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Artificial Intelligence and the Law

The surge in interest surrounding the implementation of artificial intelligence (AI) solutions to enhance efficiency and gain a competitive edge is the latest trend. However, concerns about legal compliance, particularly in light of pending EU regulations addressing AI, are of utmost importance.

Artificial Intelligence Regulatory Landscape

Currently, there exists no universally applicable legislation imposing specific obligations related to AI. However, this is expected to change in the near future. The finalization of the core act, known as the “Artificial Intelligence Act,” which establishes standardized rules on AI, is scheduled for later this year. The Commission, Parliament, and Council are currently engaged in negotiations to determine the final wording of this act. It will primarily impose obligations on both AI system providers and entities using AI systems under their control.

The Artificial Intelligence Act aims to establish a legal framework for the development and deployment of AI systems within the EU. Its primary objective is to ensure that AI technologies are employed in a manner that is transparent, accountable, and respects fundamental rights and values.

Common Concerns about Artificial Intelligence

In addition to regulations specific to AI, it is crucial to analyse AI usage within the framework of existing legislation. Frequently raised questions include:

  • Determining ownership rights over AI-generated outputs (completions) and establishing usage protocols, including the consequences of integrating such outputs with the client’s proprietary solutions.
  • Allocating liability for intellectual property infringements resulting from the use of AI solutions and completions/materials generated by generative AI (e.g., identifying the entity responsible for copyright claims when third-party materials were used in training models).
  • Addressing potential access by the AI system provider to data inputted into the model, particularly during content analysis and filtering to ensure proper usage.
  • Utilising client data for further training of the provider’s models.
  • Ensuring compliance with GDPR, especially in terms of upholding data subject rights and implementing requirements related to automated data processing (including profiling), as well as addressing issues of inaccurate personal data generated by AI solutions.

Solutions to these concerns can primarily be found within the contract with the AI system provider and technical documentation detailing data flow or service configuration options.

Furthermore, evaluating necessary adjustments within the client’s organisational structure is crucial to ensure lawful AI usage and mitigate solution-specific risks (e.g., over-reliance on AI systems or potential misinterpretations by AI solutions). These efforts often involve formulating appropriate usage policies for AI, updating data protection documentation, and implementing protocols for human oversight of AI-generated content.

When identifying legal risks and their solutions, it is worth remembering that there are considerable differences not only between different versions of AI solutions but – most importantly – between AI service providers, especially regarding the ways in which they regulate the above issues in their contracts or in the architecture of their services. The situation in this area is often very dynamic – for example, recently Microsoft published the Microsoft Copilot Copyright Commitment which states that, starting October 1st, Microsoft will extend existing contractual liability rules for intellectual property infringement with regard to commercial Copilot services and Bing Chat Enterprise. As a result of the above, Microsoft will defend the customer and pay any amounts awarded in adverse judgments/settlements in the event that the client is sued by a third party for infringement of intellectual property rights through the use of Copilot services or the generated responses (excluding trademarks). To benefit from the above, it is necessary to use the protections and content filters built into the services by Microsoft and not to use the services intentionally to create infringing materials. The obligation to defend against claims related to the use of AI-generated content by AI systems is undoubtedly an important change in the approach to the client, and may facilitate any decision regarding using AI.

Implementing AI is already possible Despite many valid points regarding the risks of using AI, what is common for new technologies, it should not be assumed, without further analysis, that implementing such systems in an organization is currently not possible, particularly given the still-ongoing work on the AI Act. The regulations which are in force in Poland do not generally prohibit the use of such solutions. However, it is important to approach this topic thoroughly, including by properly defining the rights and obligations of the user and the AI solution provider, defining the ways in which AI solutions can be used in the organization as well as adjusting internal procedures. Many entities are already using this technology in their daily work, showing many interesting applications of AI (e.g. efficient document review, performing summaries and analysis of large amounts of text) and how many further benefits it can bring.

Housing affordability: What Can an Average Salary Buy in Terms of Square Meters of Housing in Poland?

Examining Housing Affordability in Poland’s Largest Cities

In the realm of housing demand and affordability, Poland mirrors global concerns. A recent study by RynekPierwotny.pl delved into the housing markets of the ten largest Polish cities, gauging how many square meters of real estate an average salary can secure. The findings, listed in ascending order of affordability, are as follows:

Source information – Click here.

Katowice—0.87 square meters.

Bydgoszcz—0.77 square meters.

Poznan—0.72 square meters.

Gdańsk—0.72 square meters.

Łódź—0.69 square meters.

Lublin—0.68 square meters.

Kraków—0.66 square meters.

Wrocław—0.66 square meters.

Szczecin—0.63 square meters.

Warsaw—0.59 square meters.

A stark disparity emerges, with Warsaw standing as the least accessible city to purchase a home. Here, only 0.59 square meters of residential real estate can be acquired for an average salary.

High earnings

Interestingly, high earnings don’t always align with elevated housing prices. Katowice serves as an example, where earnings are relatively high, yet housing costs remain modest. Conversely, Szczecin presents the inverse scenario, with lower wages but real estate options tailored towards wealthier clientele.

Of note are Gdańsk and Bydgoszcz, shining in terms of housing affordability, boasting 23 properties per thousand inhabitants. In contrast, Szczecin faces a less favorable situation, offering only 12 properties per thousand residents.

Keeping an eye on the housing market reveals intriguing shifts. Over the past year, Katowice, Lublin, and Łódź saw a notable surge in real estate options, with increases of 34%, 17%, and 5%, respectively. Conversely, cities like Warsaw, Kraków, Gdańsk, and Poznań witnessed a decline in available housing opportunities.

Real Estate And Construction Law

Our experience in real estate and construction law matters includes:

  • Representing investors with the purchase and sale of real estate;
  • Representing landlords and tenants in lease and sale-and-lease back real estate transactions;
  • Representing developers in commercial and residential projects;
  • Organizing and conducting due diligence reviews;
  • Representing clients in proceedings to obtain permits and administrative decisions in the construction process;
  • Advising in connection with the development of structure and finance documents under various investment projects;
  • Advising on and defending against restitution claims;
  • Advising on corporate aspects of all transactions;
  • Advising on construction issues (contentious and non-contentious), land use, planning, permitting and environmental issues;
  • Drafting and negotiating agreements and other documentation required in the investment or construction process.

As it is very important that every transaction, investment project or any other decision we make is tax efficient and tax secure we also advise our clients on taxation of numerous real estate transactions (e.g. purchase / sale of land real estate & building real estate).

Demographic Struggles: Poland Anticipates Significant Population Decline by 2060

Poland, much like numerous other nations, grapples with significant demographic hurdles. According to projections from the Central Statistical Office of Poland, the country’s population could dwindle by nearly a third, reaching 27 million people by 2060. Let’s delve into the factors influencing this process.

Present Demographic Landscape

As of the close of the previous year, Poland was home to 37.7 million inhabitants. Projections suggest that by 2060, the population may diminish by anywhere from 8% to 29%, contingent on the scenario.

Diminishing Birth Rate

Between the onset of this year and June 2023, Poland welcomed 139.5 thousand new-borns, marking the lowest count since the conclusion of World War II. Experts foresee further deterioration. Under the pessimistic scenario, by 2060, the count of new-borns might plummet by half, totalling just around 152 thousand.

The dwindling fertility rate also influences the demographic panorama. In 2022, the rate stood at 1.26, and forecasts indicate it could decline to 1.19. Notably, these figures fail to meet even the minimal criteria for straightforward generational succession, necessitating a coefficient of 2.1.

Effects of Abortion Legislation

The reduction in the count of women within reproductive age groups adds to this predicament. In recent years, shifts in Polish legal frameworks, notably the tightening of abortion regulations, have negatively impacted the demographic scenario. These changes may impede family planning and heighten the risk of clandestine procedures.

The Role of Immigration

To counterbalance population decline and sustain economic vitality, Poland must actively allure immigrants. As of June 2023, the nation boasted over a million foreign laborers, primarily hailing from Ukraine. However, competition with neighbouring nations like the Czech Republic, Slovakia, and Germany could exacerbate the situation, potentially diminishing Poland’s appeal to prospective immigrants.

Aging Population

With a reduction in the number of working-age citizens and an upswing in retirees, Poland confronts substantial challenges in the realms of healthcare and social security. The count of individuals aged 65 and above could surge by over 80%, placing substantial strain on healthcare and pension systems.

By 2022, for every 100 working-age individuals, there were 70 who were not in the workforce. However, according to the “medium” scenario, by 2060, the ratio could skew towards 105 working-age individuals for every 100 non-working individuals.

Poland Implements Reduced Rates for Late Payment Interest

Late payment interest

On September 15, 2023, Poland released an Announcement from the Ministry of Finance regarding the interest rates for tax arrears and late payments. This announcement includes the following reductions in interest rates:

Source information: https://www.dziennikustaw.gov.pl/MP/2023/1017

Late payment interest rates

The standard rate has been lowered from 16.5% to 15.0% per annum.

The reduced rate has been decreased from 8.25% to 7.50% per annum.

The increased rate has been brought down from 24.75% to 22.50% per annum.

Reduced rate

The reduced rate is applicable when a taxpayer initiates self-correction prior to receiving a notice of procedures for an amended assessment, and the payment is made within 7 days of filing the corrected return. Conversely, the increased rate is enforced for VAT and customs duties, including situations where a taxpayer understates their tax liability, overstates an overpayment or refund claim, or neglects to file a return and pay tax, and this is discovered during tax control proceedings.

For further information about late payment interest or any other tax matters, please contact Bernard.

Tax Lawyer Poland

If you are looking for a tax lawyer in Warsaw, our law firm can help you. The tax landscape in Poland is forever evolving, particularly when dealing with cross-border and local tax regulations and this presents businesses and individuals with a significant challenge. Recently, there has been a noticeable increase in the number and complexity of tax investigations conducted by authorities and it is expected that enforcement will continue to gather pace.

The requirement for tax adjustments and a multi-disciplinary approach to maximise tax effectiveness is rising accordingly. The law firm of Bernard Łukomski has in-depth knowledge and expertise in national and international tax laws and we advise our clients in all aspects of personal and corporate income taxes, VAT, excise duty, transfer tax, stamp duty, real estate tax, tax disputes, social security, and fiscal criminal law.

Email / Tel

bernard.lukomski@kpbl.pl

+48 608 093 541 (Mobile)

+48 692 802 229 (WhatsApp)

Navigating Post-Divorce Child Contact Arrangements in Poland

Child contact

Embracing a new chapter post-marriage dissolution can be intricate, especially when it comes to matters involving children. Commonly, after the bonds of matrimony fray, parents find themselves at odds over crucial child-related decisions. Setting up a coherent visitation schedule becomes a daunting task, often leading to one parent limiting the other’s interaction with the child.

In the context of divorcing couples with shared minor children, Polish courts play a pivotal role in delineating the contours of contact arrangements. The divorce decree becomes a canvas upon which the schedule of interactions between the non-custodial parent and the children is artfully painted. This court-sanctioned schedule is binding, carrying the weight of legal consequences if not adhered to.

The exception to this rule surfaces when both spouses unite in a joint request to keep child contact matters outside the divorce decree. In this scenario, the court refrains from imposing a schedule.

Child contact encompasses a gamut of interactions, spanning from maintaining correspondence to leveraging digital avenues like WhatsApp, Skype, and phone calls. Additionally, it includes physical presence in the child’s life, encompassing visits, meet-ups, and even the potential for the parent to take the child abroad as part of these interactions.

The granularity of contact arrangements is subject to variation. Some cases call for meticulously crafted schedules with fixed dates and hours for interactions, while others adopt a more fluid approach, where each interaction is individually agreed upon by the parents.

However, the court’s role isn’t solely confined to establishing a roadmap for contact. It also wields the authority to curtail or shape these interactions for the child’s best interests. These limitations may involve restrictions such as disallowing in-person meetings, preventing the child’s relocation from their permanent residence, or even mandating the presence of a guardian, probation officer, or court-appointed individual during interactions.

In extreme cases, the court can completely halt contact if it deems that the child’s well-being is at stake. Decisions surrounding contact arrangements aren’t static; they can evolve over time based on changing circumstances or new evidence.

Engaging in legal proceedings involving child contact is a nuanced journey, particularly when international elements come into play. Cases involving cross-border parental residence, potentially impacting the child’s travel, add an extra layer of complexity. In such situations, seeking guidance from a dedicated Family Law Firm in Poland becomes indispensable. These experts adeptly navigate the intricacies of court proceedings, ensuring that your requests are eloquently presented and substantiated by compelling evidence – all aligned with the child’s best interests.

Our team of experienced family lawyers stands ready to walk with you through the labyrinthine corridors of court proceedings in Poland. Don’t hesitate to reach out – we’re here to guide you toward a resolution that safeguards the well-being of your child while respecting your rights as a parent.

For further information, contact Bernard:

Email / Tel

bernard.lukomski@kpbl.pl

+48 608 093 541 (Mobile)

+48 692 802 229 (WhatsApp)

Unveiling a New Era: Navigating the Landscape of Poland’s National e-Invoice System (KSeF)

KSeF

Embarking on a revolutionary journey to reshape the landscape of VAT invoicing, Poland introduces the National e-Invoice System (KSeF). This ground-breaking initiative, initiated in January 2022, promises to redefine the issuance and receipt of VAT invoices, propelling businesses into a new era of digital efficiency. While its initial rollout was optional, the mandatory adoption of KSeF is on the horizon, slated to commence in July 2024.

In the realm of corporate operations, one of the foremost challenges enterprises confront is the construction of bespoke tools or the hunt for pre-packaged solutions that align seamlessly with the intricate compliance requirements of e-Invoicing. The intricate process of integrating these solutions with the taxation framework amplifies the complexity. The heartbeat of this challenge lies in the necessity to adhere to meticulous standards, encompassing the very fabric of document structures, along with the registration of these documents within the governmental ecosystem. This endeavour presents a formidable hurdle, especially for conglomerates dealing with an avalanche of documents awaiting transformation into the new-age format.

In the endeavour to decipher the key challenges entailed in the implementation of KSeF, we shed light on the pivotal hurdles faced by entities, accompanied by strategies and support mechanisms that pave the way for a seamless transition. Our focus lies in unravelling the essential elements that pave the path to a successful integration of the groundbreaking e-Invoice paradigm.

Charting the Course: Decoding the Path to Implementing e-Invoices

The dawn of the National e-Invoice System was heralded on January 1, 2022, as structured invoices began to flow through the digital arteries of the Ministry of Finance’s innovative ICT system, the KSeF. The initial phase allowed for voluntary participation, largely attributed to regulatory gaps and technical intricacies that required ironing out. It wasn’t until a recent legislative revision that the much-anticipated solutions, conceived through public consultation, were woven into the fabric of the system. Consequently, the deadline for making KSeF obligatory for all VAT invoices in Polish commercial transactions was extended by six months, setting the stage for a mandatory shift by July 1, 2024.

As this timeline unfurls, it’s imperative not to underestimate the scale of transformation that looms ahead. The magnitude of preparations required extends beyond the technological spectrum and delves deep into the procedural and operational facets of businesses. The labyrinthine tax implications accompanying this transition necessitate meticulous planning and meticulous execution.

The Legal Tapestry: Navigating Legal and Tax Implications

A lapse in adhering to the National e-Invoice System’s mandates can summon penalties of significant magnitude. Taxpayers breaching their obligation to utilize KSeF, issuing invoices incongruent with prescribed templates, or failing to dispatch invoices on time are susceptible to fines imposed by the tax office. These fines could range up to 100% of the tax amount indicated on an invoice issued outside the KSeF framework. Even in instances where no tax is indicated, fines up to 18.7% of the total invoice amount are not to be taken lightly. The veil of data privacy lifts as tax authorities gain unrestricted access to the data housed within KSeF, allowing for meticulous oversight.

The Vigilance of Transformation: Real-time Insights into Transactions

July 1, 2024, ushers in a new era of real-time transaction vigilance. The tax authorities’ access to granular transaction data during invoicing necessitates precision in data submission and thorough verification to align with VAT Act provisions. When coupled with data from single control files (JPK) and advanced analytical tools, the system’s potential to unearth irregularities in VAT accounting becomes an undeniable reality.

Crafting a Future of Efficiency: The Quest for the Perfect Partner

In the pursuit of a harmonious fusion between accounting and invoicing processes, the partnership between Ecovis and Pagero emerges as a beacon of seamless integration. Empowering companies to steer their invoicing operations with heightened efficiency and security, this partnership mitigates the specter of errors. By melding expertise with cutting-edge technology, the joint platform paves the way for businesses of all scales to elevate their operations through comprehensive support.

The art of selecting the right provider for e-Invoice integration rests on multiple pillars. Experience in navigating the intricacies of tax technology projects assumes paramount importance. In this realm, Pagero emerges as a veteran, having etched its presence in the market for over two decades and making its Polish debut in 2022. Boasting the world’s largest open business network, Pagero stands as a testimony to interoperability, spanning over 140 markets and facilitating seamless compliance with local regulations. It’s a platform where invoices, orders, and other e-documents harmoniously traverse structured formats underpinned by agreed-upon data scopes.

The path forward necessitates not only technological prowess but also a comprehensive grasp of business and procedural dynamics. The union between Ecovis and Pagero champions this cause, providing the scaffolding required to scale this mountainous transformation with confidence. The prowess to handle incoming invoices from international collaborators and the facility to attach documents to invoices further underline the platform’s versatility.

Embracing the Future Today: Initiating e-Invoice Exchange

Embracing the essence of automation and efficiency, the urgency of adopting e-Invoice exchange well ahead of KSeF’s mandatory timeline becomes a strategic imperative. Unveiling the potential of automation through early initiation ushers in benefits sooner than anticipated.

As Poland’s National e-Invoice System (KSeF) charts an ambitious course, the challenges it presents are matched only by the opportunities it unlocks. By choosing the right partners, seizing the mantle of automation, and navigating this transformation with poise, businesses stand to script a future that thrives on digital efficiency and compliance. The era of KSeF is here, beckoning businesses to embark on a journey of transformation and growth.

For further information, contact Bernard:

Email / Tel

bernard.lukomski@kpbl.pl

+48 608 093 541 (Mobile)

+48 692 802 229 (WhatsApp)

Bankruptcy filing obligation – COVID

As of July 1, 2023, the state of the pandemic in Poland officially ended, marking the first time since 2020. Consequently, certain regulations that were implemented to protect businesses from the economic consequences of the COVID-19 pandemic have expired. One of these regulations is the suspension of the obligation to file for bankruptcy within 30 days of insolvency, specifically for cases where insolvency was caused by the pandemic.

Therefore, members of the management boards of Polish companies that became insolvent due to the pandemic and have not yet filed for bankruptcy were required to do so by July 30, 2023. Failing to meet this deadline may result in civil, criminal, tax, and administrative liability for the managers.

In light of these developments, it is crucial for members of Polish management boards to be aware of their obligations and take appropriate actions. This has practical implications for businesses operating in Poland.

Insolvency Tests under Polish Law:

Polish Bankruptcy Law includes two separate insolvency tests:

  1. Liquidity Insolvency Test: A debtor is considered insolvent if they are unable to pay their pecuniary liabilities as they become due. This test applies to both individuals and legal entities. If the delay in payment of pecuniary liabilities exceeds three months, it is presumed that the debtor has lost the ability to pay.
  2. Balance Sheet Insolvency Test: This test applies only to corporate entities. A debtor is presumed to be insolvent if their pecuniary liabilities exceed the value of their assets for a period exceeding twenty-four months. Future liabilities and liabilities towards partners or shareholders arising from a loan within the previous five years are not included in the balance sheet liabilities.

Insolvency-Related Obligations of Managers of Polish Companies and Associated Liability:

Managers of Polish limited liability companies and simple joint-stock companies may be personally liable for the company’s debts if enforcement against the company proves ineffective. To avoid liability, managers must demonstrate that they filed for bankruptcy in a timely manner, initiated restructuring proceedings, were not at fault for a late filing, or that creditors did not suffer any damage.

Managers may also be liable for tax and social security arrears if enforcement against the company’s assets proves ineffective. Liability can be avoided if a timely bankruptcy filing was made or if the manager is not at fault for the late filing.

Criminal and quasi-criminal liability can also arise from a lack of or late bankruptcy filing, leading to penalties such as fines, limitations of liberty, or imprisonment. Furthermore, a late filing may result in a court-imposed prohibition on conducting business or being a member of the management or supervisory boards of legal entities.

COVID Bankruptcy Filing Suspension:

During the COVID-19 pandemic, specific measures were introduced in Polish law to protect businesses, including a temporary suspension of the bankruptcy filing obligation. This suspension applied to debtors who became insolvent due to the pandemic and lasted until the state of epidemic threat was lifted.

With the state of epidemic threat ending on June 30, 2023, members of management boards of insolvent Polish companies will have until July 30, 2023, to file for bankruptcy to avoid personal liability.

Considerations and Mitigating Risks for Those Conducting Business in Poland:

Given these developments, an increase in bankruptcy filings and restructuring processes is expected in Poland. While a massive wave of bankruptcies is unlikely, it is crucial to monitor the solvency status of Polish business partners, as their bankruptcy or restructuring can significantly impact commercial relationships.

Bankruptcy or restructuring processes can lead to the deprivation of management rights, court-appointed trustees or administrators overseeing business operations, and potential invalidation of contracts predating the opening of proceedings. Restructuring processes may also prevent the termination of certain agreements without the consent of the creditors’ council.

To mitigate risks, it is advisable to continuously monitor the central register of debtors, which reveals bankruptcy and restructuring motions related to entities in Poland. This allows for timely awareness of potential risks and the ability to take appropriate actions.

Overall, staying informed, conducting thorough assessments of insolvency tests, and considering available restructuring options can help mitigate risks and ensure compliance with Polish bankruptcy regulations.

Rule of Law Report 2023. EU Commission has “serious concerns” regarding Poland

The Rule of Law Report for 2023, published by the European Commission, has raised “serious concerns” regarding the state of the rule of law in Poland. The report focuses on four key areas: national justice systems, anti-corruption frameworks, media pluralism, and other institutional checks and balances. According to the EU executive, there are persistent concerns regarding the independence of the Polish judiciary and claims of political influence over the media. The report also highlights concerns related to the so-called “Lex Tusk” legislation.

This is the fourth annual Rule of Law Report prepared by the European Commission in response to accusations from Poland and Hungary that the EU selectively addresses rule of law issues and targets these two countries. As a result, the Commission now publishes separate reports for each Member State to address rule of law deficiencies.

The chapter dedicated to Poland in the report spans nearly 30 pages, outlining challenges in the judiciary, anti-corruption measures, media freedom, and other aspects of checks and balances. The report emphasises the ongoing serious concerns about the independence of the Polish judiciary, with recent rulings from the Court of Justice of the EU reinforcing the importance of judicial independence. Concerns persist regarding the lack of implementation of judgments and interim measures from the European Court of Human Rights, as well as disciplinary investigations and proceedings against judges.

The report also highlights serious concerns related to the Constitutional Tribunal and notes that although Poland has taken steps to raise the standards of judicial independence and reform the disciplinary regime for judges, challenges remain. The issue of corruption in the public sector is also addressed, with experts and business executives perceiving corruption levels as relatively high. The report points out the absence of a new Anti-Corruption Programme and a lack of progress in strengthening lobbying rules.

Regarding media pluralism, positive changes have been introduced, but concerns have been raised about the functional independence of the media regulator. While legal safeguards for editorial independence are in place, claims of political influence over the media persist. The report emphasises the need for fair, transparent, and non-discriminatory procedures for granting operating licenses to media outlets.

The report also discusses other institutional checks and balances, including concerns about laws being adopted without adequate consultations and the delay in appointing members to the College of the Supreme Audit Office, risking its effective functioning. The controversial “Lex Tusk” legislation, which empowers an administrative committee to assess and decide on the deprivation of individuals’ right to hold public office, raises serious concerns.

The Rule of Law Report provides recommendations for Poland, including separating the functions of the Minister of Justice from the Prosecutor-General, strengthening integrity rules, ensuring independent and effective investigations and prosecutions, and enhancing the independent governance and editorial independence of public service media. It also emphasises the need for a systematic follow-up to findings by the Supreme Audit Office and urgent appointments to the College of the Supreme Audit Office.

While the report itself does not impose direct duties or trigger sanctions, it is used as a basis for other infringement procedures by the Commission. Its provisions are frequently referenced in discussions on the rule of law in Member States and EU debates on the subject. Poland and Hungary have previously rejected the report, accusing it of bias and double standards, and claiming that the Commission has overstepped its authority.

The Rule of Law Report serves as an important tool for assessing and addressing rule of law issues within the EU and promoting dialogue and accountability among Member States.

2023 Real Estate Market

Despite unfavourable external factors, the real estate market has demonstrated remarkable stability across most sectors, with the private rented sector (PRS) emerging as a resilient alternative asset class, attracting 4% of investment volume. Poland has successfully attracted €5.8 billion in capital, further strengthening its real estate market. However, caution remains as market uncertainties make it challenging to surpass previous investment volumes achieved in 2021-2022.

In response to the challenging environment, the implementation of a hybrid work model is already underway, leading to flexible lease terms and changes in office space requirements. Rising inflation has resulted in higher rent indexation and increased energy costs, potentially impacting occupier demand. Additionally, there is a noticeable shift in demand for retail space, focusing on convenience and mixed-use developments, while the popularity of shopping at discounters and outlets has grown due to inflation.

Environmental, social, and governance (ESG) considerations are driving investment in green solutions across all sectors. Property owners are expected to invest more in sustainable solutions due to the surge in energy prices. Energy-efficient buildings not only reduce operational and maintenance expenses but also provide resilience against energy and utilities cost fluctuations during the ongoing global energy crisis. ESG-compliant properties attract a broader pool of potential tenants and investors willing to pay a premium for environmentally friendly assets.

Key regulations implemented in 2022 have significantly impacted the Polish real estate market. Noteworthy changes include amendments to the Construction Law, aimed at optimising the investment and construction process, and the introduction of the Electronic Construction Log to track construction progress online. The Development Act has established a Developer Guarantee Fund to protect purchaser funds, and real estate-rich companies face limitations on tax depreciation (started from January 1, 2023). Additionally, a new tax on shifted profits has been levied on Polish entities since 2022.

The remaining part of the year 2023 poses various challenges for the real estate market, including the cost-of-living crisis, inflation, increased interest rates, the war in Ukraine, and the persistent effects of the COVID-19 pandemic. Companies must carefully assess the potential impacts of these events on their financial statements in accordance with International Financial Reporting Standards (IFRS). However, amidst these challenges, the upcoming year also presents exciting opportunities in the real estate sector. To succeed in this dynamic landscape, companies should prioritize flexibility, preparedness, and adaptability to the new normal, with ESG considerations at the forefront.

At KPBL, we offer comprehensive legal services tailored to the specific needs of our clients. Our expertise covers various aspects of real estate and construction law, including representing investors in purchase and sale transactions, assisting landlords and tenants in lease and sale-and-lease back transactions, and advising developers on commercial and residential projects. We conduct thorough due diligence reviews, provide guidance on permit acquisition and administrative decisions, and offer legal counsel for structuring and financing investment projects. Our services also extend to advising on restitution claims, corporate aspects of transactions, construction issues, land use, planning, permitting, environmental matters, and drafting and negotiating necessary documentation.

Tax efficiency and security are essential considerations in every transaction and investment project. That’s why we provide expert advice on the taxation of numerous real estate transactions, such as the purchase and sale of land and buildings. We help our clients take advantage of tax investment relief for residential purposes and explore opportunities to avoid income tax when selling or transferring real estate. Our expertise also covers the recent tax on revenues from real estate ownership exceeding PLN 10,000,000, as well as determining the applicability of Value Added Tax (VAT) and its conditions for exemption. Additionally, we offer guidance on real estate tax and stay up to date with administrative court jurisprudence and tax authority interpretations to provide clients with the most relevant and effective assistance. In case of disputes with tax authorities, we vigorously represent our clients to protect their interests.

If you require official tax interpretations tailored to your unique situation, we are well-prepared to assist you. Our goal is to present compelling legal arguments that are readily accepted by the tax authorities, ensuring efficient and timely resolution of tax-related matters.

Choose KPBL for expert guidance and representation in all your real estate and construction legal matters. Contact us today to discuss how we can assist you in achieving your goals while ensuring compliance with applicable laws and maximising tax advantages.

Mastering Corporate Law in Poland: A Comprehensive Guide for Lawyers

Introduction:

Corporate law forms the foundation of business transactions and governance in Poland. As a lawyer practicing in this field, it is essential to possess a comprehensive understanding of the country’s corporate legal framework to provide effective advice and representation to clients. From formation and governance to mergers and acquisitions, corporate law encompasses a wide range of legal principles and practices. This article serves as a comprehensive guide to navigating corporate law in Poland.

Company Formation and Structure:

The process of forming a company in Poland involves complying with legal requirements and selecting an appropriate business structure. Lawyers must guide clients through the registration process, including drafting articles of association, determining share capital, and ensuring compliance with the Commercial Companies Code. Understanding the distinctions between various types of entities, such as joint-stock companies, limited liability companies, and partnerships, is crucial when advising clients on the most suitable structure for their business.

Corporate Governance:

Corporate governance plays a vital role in promoting transparency, accountability, and the protection of shareholders’ rights. Lawyers must assist clients in developing effective governance structures, including drafting bylaws, shareholder agreements, and board charters. They must also provide guidance on directors’ duties, conflicts of interest, and corporate disclosure obligations.

Shareholders’ Rights and Disputes:

Protecting shareholders’ rights and resolving disputes is a critical aspect of corporate law. Lawyers must advise clients on matters such as shareholder agreements, voting rights, dividend distributions, and the exercise of minority shareholders’ rights. In case of disputes, they must navigate mediation, arbitration, or litigation to safeguard clients’ interests and seek equitable resolutions.

Mergers, Acquisitions, and Corporate Restructuring:

Mergers, acquisitions, and corporate restructuring transactions require comprehensive legal expertise. Lawyers must guide clients through due diligence, negotiate and draft agreements, and secure regulatory approvals. They must have a deep understanding of antitrust regulations, tax considerations, employment law implications, and intellectual property rights. Effective negotiation skills and attention to detail are crucial for achieving successful outcomes in these complex transactions.

Compliance and Regulatory Matters:

Compliance with corporate regulations and industry-specific laws is essential for businesses operating in Poland. Lawyers must advise clients on legal obligations, such as financial reporting, data protection, competition law, and anti-corruption measures. They must stay up to date with regulatory developments and guide clients in implementing effective compliance programs to mitigate risks.

Corporate Litigation and Dispute Resolution:

Corporate disputes can arise from breaches of contracts, shareholder disputes, or boardroom conflicts. Lawyers must have expertise in corporate litigation and alternative dispute resolution methods. They must possess strong negotiation, mediation, and litigation skills to represent clients effectively and seek favourable resolutions.

Conclusion:

Corporate law forms the backbone of business operations and transactions in Poland. Lawyers practicing in this field must possess a comprehensive understanding of the legal framework, corporate governance principles, and transactional intricacies. By mastering corporate law, lawyers can provide clients with sound advice, guide them through complex transactions, and help them navigate potential legal challenges. Understanding the nuances of corporate law in Poland empowers lawyers to protect clients’ interests, ensure compliance, and contribute to the success of their corporate endeavours.

How We Can Assist You in Real Estate and Construction Law Matters

At our firm, we have extensive experience in handling a wide range of real estate and construction law matters. Our team of dedicated lawyers is committed to providing top-quality legal services tailored to meet your specific needs. Here’s how we can help you:

Purchase and Sale of Real Estate:

We represent investors in navigating the complex process of buying and selling real estate. Our team will guide you through the transaction, ensuring that all legal aspects are handled efficiently and effectively.

Lease and Sale-and-Lease Back Transactions:

Whether you are a landlord or tenant, we provide comprehensive legal representation in lease and sale-and-lease back real estate transactions. Our lawyers will negotiate and draft agreements that protect your interests and ensure a smooth transaction.

Development Projects:

For developers, we offer legal support in commercial and residential projects. From due diligence reviews to organizing permits and administrative decisions, we will provide guidance throughout the development process.

Construction Issues and Permits:

Our team assists clients in addressing contentious and non-contentious construction issues. We handle matters related to land use, planning, permitting, and environmental compliance. We also represent clients in proceedings to obtain permits and administrative decisions.

Taxation and Real Estate:

We understand the importance of tax efficiency and security in real estate transactions. Our lawyers provide expert advice on taxation matters related to real estate, including purchase/sale of land and buildings, tax investment relief, income tax implications, value-added tax (VAT), and real estate tax.

Dispute Resolution:

In the event of disputes with tax authorities or other parties, we have the expertise to represent you effectively. Our team will navigate the legal process, leveraging our experience and knowledge to protect your rights and achieve a favourable outcome.

Official Tax Interpretations:

If you require official tax interpretations for your specific circumstances, we can assist you in preparing formal applications. Our applications go beyond presenting facts and include comprehensive legal arguments and positions. Our goal is to present arguments that are readily accepted by tax authorities, ensuring a smooth and efficient resolution.

Legal Analysis and Jurisprudence:

To provide you with the best possible advice, we continuously analyze administrative court decisions and interpretations of tax authorities. This allows us to stay up to date with current legal status and practices, enabling us to provide you with informed and effective assistance.

Summary:

When it comes to real estate and construction law matters, our dedicated team is here to provide you with exceptional legal services. From purchase and sale transactions to tax implications and dispute resolution, we have the expertise to guide you through every step of the process. Contact us today to discuss your specific needs and let us help you achieve your goals in real estate and construction.