The system of taxation of small business: the experience of Poland

Abstract

Small and medium-sized businesses (SMEs) play a significant role in the economies of various countries. In developed countries, the SME sector is the most numerous and prominent contributor to budget revenues. Poland is one of the developed countries and one of the closest neighbouring countries of Ukraine, which has a successful experience in developing small businesses. The Ministry of Finance of Ukraine and the International Monetary Fund are considering the possibility of implementing foreign forms of taxation, and the Polish model was taken as a model for Ukraine. This article includes research and review of works by domestic and foreign authors on the essence of small and medium-sized businesses in the Republic of Poland, key economic indicators, and interpretation of differences in concepts between Ukrainian and Polish legislation. The article examines the role of SMEs in the formation of Poland's GDP; considers the forms of SMEs in the Republic of Poland; studies various available forms of taxation of SMEs in Poland; provides examples of tax calculations, and compiles a generalized table of rates of various forms of taxation. These results can be used for further research and the development of adaptive taxation options for Ukrainian legislation, as small businesses are currently underdeveloped in Ukraine compared to other countries. The simplified system, which was designed to develop small and medium-sized businesses, today serves more as a way for large businesses to avoid paying taxes, has a number of shortcomings and needs to be improved. The conclusions suggest taxes and benefits from the Polish model that can be implemented in Ukraine as the most appropriate and valuable in terms of increasing the number and development of small and medium-sized businesses, which is currently necessary for economic recovery and prosperity in the country in the future.