22-02-2021

Poland Proposes Advertising Revenues Levy

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WARSAW: The Polish government has proposed a levy on advertising revenues aimed mainly at multinationals operating in Poland that pay only a small fraction of their revenues in the form of corporate income tax. The tax will not apply to smaller, local or regional media.

The new tax on advertising revenues would bring in and estimated 800 PLN / 180 m EUR annually. The levy will not apply to small media entities earning less than 3.3 m EUR / 15 m EUR per year from advertising. The controversial new tax which is still awaiting final approval is slated to enter into force in July 2021.

Opponents of the new tax claim it is an attempt to limit media pluralism in Poland but Polish Prime Minister Mateusz Morawiecki has said that the government’s planned tax on media advertising revenue will not limit the freedom of expression saying that the government's actions "are in line with the general trend of work within the EU and OECD aimed at fairer taxation of global corporations, primarily in the internet sector, but also in the media sector."

The proposed levy is to be paid by owners of media companies, including cinemas, outdoor advertising media, and global internet companies. The money from the new levy will go to the National Health Fund and the Fund for Supporting Culture and Creativity in the Media Area (the Culture Support Fund is managed by the Ministry of Culture and National Heritage).

This will include the support of culture and free media including supporting the development of radio and cinematography in the field of Polish national heritage and sport and increasing the share of Polish content in the area of media.

Over 40 private companies from the media industry, including ones from Polsat, Agora, TVN Group Discovery and ZPR Media, protested against the planned levy on advertising revenues in a joint open letter to the authorities and political leaders that stated: "It is simply extortion, striking the Polish viewer, listener, reader and internet user, as well as Polish productions, culture, entertainment, sport and the media."

In response, the Polish Government recalled similar levies in force in other countries. In an open letter, it stated: "They function in, among others, France, Austria, Greece and Hungary, where the legislator's intention for many years has been to engage in the process of satisfying specific, often extraordinary public needs, the greatest beneficiaries of the accelerating digital transformation of the economy. Austria has particularly extensive experience in the application of advertising levies, where tax has been levied on advertising on television, radio, press and on posters since 2000."