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Events coverage

Tax and finance – important for manufacturers too!

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The BPCC’s Manufacturing Industries group met in Rzeszów at McBraida factory on 12 March 2019, for a meeting aimed at CFOs and finance directors of manufacturers. The aim was to look at tax and finance issues facing manufacturers in Poland.

The host of the event, Mariusz Małachowski, business development manager of McBraida Polska, gave a presentation introducing the firm to participants. The third-generation family-owned business was established in Bristol in 1954 and has over 60 years’ experience in the aviation sector. Five years ago, it opened a second manufacturing facility, in Rzeszów. Its main client is Rolls-Royce, however, since opening the Rzeszów plant, McBraida has rapidly been expanding its customer base. Growing its turnover and employment at 20% a year every year since then, the firm specialises in obróbka of difficult to work materials, such as titanium.

The main presentation of the day, from KPMG tax experts Mirosław Michna and Agnieszka Sułecka, focused on the latest changes to the Polish tax regulations, which are potentially threatening to foreign-owned businesses in Poland and their boards of directors. The withholding tax (WHT) regulations mean that corporation tax must be paid at a set rate up-front each month, and at the end of the tax year, firms can make a claim back tax refunds on the basis of legitimate business costs. For multinational firms wishing to offset business expenses such as trademarks, consultancy or know-how, will have to prove that these are legitimate expenses and not aggressive tax avoidance measures, and that profits flowing from the Polish subsidiary reach the ‘beneficial owner’, rather than an intermediary.

Participants of the meeting expressed concern at the new sanctions that could befall finance directors of Polish subsidiaries who sign off invoices from head office, which could be construed as having hallmarks of profit-shifting.

Krzysztof Ślęzak from the Euro-Park Mielec special economic zone, outlined the new incentives offered by the Polish state to investors looking to set up production in SEZs after the change in the law, making all of Poland one SEZ. The new conditions for eligibility for tax breaks are now more about meeting criteria proving a high degree of value added through innovation, rather than just about job creation within the zones.

Patryk Borzęcki from the European Bank of Reconstruction and Development (EBRD) introduced the bank and its mission to support investment in innovation across three continents. Aerospace is a particularly interesting sector, he said, outlining some case studies of how Polish and international firms have found complimentary loan financing from the EBRD.

To close the substantive part of the meeting, Michael Dembinski BPCC chief advisor gave a short briefing on the current status of Brexit that is to happen in about two weeks time. He outlined the possible scenarios depending on how Parliament votes. The briefing raised a number of questions about logistics from manufacturers who ship aerospace parts and raw materials to and from the UK. Mr Dembinski also advised participants on where to find the latest information on Brexit scenarios and the new formalities that would arise in the eventuality of a hard ‘no-deal’ Brexit.

Then there was time for a factory visit, seeing the precision manufacturing of parts that would eventually end up in aircraft engines.

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