Poland believes that the current tax framework, designed long before the internet era, needs a modern overhaul.
Deputy Digital Affairs Minister Dariusz Standerski put it plainly: "The taxes we have today were designed decades ago and the thinking behind them didn't anticipate the kinds of businesses we have today." He pointed out that some companies rake in huge revenues from Polish users while paying very little in local taxes, employing hardly anyone in the country, and making almost no local investments.
Standerski did not mince words about those Chinese firms. "They flood us with products, reaping billions in profits, and there are no employees, no investments, no expenses," he said. "We, as Poland, are definitely being drained by these companies."
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That matters because Poland ran a budget deficit equal to 7% of its economic output last year. The extra cash would help close that gap and also fund investments in cybersecurity and artificial intelligence.
Poland's move follows a broader trend among European Union nations seeking to capture tax revenue from large digital corporations that often operate across borders with minimal physical presence. Similar proposals in France, Italy, and Spain have drawn threats from Washington, yet several countries have pressed forward. The Polish government sees the tax as a way to level the playing field for domestic businesses while securing funds for critical infrastructure. With elections expected in 2027, the timing of the legislation could also be politically advantageous for the ruling coalition.
France, Italy, and Spain have all proposed or enacted similar digital taxes, each facing U.S. warnings of retaliation. Poland's approach echoes these efforts, reflecting a growing frustration among EU nations with the current tax structure. The government argues that waiting for a global agreement, which the OECD has been negotiating for years, would delay needed revenue while digital giants continue to minimize their tax bills.
The OECD has been working on a unified digital tax framework for years, but disagreements among major economies have stalled progress. In the meantime, countries like France, Italy, and Spain have enacted their own digital service taxes, each drawing U.S. threats of tariffs. The Polish levy mirrors these by focusing on corporations whose worldwide turnover exceeds €1 billion and Polish earnings at least 25 million zloty. The Polish government estimates the tax will generate between 1.7 and 3 billion zloty annually from 2027 to 2030, funds that could help narrow the budget deficit and support investments in cybersecurity and artificial intelligence.
The U.S. sees this tax as a direct hit on American companies.
Standerski acknowledged the tensions but played down the risk. "Of course, there are various reservations and requests for clarification, just like there always are between partners," he said.
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