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Solutions for companies

In the face of rising transportation costs and growing environmental awareness, responsible business travel planning is becoming crucial not only from an environmental perspective, but also from a corporate image perspective. What solutions can both companies and employees implement to minimize the impact of business travel on the planet? Here are five suggestions for companies and five tips for employees.

• Sustainable transportation choices. Companies can promote the choice of greener modes of transportation, such as trains, which in Poland are becoming an increasingly comfortable and environmentally friendly alternative to airplanes. It is also worth investing in electric or hybrid car rentals, which reduce carbon emissions. For international air travel, some airlines offer a CO2 offset option, which is a favorable solution for environmentally conscious companies.
• Employee education and technology to support sustainability. Companies are increasingly implementing technology platforms to support travel planning that take into account CO2 emissions for different transportation options. With these, employees can make decisions more easily, choosing transportation with a lower environmental impact. In addition, educating employees about sustainable business travel aims to build environmental awareness and show the benefits of such choices.
• Sustainable accomodation. Choosing the right accommodations is another important step. Eco-certified hotels that use renewable energy sources and conserve water are choices that reduce the carbon footprint of travel. In Poland, more and more hotels are beginning to implement such practices, creating a wide range of environmentally friendly options for companies.
• Remote meetings and travel optimization. Companies can reduce the number of necessary business trips by holding meetings online. Video conferencing technologies make it possible to communicate effectively without traveling, reducing greenhouse gas emissions. Advance travel optimization allows several meetings to be combined into one trip, reducing the number of days in travel and the associated carbon footprint.
• Involvement and foreseeing climate regulations. Governments, including Poland, are increasingly introducing regulations requiring reporting of greenhouse gas emissions associated with corporate operations. Organizations that implement sustainable business travel strategies can not only reduce their environmental footprint, but also prepare for the upcoming regulations, gaining a competitive advantage.

Solutions for employees

• Minimize baggage. When traveling on business, it’s a good idea to take only the most necessary items, which avoids unnecessary excess baggage fees and reduces fuel consumption on airplanes.
• Choosing eco-friendly means of transportation. Whenever possible, it is advisable to choose bicycling, walking or public transportation instead of using cabs or rental cars.
• Taking care to conserve energy in the hotel. When you arrive at the hotel, it’s a good idea to turn off electrical appliances, not to use air conditioning and heating in excess, and to take advantage of the recycling options available at the hotel.
• Choosing eco-friendly meals. Look out for restaurants that offer plant-based, organic or local dishes, which reduces the carbon footprint associated with food production and transportation.
• Conscious use of resources. Conserving water and energy when traveling for business is a simple but effective way to reduce your environmental impact. It’s worth remembering to turn off lights or not to leave appliances on standby mode.

Summary

Sustainability in business travel is a matter of responsibility for both companies and employees. By implementing transportation, accommodation and technology solutions, companies can significantly reduce the environmental impact of their travel. At the same time, employees, by making conscious decisions on a daily basis, can further support sustainability. Through such measures, business travel will become greener and companies will gain a reputation as socially responsible organizations.

VAT rate changes

A new reduced VAT rate of 19% will replace the current rate of 10%. Examples include:

• non-basic foodstuffs,
• domestic electricity,
• catering services (including low-alcohol).

The VAT rate of 5% remains unchanged, but new products have been added to the existing list. The following goods and services, previously taxed at 10%, will now be subject to the 5% VAT rate:

• catering services (without alcohol),
• basic foods,
• medicines,
• medical devices,
• books, newspapers,
• rental accommodation.

These changes, passed on October 18th, 2024, reflect a broader trend among European nations to recalibrate tax policies in response to economic challenges. Businesses operating in Slovakia will need to update their systems and processes to ensure compliance with the new rates.

For more detailed information, refer to the Slovak legislative database.

What is the GPSR Regulation?

The GPSR Regulation aims to introduce stricter rules for the safety of products sold in the EU, especially those offered online. It introduces new obligations for sellers, distributors and e-commerce platforms that address aspects such as:

• Product traceability: every product sold in the EU must have clear information about the manufacturer, importer and possible responsible parties.
• Responsibility for safety: online retailers will have to be sure that the products they offer meet safety requirements even if they do not manufacture them.
• Faster responses to risks: e-commerce platforms will be required to promptly recall unsafe products and report such cases to regulators.

What does this mean for your e-commerce business?

If you run an online store, the new regulations mean you’ll have to adhere to updated regulations. In practice, you may face challenges related to:

• Verifying suppliers and products – making sure goods meet GPSR requires building robust control procedures.
• Adjusting accounting and VAT processes – changes in supply chain or product traceability can affect your tax obligations in Europe.
• New operating costs – having to recall products or comply with local regulations can increase your costs.

How can EFF help you?

As a company specializing in VAT accounting across the EU, we understand that legislative changes such as GPSR can raise many questions. With our experience, our team provides tailored guidance that includes:

• Analysis of your business in terms of new legal and tax obligations.
• Advice on how to reduce tax risks arising from changes in the supply chain.
• Automating your accounting processes so that you can concentrate on business expansion while simplifying compliance.

The GPSR regulation is the next step in building a safer EU marketplace, which at the same time poses new challenges for e-commerce. The sooner you take action, the better prepared you will be for the changes ahead. Connect with EFF to make sure your business is in compliance with the new regulations and avoid unnecessary complications.

What is zero-emission?

Under zero-emission is a comprehensive approach:

• Step 1: minimize emissions at every stage of operations
• Step 2: invest in solutions to neutralize unavoidable emissions

Linking zero-carbon with carbon footprint by scope

Striving for zero-carbon is closely linked to reducing the carbon footprint in all three emission bands defined by the Greenhouse Gas Protocol.

Scope 1 covers direct emissions over which companies have the most control, such as emissions from technological processes or vehicle fleets.

Scope 2 refers to indirect emissions related to purchased energy, where a key element is the transition to renewable energy sources and energy efficiency improvements.

Scope 3, which is the most challenging, addresses the entire value chain, including suppliers, logistics and product usage. A comprehensive approach to reducing carbon footprints in these scopes not only allows companies to move closer to climate neutrality, but also responds to the growing demands of stakeholders and customers, who increasingly expect transparency in emissions reporting.

How to achieve zero-emission in each scope?

Scope 1: Reduction of direct emissions

• Upgrading equipment – replacing boilers or industrial machinery with modern, low-carbon technologies.
• Decarbonizing the vehicle fleet – investing in electric or hydrogen-powered cars and optimizing logistics routes.
• Switching to renewable energy sources – using locally generated energy, such as photovoltaic panels, making it possible to become independent of emissions generated by burning fossil fuels.

Scope 2: Reduce emissions associated with purchased energy

• Purchasing green energy – entering into renewable energy supply agreements (PPA – Power Purchase Agreement) or buying guarantees of origin for RES energy.
• Increase energy efficiency – implement energy management systems (ISO 50001) to monitor and optimize energy consumption.
• Investment in energy storage technologies – the installation of batteries makes it possible to use renewable energy sources also at times of lower energy availability.

Scope 3: Neutralization of emissions in the value chain

• Supplier engagement – selecting partners with sustainable practices and requiring them to report their carbon footprint.
• Closed-loop product design – creating products that are easy to recycle, which reduces emissions associated with the extraction of raw materials.
• Logistics optimization – reducing emissions through efficient transportation planning and use of low-emission modes of transportation.
• Comprehensive waste management – reducing waste during production and investing in waste treatment technologies.

Zero carbon as the future of business

Data from organizations that monitor climate action, such as the Carbon Disclosure Project (CDP) and the Science Based Targets Initiative (SBTi), indicate that companies are increasingly committed to zero-carbon strategies. More and more companies are taking action to reduce emissions, setting goals in line with science and global standards. Statistics show that both multinational corporations and smaller organizations are implementing climate strategies, aligning with regulatory requirements and stakeholder expectations. Industries such as energy and heavy industry, known for their high emissions, are investing heavily in decarbonization, while service sectors are focusing on optimizing indirect emissions in supply chains. These moves underscore that the pursuit of climate neutrality is becoming an increasingly common element of business strategies, reflecting growing climate awareness and the need to address new market challenges.

Sale of real estate and VAT

VAT in real estate transactions covers a broad spectrum of issues that relate to both the general rules for taxing these transactions and special cases of exceptions and exemptions. The most important thing is to understand which transactions are subject to VAT, and when the personal property tax (PCC) or personal income tax (PIT) should be applied.

General principles of VAT taxation

The basic principle is that the supply of real estate for consideration is generally subject to VAT. Normally, the seller of commercial real estate must charge VAT. However, there are a number of situations that may affect the application of this tax, including the first settlement of the building or the period that has elapsed since that settlement. If less than two years elapse between the first settlement and the delivery of the building, the transaction is subject to VAT. On the contrary, if this period is longer, the supply may be exempt from VAT, as long as no significant improvements have been made to the building that account for at least 30% of its initial value.

VAT rates and place of taxation

VAT rates may vary depending on the type of transaction and the location of the property. In international cases, it is important to determine the place of supply of services. In the European Union, the place of taxation depends on the location of the property, but the rules can vary depending on the details of the transaction and the tax status of the parties.

VAT exemptions

It is worth noting that not all real estate transactions are subject to VAT. For example, the sale of real estate may be exempt from VAT if it was purchased for personal use by an individual buyer. These exemptions also apply to real estate that has not changed hands for two years after initial occupancy.

PCC tax vs. VAT

Typically, when a property is sold on the secondary market by a person who is not registered as an active VAT payer, the transaction may be subject to PCC rather than VAT. The PCC is calculated based on the market value of the property and is usually 2%. It is payable by the buyer and is usually collected by the notary when the transaction is finalized.

International settlements

In the context of international transactions, VAT can be deducted by the purchaser depending on the nature of the transaction, such as WNT (Intra-Community Acquisition of Goods) or import of services. It is important that the goods and services are used for taxable activities in order for the purchaser to exercise the right to deduct VAT.

What are tax havens?

Tax havens offer foreigners and foreign companies attractive tax conditions that include low or zero tax rates, as well as a high degree of financial confidentiality. Countries such as Antigua and Barbuda, Belize, Grenada, Jersey, the Cayman Islands, the Principality of Andorra, the British Virgin Islands and the Kingdom of Bahrain use liberal laws to attract foreign capital that would otherwise be taxed in the investor’s home country.

However, not all countries offering low taxation can be classified as tax havens. Germany and the United States, for example, despite strict financial secrecy, have relatively high tax rates, effectively eliminating them from this category according to the most widely accepted definition.

Tax havens, while bringing economic benefits to investors and entrepreneurs, simultaneously generate serious challenges for the global financial system. It is estimated that through the use of tax havens, global capital of between $9 trillion and more than $32 trillion is hidden from the tax authorities, resulting in huge losses for national budgets, which cannot tax these funds. Poland, for example, loses about 3 to 4 billion zlotys a year from moving profits abroad.

In response to these challenges, many countries, including Poland, have introduced legislation to limit the misuse of tax havens. In 2019, the Ministry of Finance presented a list of 26 countries and territories that were deemed to use harmful tax competition. These countries, such as Andorra, Bahrain and Panama, are on the so-called Black List, meaning that income earned in these jurisdictions does not enjoy foreign tax credits in Poland, which is expected to discourage Polish taxpayers from transferring profits to these places.

The European Union has also taken steps to regulate tax practices, based on the principle of transparency and international cooperation. Thanks to these initiatives, many countries have amended their tax laws to bring them in line with the standards adopted by the EU.

At the corporate level, tax havens are mainly used to create complex corporate structures that allow profits to be shifted to low-tax jurisdictions. For example, a company can sell its products to a subsidiary company registered in a tax haven at production prices so that it officially does not make profits that would be taxed in its home country. The subsidiary then sells these products on the international market at higher prices, generating profits that are not taxed in the home country.

Another popular way to minimize the tax burden is to sell licenses or copyrights to subsidiary companies in tax havens for amounts far exceeding their actual value, thereby significantly reducing the tax base.

In the context of individual taxpayers, tax havens also offer opportunities for those working abroad who want to minimize their tax obligations. However, taking advantage of these opportunities requires careful tax planning and an understanding of the regulations in both the country of origin and the country where the income is generated. In Poland, for example, the foreign relief (abolition relief) avoids double taxation, but does not cover income earned in blacklisted countries.

Implementing ISO 9001:2015

Implementing a standard in an organization may face some challenges, such as resistance from employees to the changes being made, or additional costs to implement and maintain the system. The key, however, is to understand the benefits of certification, which can lead to long-term success.

A certified organization not only enjoys increased customer confidence in international markets, but also improves its operational efficiency through better organization of processes, their continuous monitoring and improvement. ISO 9001 certification is recognized worldwide and is very often required by international contractors. The implementation of a QMS based on this standard broadens an organization’s horizons to new markets. Organizations operating in accordance with ISO requirements are better prepared to manage risks and to adapt to changing stakeholder requirements.

ISO 9001:2015 is a flexible tool that can be applied to manufacturing companies, as well as service industries providing services including financial, health, IT, education and many others. By following the standard’s seven principles, which are:

• Customer-based approach
• Leadership
• Engagement of people
• Process approach
• Continual improvement
• Evidence-Based Decision Making
• Relationship management

They assure their clients of, among other things, regulatory compliance of services provided and minimization of financial risks, the provision of quality patient care, the delivery of quality services and products (software, project management, or technical support), and, in the case of the education industry, the pursuit of excellence in education.

EFF has had the privilege of belonging to the group of certified organizations since May 2020 and reaping the benefits. Thanks to our interdisciplinary team, we managed to independently implement a Quality Management System based on ISO 9001:2015. Receiving the approval of an independent certification body as well as verifying the highest quality of accounting and financial reporting services we provide, was a source of great pride and joy for everyone involved.

Body Leasing or Personnel Outsourcing?

The term personnel outsourcing is very often used as a synonym for the term body leasing, but these services are considerably different. In outsourcing, a whole process or set of tasks is transferred to the suppliers, who then take up the related responsibility and control over the process or department entrusted. Body leasing means outsourcing specialists, when control over the “leased” employee and his or her tasks or duties remains with the client company.

The formula behind a back-office partnership is rather simple and straightforward to implement. The contractee only has to define the scale and nature e of the project in question, whether it’s long-term engagement or just a short-term one, seasonal demand, or support of a temporary backlog. With the services provided by EFF, the clients can engage both individual specialists and entire teams created for a given project.

Advantages of Personnel Outsourcing

In practice, companies outsource personnel to meet a variety of needs, but most often it is for short-term challenges, as it provides a number of advantages and does not involve the hassle of a long recruiting process. In personnel outsourcing, highly specialized skills can be secured for certain periods, which can range from a few days to a few months based on requirements defined by the specified project.

The “hired” people or team engage only for the duration of the project, meaning fixed costs regarding these employees are borne by the supplier. In other words, this means considerable savings on the part of the hiring company because it incurs no resultant staffing obligations.

All monthly employment-related costs, including wages, contributions, and taxes, are taken by the external provider.

Does the Polish law allow back-office partnering as a form of employment?

Polish law allows for the leasing of employees, which is based on providing for the employee’s unpaid leave for the purpose of performing work for another employer. Even though there are no separate legal provisions concerning such cooperation, the provisions of service contract are applicable.

The back-office is a partnership agreement in which an agency provides another company with its human resources on an outsourcing basis. Here, the focus would not be on the outcome but rather on providing a specialist as needed.

Personnel outsourcing and temporary staffing are only a fraction of services available at EFF. We also offer flexible pricing to meet the needs of clients for instances, fixed annual availability fee, and an hourly rate for months when the services are used. Seasonal challenges, such as staffing for vacations, are effectively managed with our solutions. Many companies that start deploying the services of EFF for short-term staffing remain long-term clients once efficient process management and adaptable organizational solutions are experienced.

Standard VAT rate

• the current rate in effect until August 31st 2024: 24%
• the new rate, which will take effect on September 1st 2024: 25.5%
• goods and services subject to specific VAT rates: applies to all goods and services for which no exemption or one of the reduced VAT rates is applied.

Reduced VAT rate

• the current rate in effect until August 31st 2024: 14%
• the new rate, which will take effect on September 1st 2024: 25.5%
• goods and services subject to specific VAT rates: applies to the particular food items high in sugar (chocolate, sweets).

Reduced VAT rate

• the current rate in effect until August 31st 2024: 14%
• the new rate, which will take effecton September 1st 2024: 14%
• goods and services subject to specific VAT rates: applies to catering and restaurant services

Reduced VAT rate

• the current rate in effect until August 31st 2024: 10%
• the new rate, which will take effecton September 1st 2024: 10%
• goods and services subject to specific VAT rates: applies to pharmaceutical products, accommodation, books and cultural events.

Please be advised that the Finnish government has also updated the VAT return form. The new declaration (online form) will include boxes for transactions at both current and future VAT rates, which will be effective from 1 September 2024.

It is also worth keeping in mind that the Finnish Government is considering reclassifying products subject to the 10 and 14% rates. Any changes would be planned for 2025. We will keep you updated on any changes and decisions made. 

The official guidelines for VAT rates in Finland can be found at this website.