Poland’s new finance minister wants US home rental site Airbnb to pay tax on the revenues it earns in the central European country, in the latest intervention by a senior European politician in the debate on how to tax digital companies.
Tadeusz Koscinski said he sought to ensure Poles who rent out their flats via sites such as Airbnb pay the applicable taxes, and that collating data on this would give the authorities an insight into how much groups such as Airbnb were making in the country.
“If we’re going to be making sure that anyone who is renting out their flats in the sharing economy pay their fair share of tax, then also the people they’re paying — Airbnb are part of the value chain — they should be paying as well,” he said in an interview in London, adding that Airbnb should “set up shop” in Poland.
He added: “Otherwise they’re distorting markets. Companies that are based in Poland are paying taxes so their margins are lower. So it’s an unfair practice. I’m not there to either kill them or milk them, just to make sure that they don’t disrupt markets.”
The issue of taxing digital companies, who often have headquarters or legal entities in one country but activities that cross borders, has become an increasingly contentious topic on both sides of the Atlantic. After an effort to agree a common EU approach faltered last year, France put forward plans for its own digital tax, sparking a bitter row with the US, which has threatened retaliatory tariffs on goods such as champagne.
Poland had also been considering its own broader digital tax, but after intense lobbying by the US — the home of many of the biggest global digital companies — the government of Mateusz Morawiecki has opted to await the outcome of 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 take part in the OECD discussions but would have to “rethink” if the deliberations were too slow, or their result was not workable for Poland.
He added that he did not favour the idea of a “one-size-fits-all” tax for digital groups. “Some digital companies have 60 per cent margins and some have 6 per cent margins, and if you start putting the same tax on turnover, you’ll crucify some of them, and we don’t want to crucify companies,” he said.
“I would much prefer to sit down with Airbnb and Google and Amazon and everyone else and say: ‘you know you’ve got to pay tax in Poland, otherwise there’ll be no roads, no police, no schools. It’s a no-brainer that you’ve got to pay tax: how much are you prepared to pay?’”
A spokesman for Airbnb, which operates across the EU via its hub in Ireland, and is expected to launch an IPO later this year, said: “We follow the rules and pay all the tax we owe in the places we do business; that is true as rules apply today and will remain true for whatever rules apply in future.” It added that Poland’s tax authorities already received VAT payments “on the fees charged to Polish hosts and guests”.
Mr Koscinski, a fluent English speaker who previously worked in the ministries of development, and entrepreneurship and technology, became finance minister in November after the ruling Law and Justice party won re-election, taking the helm in an economy that has not experienced recession for almost three decades.
Over the past year, however, the international environment has soured, with a trade war flaring between the US and China, and with the German economy — Poland’s main export market — beginning to stutter.
However, Mr Koscinski said he remained optimistic about Poland’s economic prospects, and played down the idea that the German slowdown could have a knock-on effect on Poland, which has deep economic ties to its western neighbour.
“I don’t think the German slowdown will be as bad as some people think,” he said, noting that tensions between the US and China appeared to have calmed slightly, which would ease the strain on Germany’s export machine.
“But I think more important is to say that the Polish economy is still growing, and will still be one of the best-performing global economies going forward. Consumption is still increasing. And I think the most important rising star will be exports [and] going into new markets.”
