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Poland: Tax on Metal Exploitation Introduced

(Apr. 12, 2012) Poland's new Law on Taxation of Extraction of Certain Metals of March 2, 2012, was published in the country's Official Gazette (DZIENNIK USTAW RZECZYPOSPOLITEJ POLSKIEJ) on April 3, 2012. The Law affects individuals, companies, and entities without legal personality who extract copper or silver ore in Poland. It will enter into force two weeks after the date of publication, on April 17, 2012. (Magdalena van Doorn-Olejnicka, Poland: Tax on Metal Extraction Introduced, TAX NEWS SERVICE, International Bureau of Fiscal Documentation (IBFD) (Apr. 5, 2012); Ustawa z dnia 2 marca 2012 r. o podatku od wydobycia niektórych kopalin [Law of Mar. 2, 2012, on the Tax on the Extraction of Certain Minerals], 362 DZIENNIK USTAW [Official Gazette] (Apr. 3, 2012).)

There are separate tax rates for the two metals, expressed per kilogram for silver and per ton for copper. The rates are published annually in the Polish Monitor (Monitor Polski) by January 20. The tax basis is computed mainly with reference to the worldwide average commodity price of silver and copper in U.S. dollars, converted to Polish zloty at the applicable exchange rate provided by the Law, and therefore, is a tax on windfall profits derived from mining the two metals. (van Doorn-Olejnicka , supra; Mineral Extraction Tax – Law Published [in Polish, title machine translated], LEXPOLONICA (last visited Apr. 10, 2012).)

Minimum and maximum amounts of tax per kilogram of silver and ton of copper are provided for by the Law, with the rates ranging from a minimum of 0.5% (cut back from a previously proposed 1%) to a maximum of about 35%. (van Doorn-Olejnicka, supra; Mineral Extraction Tax – Law Published, supra.) The maximum tax rates have been set at 16,000 zloti per ton for copper (about US$5,022) and 2,100 zloti per kilogram for silver (about US$659). The formulas for calculating the tax are set forth in article 7 of the Law. (Mineral Extraction Tax – Law Published, supra.)

The Law stipulates that taxpayers must calculate and pay to the competent customs authorities the tax due, and sets the extraction tax payment deadline as “the 25th of the month following the month in which the metal was extracted.” (van Doorn-Olejnicka, supra.)