Poland Plans Digital Services Tax Despite U.S. Pushback

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📝 usncan Note: Poland Plans Digital Services Tax Despite U.S. Pushback

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Krzysztof Gawkowski, Deputy Prime Minister of Poland and Minister of Digital Affairs

Poland is moving ahead with plans to introduce a digital services tax aimed at large multinational technology companies, despite concerns it could strain relations with the United States.

The proposed tax would amount to 3% of revenue and apply to companies with global revenues above €750 million ($875 million). The measure is expected to take effect in 2027, generating an estimated 2.5 billion złotys ($685 million) annually to fund domestic technology development and innovation.

U.S. Reaction and Domestic Opposition

U.S. officials have been openly critical of the plans. Thomas Rose, appointed U.S. ambassador to Poland earlier this year, described the move as damaging to bilateral ties. In March, he said the policy would hurt relations with the Trump administration, urging Poland to rescind the tax to “avoid the consequences.”

President Donald Trump escalated the rhetoric on Monday, posting on social media that countries imposing digital taxes risk “substantial additional tariffs” and potential restrictions on U.S. technology exports. He argued such taxes are “designed to harm, or discriminate against, American technology.”

The proposal has also faced skepticism from Poland’s newly elected president, Karol Nawrocki, and members of his team. According to the business news outlet money.pl, his aides have warned that the tax could make Poland “a de facto business enemy of the United States” and drive tech firms to relocate to countries such as Ireland or the Czech Republic.

Why Poland Says It’s Needed

However, Digital Affairs Minister Krzysztof Gawkowski maintains the government’s commitment to the plan and argues the tax is necessary to ensure fairer competition in the digital services market.

Companies such as Google and Facebook generate billions in revenue from Polish users yet pay comparatively little corporate income tax domestically.

For example, Facebook Poland reported 1.82 billion złotys ($457 million) in revenue in 2024 but paid 10.6 million złotys ($2.66 million) in corporate tax.

Google Poland declared 1.53 billion złotys ($384 million) in revenue, but the bulk of its advertising business is invoiced through its Irish subsidiary, where the corporate tax rate is 12.5%, compared with Poland’s 19%.

According to Piotr Mieczkowski of the National Chamber of Electronics and Telecommunications, foreign tech firms use intra-company invoicing to minimize taxes. “Mechanisms ensuring taxes are paid where value is generated — in the consumer’s country — would be fair,” he said.

Katarzyna Szymielewicz, president of the Panoptykon Foundation, which advocates for digital rights, sees the proposal as a first step toward leveling the playing field. “It’s preposterous that Polish tech companies pay many times more in taxes than the largest internet platforms,” she says.

In July, the European Commission dropped plans to levy a tax on digital companies in a bid to secure more advantageous trade terms with Trump. Gawkowski said European Union member states “have a duty” to show “strong leadership” and insisted that Warsaw would continue working on its own digital tax bill, regardless of the EU line.

Szymielewicz believes a lack of consensus among member states was one reason for the shift. “Either we take this step on our own, at our own risk, or nothing will change and we will continue to pay the price,” she says.