Poland

The KWKR team advised DOV Starter (Digital Ocean Ventures Starter) on its first investment, supported by the European Funds for a Modern Economy (FENG), in Flathub sp. z o.o. – the company behind Gaius-LEX, an AI-powered legal assistant designed to support lawyers and law firms.   The total transaction value amounted to approx. PLN 1.85 million. The round also included a co-investment by business angel Vladyslav Muzhylivskyi, PhD. The funds will be used to support the further development of Gaius-LEX in both Poland and international markets.   KWKR provided comprehensive legal support to the fund at every stage of the transaction – from legal due diligence through the preparation and negotiation of investment documentation to transaction closing. The project required close cooperation with the DOV investment team, the company’s founders, and legal counsel representing Flathub. It also involved collaboration across various internal teams at KWKR and an in-depth understanding of the legaltech sector and AI-related regulations in the legal industry.   The KWKR team involved in the transaction included experts from the corporate practice: partner Paulina Opiełka, senior associate Paweł Machowski, associates Katarzyna Mikosz, Dominik Korybalski, and Kamil Stengert, as well as junior associates Sandra Murdzek and Maciej Ziemiański (all from the corporate team). The project was also supported by associate Anna Bartosiak (compliance), associate Joanna Kik (TMT), and intern Milena Taciuch from the corporate law team.   The founders and Flathub were advised by the law firm The Heart Legal.   This transaction marks the first investment by the DOV Starter fund and reflects the global trend of increasing investment in AI-based legal solutions. According to publicly available forecasts, the legal AI market is expected to grow from USD 1.4 billion to USD 3.9 billion by 2030.   What sets Gaius-Lex apart in the legaltech space is its use of lightweight, local sLLM models instead of large cloud-based language models. These models can be run directly on the client’s infrastructure, significantly enhancing data security by eliminating the need to send sensitive legal information to external systems.   Bogdan Setlak Marketing specialist [email protected] +48 504 034 729  

The Polish Deposit and Return System launches on 1 October. This is a real revolution for businesses, whether they are producers, importers, distributors or traders. Indeed, its implementation brings with it a number of challenges, including, perhaps less obviously, concerning VAT. Here is a brief guide to the most important issues relating to the Polish Deposit and Return System. Legal basis and objectives of the Deposit and Return System The Polish Deposit and Return System is primarily based on the Act on the Management of Packaging and Packaging Waste of 13 June 2013, the Waste Act and numerous implementing ordinances, which regulate, among other things, the deposit amounts, the levels of separate collection, the obligations of operators, entities placing packaging on the market and traders, and the rates and rules for the payment of product fees or the design of labels. The main objectives of the system are to: Reduce the amount of packaging waste entering the environment Promote recycling and a circular economy Encourage consumers to return packaging and packaging waste through a deposit mechanism Achieve the packaging collection rates required by the EU (77% between 2025 and 2028 and 90% from 2029) What packaging is covered by the deposit and return system? Single-use plastic (PET) beverage bottles up to 3 litres Aluminium and steel beverage cans up to 1 litre Reusable glass beverage bottles up to 1.5 litres All these types of packaging will have to be labelled accordingly. System participants and their key roles The deposit and return system involves a number of actors, each with specific roles and responsibilities. Deposit mechanism: how does it work in practice The deposit is a specific amount charged when a product is sold in packaging covered by the system. The amount is set by the implementing ordinance. The deposit per unit of packaging for: Single-use plastic beverage bottles with a capacity of up to three litres, including their plastic caps and lids, excluding glass or metal beverage bottles with plastic caps and lids, shall be PLN 0.50 Metal cans with a capacity of up to one litre shall be PLN 0.50 Reusable glass bottles with a capacity of up to one and a half litres shall be PLN 1.00 The deposit “follows the product”: It is collected at each stage of distribution – from the company placing the product on the market to the wholesaler, the retailer and the consumer Return of the deposit: The consumer is refunded the full amount of the deposit when the empty, undamaged packaging (or packaging waste) is returned to a designated collection point (usually a shop) Deposit and product price: Importantly, the amount of the deposit is not included in the VAT base of the product price Placing on the market vs. sale These are two different concepts, which also have different implications with regard to the deposit and return system: Placing on the market: This is the first making available of a packaging or a packaged product on the territory of a country (domestic production, import, ICA) for use or distribution Sale: This is the seller’s obligation to transfer ownership of the goods (packaged product) to the buyer and to deliver the goods, and the buyer’s obligation to collect the goods and pay the price to the seller. The mere physical placing of packaging on the domestic market does not in itself give rise to an obligation to collect a deposit. This obligation arises when a product is sold in packaging covered by the deposit and return system. Tax aspects of the Polish Deposit and Return System – challenges and solutions Businesses have many questions and concerns about tax issues, especially VAT. Deposit and VAT – key principles Deposit charged on the sale of a product: as mentioned above, the deposit does not increase the VAT base of the product itself, being treated as an amount not subject to VAT at the time it is collected VAT on unreturned deposits: This is a more complex situation. The deposit on packaging that has not been returned by consumers, i.e. the deposit that has not been refunded to them, is subject to VAT: The company that places the packaged products on the market is the VAT  payer The operator of the deposit and return system is the VAT remitter VAT settlement and tax records: The operator (remitter) calculates the difference between the value of the deposits on packaging placed on the market and the deposits on packaging returned during the calendar year. On the basis of this difference, the operator remits the VAT due to the tax office. The deadline for payment is 31 January of the year following the settlement year The entity placing packaged products on the market (taxable person) increases the tax base in its VAT return (JPK_V7) for the first tax period of the year following the year to which the deposit settlement relates by the amount of the difference between the deposit on the packaging placed on the market and the deposit on the packaging returned during the calendar year in question Both entities are required to record the data necessary to establish the tax base and to keep it for a period of 5 years from the end of the year for which the tax base is established, resulting from the difference between the value of the deposit collected for packaging covered by the deposit and return system and placed on the market in that year and the value of the deposit refunded for packaging or packaging waste covered by the system in that year. As a result, the rules are unclear as to whether VAT should actually be charged only on deposits that are not returned. According to the literal wording of some of the provisions, the difference between the value of the deposit on packaging placed on the market and on packaging returned in a given calendar year should be taken into account, although placing on the market does not necessarily imply sale and collection of the deposit. Recording, reporting and checking Tax records are not the only record-keeping requirement under the deposit and return system. The system requires participants to fulfil other record-keeping and reporting obligations. Entity placing packaging on the market: Must keep detailed electronic records of, inter alia, the number, type and value of deposits collected for packaging placed on the market and the number, type and value of deposits refunded for packaging returned in a given year. These records must be kept for 5 years Operator of a deposit and return system: Should also keep detailed records of packaging collected, deposits refunded and waste sent for recycling. The operator should submit annual reports to the province marshal (marszałek województwa) (by 15 March) and to the head of a commune (wójt) or mayor (burmistrz or prezydent miasta) (by 31 January). Commercial entities (collection points): Also required to keep records of deposits collected and refunded and of packaging collected Polish Deposit and Return System – what else to consider There are concerns that by undercutting rates, operators will try to pass on some of the costs of running the system (e.g. the handling fee) to wholesalers and shops. The problem is the lack of precise rules in this regard. Another important issue is the financing of the refund of the deposit by shops. Retailers will have to refund the deposit to consumers “in advance”, and settlements with the operator will be made on a monthly basis. This means that they will have to temporarily fund the deposit refund from their own resources, which may be problematic for smaller operators. Implementing the system also requires extensive preparation: adapting IT systems, logistics, accounting, training staff and informing customers. The selection of an operator and the negotiation of contract terms will be key. Summary The Polish Deposit and Return System is an ambitious project with the potential to make a real difference to the environment. However, its success depends on the seamless functioning of all its components, including clear and workable tax settlement rules. Our recommendations to companies Analyse now how a deposit and return system could affect your business Allow time to adapt your IT, accounting and logistics systems Monitor the process – bear in mind that individual implementing regulations may change Contact potential system operators, ask for quotes and carefully consider the terms and conditions of cooperation If you have any doubts about taxation, consider applying for an advance tax ruling, either yourself or with the help of specialists The implementation of a deposit and return system is a dynamic process that is constantly changing, so keep up to date and seek expert assistance.

PIB Group Poland has been present in Poland since 2020. From that time, it has continually made acquisitions, building a strong group of insurance intermediaries. Its portfolio already includes insurance brokers, reinsurance brokers, multi-agencies and specialised entities operating as MGAs (Managing General Agents). We recently advised the Group on another transaction – the acquisition of RCU Ubezpieczenia and Ramius. This is another important step in the company’s development and implementation of its plan to consolidate the Polish insurance intermediation market. With this merger, PIB will gain new synergies and expand its range of services. RCU Ubezpieczenia and Ramius are well-established companies with a unique business model and a strong brand. Their integration into the PIB Group is another milestone in the development of our organisation and in building a powerful group of insurance intermediaries in Poland, says Bartosz Słupski, CEO of PIB Agency. The project was handled by Paweł Cholewiński, Partner and Head of the Transactional Practices Group, Natalia Kotłowska-Wochna, Partner in the New Tech M&A Practice, and Adam Czarnota, Senior Associate in the Corporate Law and M&A Practice. It is a great honour for us to have provided legal services to PIB Group Poland. This transaction fits perfectly with the consolidation trend we are seeing in the Polish insurance intermediation market. Due to the extensive network of RCU intermediaries and unique cooperation models, the structuring of this acquisition required us to translate the client’s business objectives into transactional documentation. We are proud to have worked with the PIB Group Poland team on this project and to have helped the client achieve its objectives, said Paweł Cholewiński, Partner, Head of the Transactional Practices Group / Real Estate, M&A. Our advisory services included a due diligence investigation of the companies, structuring of the transaction, and drafting and negotiation of the project documentation. The transaction required consideration of not only legal issues but also the specific nature of both businesses in order to develop the optimal solution. Advising on this deal was an interesting opportunity to learn about the business realities of the insurance market, added Natalia Kotłowska-Wochna, Partner in the New Tech M&A Practice. The seller was represented by Andersen Tax & Legal Srokosz i Wspólnicy and cc group as financial advisor.

3 April 2025 | Knowledge, News Over the past two years, we have seen a significant increase in the number of M&A deals involving companies based on artificial intelligence or using AI components. First of all, at the global level, both the number and value of transactions involving AI companies are growing. Even in our domestic market, the highest ranking of the top 10 Polish start-ups in 2024 were AI-related companies. This shows the dominance of such companies in the market, notes Natalia Kotłowska-Wochna, attorney at law and Head of the New Tech M&A Practice. According to Aventis Advisors, in 2025, the number of AI acquisitions will exceed 400, with a cumulative annual growth rate of 26%. The US accounts for approximately 38% of all global acquisitions in the AI sector (2022-2024), due to the concentration of major innovators and technology companies in this market. In terms of the number of large acquisitions, the situation in Poland is similar to the global one, but Polish managers show a less ambitious approach. According to PWC’s “CEO Survey. Time for Reinvention”, as many as 46% of Polish CEOs are not planning any acquisitions in the next three years. By comparison, the global figure is 30%. Impact of the AI Act on investment decisions Will new regulations such as the AI Act affect investor interest in companies using artificial intelligence? I think that for the time being, the regulatory risks associated with AI do not have a determining influence on the decisions of private equity funds. Of course, this is one of the elements taken into account, but is not the main factor, emphasises Natalia Kotłowska-Wochna. In addition to the standard company assessment, which includes regulatory and technological issues (such as personal data protection, cyber security and intellectual property), there is now a completely new element – compliance with the AI Act. AI in transaction processes Artificial intelligence is not only the subject of transactions, but also a tool used in M&A processes. According to DealRoom, within the next three years, 80% of M&A processes will use AI at various stages of the transaction – from identifying potential targets, through due diligence and financial analysis, to post-merger integration. Polish law implementing the AI Act In February, the Ministry of Digital Affairs presented an amended draft of the Artificial Intelligence Systems Act, which includes changes to the rules for monitoring the safety of products and services, as well as solutions to support innovation. The new draft also provides for the establishment of a regulatory sandbox, i.e. a space for testing new solutions. I think the amendments to the AI Systems Act are going in the right direction, and the final regulations are expected to be published in the first quarter of this year. We have a lot of experience, for example in the context of personal data protection, where regulations have already been introduced in a similar way […]. So I think these regulations will also be positive. Nevertheless, it is worth waiting for the final versions of the drafts, which will be published soon, comments Natalia Kotłowska-Wochna. Companies’ preparation for new regulations How are Polish businesses preparing to comply with new regulations? It seems that the degree of readiness varies and depends on the size of the companies: Large companies (especially those with foreign capital) – advanced preparation, in line with the company’s overarching policy Smaller companies – slower process, preparation of documents and procedures and implementation of compliance is not a priority At this point, I think there will still be a lot of companies that will not be fully prepared for these regulations, especially since we still don’t know exactly what approach the regulators will take – says the head of our New Tech M&A Practice. Mapping responsibilities in light of the AI Act Under the AI Act, any company that develops, sells, uses or provides an artificial intelligence system must comply with certain requirements. Each company should therefore map its responsibilities in this regard by: identifying tools that have an AI component assessing tools to determine whether they meet the definition of an AI system classifying tools according to risk level (prohibited, high, limited or minimal) determining the scope of responsibilities and adapting to those responsibilities The definition of an AI system is a key issue that we as lawyers are now focusing on. It contains six mandatory requirements and an optional one. It can be difficult to assess whether a given tool is an AI system because the definition is based on technical aspects such as the degree of autonomy or automation, explains Natalia Kotłowska-Wochna. Challenges and opportunities for start-ups For innovative start-ups, which often develop new AI tools themselves, the regulations represent both a challenge and an opportunity: Start-ups that want to launch AI-based tools on the market need to be properly prepared in terms of procedures and documentation. In particular, if such start-ups want to attract investment, they must be prepared to have their system audited for compliance with regulations that will come into force in the near future, emphasises Natalia Kotłowska-Wochna.