The current situation on the labour market has forced employers to look for new methods of remunerating employees. The basic salary for a job is no longer the primary determinant of the employee’s choice of work. Currently, the growth popularity of incentive programs prepared by the employer is noticeable. Paweł Dyrduł, lawyer from KG Legal Kiełtyka Gładkowski Sp.p, based in Krakow, discusses the issue of incentive programs in the context of tax optimization.

What are incentive programs?

The incentive programs that an employer creates are usually financial instruments. Very often these are simply shares or derivatives. The employee (beneficiary) has the possibility to purchase the financial instrument on preferential terms, for a nominal fee or free of charge. The beneficiary is usually a member of the management team. The financial instrument he acquires grants him the right to receive cash in the future. Generally, the amount of benefits received depends on the economic performance of an enterprise, such as the achievement of specified value of EBIT (operating profit). At the end of the period for which the financial instrument (incentive program) was issued, it is settled. Settlement is simply the payment of cash due to the employee. So the employee receives cash, which in a very simplistic way can be called as bonus.

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Understanding the proxy as a special kind of power of attorney and the common practice of establishing it should not create problems. However, as the practice shows, entrepreneurs (especially foreigners) encounter problems with establishing a proxy. Paweł Dyrduł, lawyer from law firm KG Legal Kiełtyka Gładkowski Sp.p, based in Krakow, discusses the essence and basic regulations related of the proxy.

The essence of the proxy

One of the principles adopted in Polish civil law is the principle that any legal act can be done through a representative. Exceptions in this respect may be provided by a law or legal action specifics. As a rule, the legal action performed by the representative on behalf of the representative produced effects directly on the latter.

Analyzing the provisions of the Civil Code, we will find a separate chapter dedicated to the proxy (Articles 109¹ – 109⁹). Polish law treats the proxy as a special type of power of attorney granted by an entrepreneur subject to compulsory registration in the register of entrepreneurs. The represented person (the principal) enters into an agreement with a procurator under which he authorizes him to engage in court and extrajudicial activities connected with running the business. This means that a proxy is a commercial power of attorney on the basis of which the procurator represents the company in most situations.

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Legislate by the European Parliament and the EU Council the General Data Protection Act is designed to unify and harmonize the rules on this issue in the Member States. The implementation is scheduled to take place by May 25, 2018. It is therefore worth noting the new provisions, obligations and sanctions that are associated with the adoption of the new law. Paweł Dyrduł, a lawyer from KG Legal Kiełtyka Gładkowski Sp.p with its registered office in Krakow, analyzes the above issues.

What is the GDPA?

GDPA is an abbreviation of the General Data Protection Act. This is a legal act adopted by the EU legislature, which, as the name implies, is aimed at regulating the issue of broadly defined personal data. The official text of the Regulation was published in the Official Journal of the European Union on 4 May 2016. However, the entry into force of the provisions contained in the Regulation was adopted on 25 May 2018. The Member States of the European Union are obliged to implement the provisions contained in the Regulation by 6 May 2018. The implementation of the provisions of the EU legal act will generally be followed by the adoption of relevant national Legal acts.

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It is the debtor’s responsibility to regulate obligations. Generally, it can be stated that the obligations are regulated every day and at any time. The universality of this process creates the need to draw attention to the rights and obligations of the parties. Paweł Dyrduł, a lawyer from KG Legal Kiełtyka Gładkowski Sp.p with its registered office in Krakow, discusses the principle of balancing the debtor’s payments and the exceptions provided for by Polish law.

Principle of the debetor’s will

The issue of balancing debtor’s contributions in Polish law does not appear to be a major problem. The legislator, by constructing the provisions of the Civil Code, has adopted the principle that the debtor has the right to indicate what obligation he pays the payment. However, this entitlement is only due to him if the conditions laid down in art. 451 Civil Code premises. The first is to own several debts of the same kind, and the second is that payment have to repay the same creditor. The multiplicity of debts is to be understood as the obligation of the debtor in a single obligation relationship. The obligations owed by the debtor should have the characteristics that mark them as separate obligations, so their regulation in the law should be equated with the fulfillment of various benefits. When these conditions are met, the debtor will have the right to indicate which debt he repayes. The debtor can communicate to the creditor his will in any form. As a rule, the creditor has no right to oppose the will of the debtor, cannot refuse to fulfill his will. However, when it is allowed to fall into a delay.

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Purchasing an organized part of an enterprise is a capital-intensive venture. Hence the buyer must take a number of steps to assess the profitability of such an investment. He must also be aware of the possibility of taking responsibility for the obligations. Pawel Dyrduł, lawyer from law office KG Legal Kiełtyka Gładkowski Sp.p with its registered office in Krakow, discusses the issue of disposal and purchasing an organized part of the company.

The organized part of the enterprise

To define, find out what the organized part of the business should be starting with the general definition of the company, which is contained in Article 55¹ of the Civil Code. An enterprise is an organized set of intangible and tangible components designed to run a business. These compositions include in particular: the name of the company, real estate and movables, acquired rights, claims, cash, licenses, licenses, permits, patents, business secrets, accounting records, documents and other components. The above definition (rule) explicitly states that an enterprise is intended to run a business.

On the basis of the definition of the company, the conclusions on the definition of its organized part can be drawn. Simply put, an organized part of the enterprise will be its separated part, which will holds own set of intangible and tangible components.

A similar thinking had the legislator constructing the provisions of the Personal Income Tax Act and the Law on Value Added Tax. In both of these laws (Article 5a (4) of the PIT Act, Article 27 (27e) of the VAT Law), there are very similar definitions of an organized part of an enterprise. An organized part of an enterprise is an organizationally and financially independent group of tangible and intangible assets, including liabilities, that are intended to carry out specific economic tasks, and which at the same time could be an independent undertaking performing these tasks independently. It is worth noting that this organized part can be a de facto separate enterprise.

The organized part of an enterprise cannot in principle be a future thing. When it comes to it, when the buyer decides to buy, it must already exist in the structure of the company, i.e. it must be separated.

Purchasing of an organized part of an enterprise also has an effect on its affiliation.

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