Poland’s New Pitch to Brexiting Bankers: Pay Higher Taxes

After Britain voted to Brexit, Polish leaders lustfully eyed the thousands of finance jobs that might leave London, expecting banks to embrace their country for its eager young workforce, inexpensive office space, and fast-growing economy. Now, Poland is adding a less welcoming element to the pitch: higher taxes for many of the people who might fill jobs imported from the U.K.

The lower house of parliament on Nov. 24 approved a bill that would remove a cap on social security contributions for salaries topping 127,890 zloty ($36,000) per year, saddling them and their employers with additional levies. That could boost costs for banks such as JPMorgan Chase & Co, UBS Group AG and Goldman Sachs Group Inc. that have said they’ll shift some operations to Poland.

The proposal is “a red light” for companies considering investments in the country, according to the Association of Business Service Leaders, an industry group whose members — including Google, HSBC Bank Plc, and Orange Poland SA — employ more than 150,000 people in Poland. The association said the law would affect about a third of its companies’ employees in jobs such as accounting and technology and more than 60 percent of those in research and development.

The organization says the bill is being implemented too hastily, with the proposal surfacing only in October, after many companies had prepared their financial plans for 2018. The hurry-up schedule is “proof that the government is ignoring the needs of entrepreneurs who create valuable jobs,” the group said in a statement.

The bill must be approved by the Senate, which reconvenes on Dec. 5, and signed by President Andrzej Duda, who hasn’t yet weighed in on the issue. In presenting the measure to parliament, the Labor Ministry said it would increase fairness in society and “ease tensions created by the market economy.” Deputy Labor Minister Marcin Zieleniecki said it was important to get the law on the books in time to be implemented for 2018. And he said businesses will be able to adjust because in early months social security charges will be deducted as usual, so “most of the impact will come in the second part of the year.”