keep you updated on the proposed regulations.

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