Polish Briefing 26 July, 2017 9:00 am   
Editorial staff

Polish Briefing: New US sanctions. Unemployment at 7.1%

What goes on in Poland on the 26th of July

New US sanctions 

Eight projects in which companies from Europe participate may be encompassed by new sanctions adopted by the United States. The limitations may impact, among others, companies engaged in the construction of the controversial Nord Stream 2 project. Everything depends on the decision of the US Congress on the new sanctions bill, which will punish companies that cooperate with Russia in the energy sector.

The new regulations punish every company that cooperates with Russia not only in the area of construction, but also modernization and maintenance all around the world. This means that every European firm connected to Russian pipelines could become the subject of sanctions.

“That would be brutal,” said Margaritis Schinas, chief spokesman of the European Commission, in an interview for

In his opinion the initiative impacts the EU’s “energy independence and energy security interests.”

The services of the European Commission lobbied in Washington to soften the limitations and prepared a list of eight projects that may be impacted by sanctions. Those include: Baltic LNG (partners: Shell a Gazprom); Blue Stream (Eni and Gazprom); oil pipeline CPC (Shell, ENI and Rosnieft); Nord Stream 1 (European companies and Gazprom); Nord Stream 2 (Shell, OMV, Uniper, Wintershall, Engie and Gazprom); Sachalin 2 (Shell and Gazprom); Shah Deniz and the South Caucasus Gas Pipeline Gazociąg (BP and Łukoil); Zhor deposit (BP, ENI and Rosnieft).

Changes in the government’s 500+ program

“President Andrzej Duda signed a bill that introduces changes in the Rodzina 500+ program,” the President’s Chancellery announced on Tuesday. The bill will, among others, tighten the government program, which supports families, and will make it easier to start a nursery.

The bill is a result of a research of family support systems, which was conducted because the Ministry of Families, Labor and Social Policy was obliged to conduct it in the act that introduced the 500+ program.

The main rules of the program remain the same, but the change will do away with unwanted situations related to the support scheme, e.g. purposeful manipulation of earnings to receive money for the first child, or an untrue declaration that a child is being raised by a single-parent. It will also make some regulations more precise, e.g. those on determining the right to the family benefit for children who are under alternating custody of parents who did not create a family. The bill will also align and make more precise the regulations of the Act on family benefits and the Act on aid for people that have the right to alimony.

Tightening CIT in progress 

A minimum tax on commercial property and a limit on including non-material services to the category of deductible expenses – these are some of the ideas presented by the Ministry of Finance to tighten CIT.

On Tuesday the Ministry of Finance presented some of the propositions on tightening the income tax in 2018. One of the idea is to tax commercial property, which is worth over PLN 10 m.

They commercial property owners would pay PLN 0.042 percent  a month based on the property’s initial value, which according to the ministry, is a hypothetical profit from rental services. The tax could be deductable from PIT.

According to Paweł Gruza, Vice-Minister of Finance this is a response to a problem that is specific to Poland where owners of supermarkets more often than not do not pay the tax income.

Another idea is to limit the possibility of including as a deductible the expenses on non-material services, e.g. advisory. They could constitute a maximum of 5% of the profit, but this solution could not be applied to costs lower than PLN 1.2 m and to the direct cost of producing goods or services.

Unemployment at 7.1%

The unemployment rate in June was 7.1% in comparison to 7.4 % last May, announced the Central Statistical Office of Poland (GUS) last Tuesday. The number of job offers submitted in June was 148.3 thousand. up by 1.6% yoy. GUS’s data shows that 1.152 million Poles were unemployed. Last year we have noticed a drop in the number of the unemployed by 241 thousand.

The number of unemployed people registered at job offices was 1.1516 thousand in comparison to 1202,1 thousand before this month.

According to the estimates prepared by the Ministry of Labor last month the unemployment rate dropped to 7.2%, i.e. was lower by 0.2 % than in May and  by 1.5 percentage points than last year at the same time.

The Ministry of Labor’s research published at the beginning of June shows that the indicator was at 7.2% last month, i.e. by 0.1% less than in May.