Economy of Poland

Exports & Imports

Poland's robust export sector is a key driver of economic growth. (i) Exports: Leading exports include machinery, electronic equipment, vehicles, furniture, and plastics (valued at $224.6 billion USD in 2017). Poland remains a major European exporter of these goods. (ii) Imports: Poland imports a variety of goods, including raw materials, fuels, and consumer products (valued at $221.4 billion USD in 2017).

Balance of Trade

Poland typically maintains a positive trade balance, where the value of exports surpasses the value of imports. This trend continued in 2022 with a surplus estimated around $10 billion USD. This surplus helps generate revenue and supports economic activity.

Infrastructure Development

Poland boasts a well-developed and continuously improving infrastructure network. (i) Roads: As of 2023, Poland's total road network exceeds 370,000 kilometers, with a mix of highways, expressways, and national roads. The government allocates funds for further expansion and modernization. (ii) Other Infrastructure: Developments are underway in other crucial areas. High-speed rail projects are in progress to improve connectivity. Poland is also investing in upgrading airports, power grids, and wastewater treatment facilities.

Fiscal Policy

Poland's fiscal policy aims for a balance between economic growth, managing public debt (around 46% of GDP in 2019), and social welfare programs. The government uses a combination of spending measures and tax adjustments to achieve these goals.

Monetary Policy

The National Bank of Poland (NBP) sets the country's monetary policy. The NBP focuses on maintaining price stability through interest rate adjustments and managing foreign exchange reserves.

Trade Agreements

Poland's membership in the European Union (EU) and participation in various trade agreements are significant advantages. This allows for duty-free access to a vast European market and fosters foreign investment.

Environmental Regulations

Poland recognizes the importance of environmental protection, particularly with air and water pollution being ongoing concerns. The country has implemented regulations to address these issues, but challenges remain in areas like waste management and sustainable resource utilization. There's a growing focus on renewable energy sources like wind and solar power to reduce reliance on fossil fuels.

Tax System in Poland

Capital gains tax: Capital gains tax rates in Poland vary depending on the asset and holding period. (i) For most assets held over one year: The rate is 19%. (ii) For assets held for less than one year: The rate may be higher, depending on the specific asset and income bracket. (iii) Corporate tax rate: The standard corporate tax rate in Poland is 19%. (iv) Sales tax (Value Added Tax - VAT): Poland has a Value Added Tax (VAT) of 23%, applied to most goods and services. However, lower rates (reduced VAT) of 8% and 5% apply to specific items like basic foodstuffs and pharmaceuticals.
Property tax: Property taxes in Poland depend on the type and location of the property. Rates typically range from 0.03% to 0.2% for residential properties and can be higher for commercial properties.
Payroll tax: Social security contributions in Poland are funded through a payroll tax system.
Tax deductions and credits: Poland offers some tax deductions and credits to reduce tax liability.
Tax compliance: Tax compliance in Poland has improved in recent years, but efforts are ongoing to further strengthen tax administration.
Tax burden: The overall tax burden in Poland is considered moderate compared to some developed countries. The government aims to balance revenue generation with fostering a business-friendly environment.