Anna Smagowicz-Tokarz

Attorney at law (Poland)
Associate Partner
Phone: +48 12 378 66 39

Whenever enterprises manufacture on mass scale they also produce waste. A great deal of that waste can be used in other manufacturing processes. Therefore, enterprises often decide to sign contracts with organisations interested in buying such waste. That way, enterprises recover some of the money spent on the manufacturing process. Nevertheless, from the tax perspective, they earn revenue from sale of industrial waste. 

The rule of thumb is that an enterprise may enjoy exemption from the personal income tax (if it is a sole proprietorship) or the corporate income tax (if it is an incorporated company) only on the revenue from the business activity specified in the zone permit. Sale of industrial waste, even though it is somewhat a by-product of an activity carried on in a special economic zone in Poland under a zone permit, cannot be exempt from income tax, unless it is listed in the enterprise's zone permit as one of its business activities. The tax authorities have emphasised in numerous rulings that even though the waste production is inextricably linked to and results from the manufacturing activities inside a zone, the revenue from sale of waste cannot be exempt from income tax, unless the zone permit lists such an activity. 

That is why, if you are considering selling industrial waste from your intra-zone activities to third parties, you should include the codes of waste trade according to the Polish Classification of Goods and Services already in the application for a zone permit and in the accompanying documents, i.e. your business plan and the investor questionnaire. In special economic zones which require the so-called Preliminary Investor Application, the waste trade business should be mentioned already in that application. The waste-related activities are listed in section 38 of the 2008 Polish Classification of Goods and Services. Be mindful, however, that not every code of the classification can be entered in a zone permit. 

In case of further questions, please do not hesitate to contact us. Our tax advisers working for Rödl & Partner offices in Gdansk, Gliwice, Cracow, Poznan, Warsaw and Wroclaw will gladly review your tax documentation related to your investment in the Special Economic Zones in Poland and propose a solution allowing minimising your tax risks. We are also at your service to answer any other questions you may have with respect to tax advisory services in Poland. Our offices offer legal support with conducting business within a SEZ and with legal advisory services in Poland in any other aspects of your operations.