The state budget’s gains from the exit tax will be modest 

There is no doubt that the past 2-3 years have brought a pronounced uptick in the number of wealthy Polish citizens changing their place of residence, with particular motivation for such relocation constituted in the very advantageous tax regimes of some EU member states, including Portugal, Cyprus, Malta and – counterintuitively – Great Britain (which holds out non-domiciled resident, or non-dom, status). Seen in this way, the Polish government’s recent moves towards imposition of an exit tax should not come as a surprise. Also, a one-time tax levy on citizens who leave the jurisdiction for good is already in force in a number of European Union countries. Interestingly enough, the idea of the exit tax did not come up in the context of the OECD’s base erosion and profit shifting initiatives, but only in ATAD II of May 2017. All EU countries are to effectively implement some form of exit tax by 1 January 2020. Clearly, the Polish authorities are aiming to be in the vanguard of tax law changes, as demonstrated not only by the recent initiative concerning exit tax, but also by the remarkably rapid ratification of the MLI convention (Poland was among the first five countries to do so).

The general concept of the exit tax is rooted in the legal fiction that, in tax terms, change of the domicile / corporate seat for tax purposes is tantamount to divestment of assets. In its original formulation, the idea of the exit tax referred to tax residency changes by holders of large blocs of shares. Some countries apply exit taxes only to legal entities, others – only to natural persons, and others yet – to both taxpayer categories (Poland, apparently, will be joining this latter category). It is too soon to venture any assessment of the practical effects of this new regulation, but I doubt whether it will translate into any material revenue for the Polish state budget; in my view, the mooted exit tax is more likely to have a “preventive” effect. In this connection, I find myself thinking of the implementation, some time ago, of the general anti-evasion clause to Polish tax law, the practical effects of which have been very modest.

Dr Janusz Fiszer comments on the article by Łukasz Zalewski, "Tax on escapees from Poland and on those who already made the move ".

The entire article (in Polish) is available from Dziennik Gazeta Prawna.