Polish finance minister launches tax battle with Airbnb

Newsletter: Europe Express

Poland’s new finance minister wants US home rental site Airbnb to pay taxes on income it earns in the central European country, in the latest intervention by a senior EU politician in the debate over the taxation of digital companies.

Tadeusz Koscinski said he is seeking to ensure that Poles who rent their apartments through sites such as Airbnb pay applicable taxes, and that collecting data on this would give authorities insight into how much groups such as Airbnb were gaining in the country.

“If we’re going to make sure that everyone who rents their apartment in the sharing economy pays their fair share of taxes, then so do the people they pay – Airbnb is part of the value chain – they should be paying. also, ”he said in an interview in London, adding that Airbnb should“ settle ”in Poland.

He added: “Otherwise, they distort the markets. Companies based in Poland pay taxes and therefore their margins are lower. It is therefore an unfair practice. I’m not here to kill them or milk them, just to make sure they don’t disrupt the markets.

The issue of taxing digital businesses, which often have head offices or legal entities in one country but operate across borders, has become an increasingly controversial topic on both sides of the Atlantic. After an effort to agree on a common European approach failed last year, France presented plans for its own digital tax, sparking a bitter row with the United States, which has threatened retaliation of rights. customs on products such as champagne.

Poland had also considered its own larger digital tax, but after intense lobbying from the United States – the headquarters of many of the world’s largest digital companies – the government of Mateusz Morawiecki chose to wait for the outcome of the negotiations at the OECD on an international approach. to digital taxation.

Mr Koscinski, a former banker and close ally of Mr Morawiecki, said Poland would continue to participate in the OECD discussions but would have to “rethink” if the deliberations were too slow or if their outcome was not achievable for the country. Poland.

He added that he was not in favor of the idea of ​​a “one size fits all” tax for digital groups. “Some digital businesses have 60% margins and some have 6% margins, and if you start imposing the same sales tax, you will crucify some of them, and we don’t want to crucify companies,” did he declare.

“I would much rather sit down with Airbnb, Google and Amazon and everybody and say, ‘you know you have to pay taxes in Poland or else there will be no roads, no police, no schools. It is obvious that you have to pay taxes: how much are you willing to pay? “

A spokesperson for Airbnb, which operates across the EU through its hub in Ireland, and is expected to launch an IPO later this year, said: “We follow the rules and pay all the taxes we owe in where we do business; this is true to the extent that the rules apply today and will remain so for any rules that apply in the future. He added that the Polish tax authorities were already receiving VAT payments “on the fees charged to Polish hosts and guests”.

Mr Koscinski, an English speaker who previously worked in the ministries of development, entrepreneurship and technology, became finance minister in November after the re-election of the ruling Law and Justice party, taking the helm of an economy which has not experienced a recession for almost three decades.

Over the past year, however, the international environment has deteriorated, with a trade war flaring up between the United States and China, and with the German economy – Poland’s main export market – starting. to stutter.

However, Mr Koscinski said he remains optimistic about Poland’s economic outlook and downplayed the idea that the German slowdown could have a ripple effect on Poland, which has deep economic ties to its western neighbor. .

“I don’t think the German slowdown will be as bad as some think,” he said, noting that tensions between the United States and China appeared to have eased slightly, which would ease the pressure on the export machine from Germany.

“But I think the most important thing is to say that the Polish economy is still growing and will remain one of the world’s best performing economies in the future. Consumption continues to increase. And I think the most important rising star will be exports [and] enter new markets.

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