Polish IP & IT law – copyright trademark computer internet telecomm

Archive for: open standards

Access to public information, case II SAB/Wa 10/13

August 8th, 2013, Tomasz Rychlicki

A Polish company requested the Ministry of Interior to disclose public information in the form of source code of software that is used by the Ministry in performing public tasks related to Voivodeships’ databases of citizens residence. The source code of a computer application was written by employees of the Ministry as part of their employment contracts. The Ministry did not answer the request and the Company filed a complaint on failure to act.

The Voivodeship Administrative Court in its judgment of 24 April 2013 case file II SAB/Wa 10/13 dismissed it. The Court ruled that according to the provisions of Article 1(1) of the Polish Act of 6 September 2001 on Access to Public Information – API – (in Polish: Ustawa o dostępie do informacji publicznej), published in Journal of Laws (Dziennik Ustaw) No. 112, item 1198, with subsequent amendments, each information on public matters constitutes public information in the understanding of the API and is subject to being made available on the basis of principles and under the provisions defined in this Act. The definition of “public information” is widely criticized for defining ignotum per ignotum. However, Article 6(1) of the API helps to clarify this problem.

Article 6. 1. The following information is subject to being made available, in particular on:
1) internal and foreign policy, including:
a) intentions of legislative and executive authorities,
b) drafts on normative acts,
c) programmes on realisation of public tasks, method of their realisation, performance and consequences of the realisation of these tasks,
2) entities, defined in Article 4, it. 1, including:
a) legal status or legal form,
b) organisation,
c) subject of activity and competencies,
d) bodies and persons performing functions therein and competencies,
e) property structure of entities, defined in Article 4, it. 1, points 3-5,
f) property they dispose of,
3) principles of functioning of entities, defined in Article 4, it. 1, including:
a) mode of conduct of public authorities and their organisational units,
b) mode of conduct of state legal persons and legal persons of local authorities in the area of performing public tasks and their activity within the frames of budget and non-budget economy,
c) methods of passing private-public acts,
d) methods of accepting and settling matters,
e) state of accepted cases, order of their settling or resolving,
f) conducted registers, books and archives and on methods and principles of making data there contained available,
4) public data, including:
a) contents and form of official documents, in particular:
– contents of administrative acts and other resolutions,
– documentation on the control and its effects as well as presentations, opinions, conclusions and statements of the entities having conducted the control,
b) opinion on public issues made by the bodies of public authority and by the public officers in the understanding of the provisions of the Penal Code,
c) contents of other presentations and assessments made by the bodies of public authority,
d) information on the condition of the state, local authorities and their organisational units,
5) public property, including:
a) property of the State Treasury and state legal persons,
b) other property rights to which the state and its debts are entitled to,
c) property of the units of local authority and professional and economic local authorities as well as property of legal persons of local authorities and the ill persons’ offices,
d) property of the entities, defined in Article 4, it. 1, point 5, coming from disposing of the property, defined in c. a) – c) as well as the profits from this property and its encumbrances,
e) incomes and losses of the commercial companies in which the entities, defined in c. a) – c) hold the dominant position in the understanding of the provisions of the Commercial Companies Code and disposal of this income and the method of covering losses,
f) public debt,
g) public assistance,
h) public burden.
2. The official document in the understanding of this Act is the text of declaration of will or knowledge, preserved and signed in any form by the public officer in the understanding of the provisions of the Penal Code within the frames of its competencies, directed to another entity or filed to the acts.

The Court ruled that with regard to the types of information listed in the above mentioned provision it should be emphasized, referring to definition of public information as any information about public affairs, that public information is such information that carries a message about public affairs. Bearing that in mind, the Court noted that the source code is a series of instructions and statements written in an understandable human programming language that describes the operations that should be performed by a computer, which is a result of the work of developers. The Court ruled that that the source code does not contain any message on public matters, and is only a tool used in computer programs. The fact that certain computer programs are used by public authorities to carry out public functions, does not prejudge that their source code is public information. According to established case law of administrative courts and legal commentators, disclosure of public information is made in the form of material and technical activities, and only the refusal to disclose public information and discontinuance of the proceedings is made according to the provisions of Article 16 (1) of the API, in the form of an administrative decision. However, in cases where the requested information is not deemed as public information, it is sufficient to inform the requesting party of this fact. And in any case such situation cannot be deemed as inactivity of the requested body. According to the Court, the requested information did not met the scope defined in the API.

E-access to public information, case I OSK 175/13

May 25th, 2013, Tomasz Rychlicki

The Voivodeship Administrative Court in Warsaw in its judgment of 24 October 2012 case file II SAB/Wa 245/12 ruled that official topographic maps that were created and are kept in the databases by the Head Office of Geodesy and Cartography (GUGiK) are public information and must be made available on the request of the creator of dobraulica.pl website. GUGiK filed a cassation complaint.

The Supreme Administrative Court in its judgment of 5 April 2013 case file I OSK 175/13 anulled the contested judgment and ruled that the VAC incorrectly applied provisions of law, because in this case, the law on Geodetic and Cartography should be used as a legal basis for deciding the issue of public information and re-use.

E-access to public information, case II SAB/KR 152/12

November 28th, 2012, Tomasz Rychlicki

In another case of Tomasz Zieliński, the author of transportoid.com service and software available for Android and Windows Phone that provides timetables of public municipal transport systems, the Voivodeship Administrative Court in Kraków in its judgment of 26 November 2012 case file II SAB/KR 152/12 ruled that source code that was used to create a website with public communication timetables is not deemed as public information.

E-access to public information, case II SAB/Kr 105/12

October 19th, 2012, Tomasz Rychlicki

Tomasz Zieliński, the author of transportoid.com service and software available for Android and Windows Phone that provides timetables of public municipal transport systems, requested Miejskiego Przedsiębiorstwo Komunikacyjne (Municipal Transport Company) in Kraków to disclose public information in the form of electronic database of timetables. MTP refused and argued that the request goes beyond the the Act on Access to Public Information, apart from, the requested information is available on the website. Mr Zieliński filed a complaint on failure to act.

The Voivodeship Administrative Court in Kraków in its judgment of 18 September 2012 case file II SAB/Kr 105/12 agreed with Mr Zieliński and ordered MTP to take appropriate actions that were indicated in the request.

Access to public information, case I OSK 903/12

September 11th, 2012, Tomasz Rychlicki

Daniel Macyszyn, acting as the President of the ePaństwo Foundation, asked the First President of the Supreme Court of the Republic of Poland to disclose information why and on what legal basis, the Supreme Court in its decision No. BSA III – 055-90/11 posted references to the LEX software that is published by Wolters Kluwer, in situation when information available under these references is available for free and in public repositories that are published by the Supreme Administrative Court, and there are also other commercial legal information systems available on the Polish market. The Foundation wanted to know, whether the Supreme Court has the license for the use of LEX software. If the answer was positive, the Foundation inquired when, and in what procedure, and for what price and how many licences were purchased, and what were the criteria for selecting this software. Mr Macyszyn also aksed why the Supreme Court uses this software and not the public and free resources such as repositories of decisions of administrative courts, provided by the Supreme Administrative Court and the gazettes published by the Government Legislative Centre. The last question was whether the Supreme Court cooperates with the Wolters Kluwer on matters other than purchasing a license by the Supreme Court to the LEX. The First President refused to initiate proceedings with regard to disclosure of the requested information and noted that civil law contracts between public authorities with third parties operating in the sphere of private law, do not belong to the category of public information, consequently, they cannot be disclosed to anybody. Such contracts do not in fact belong to the category of “public information” within the meaning of Article 6(1) pt. 4 of the Polish Act of 6 September 2001 on Access to Public Information – API – (in Polish: Ustawa o dostępie do informacji publicznej), published in Journal of Laws (Dziennik Ustaw) No. 112, item 1198, with subsequent amendments.

Article 6. 1. The following information is subject to being made available, in particular on:
1) internal and foreign policy, including:
a) intentions of legislative and executive authorities,
b) drafts on normative acts,
c) programmes on realisation of public tasks, method of their realisation, performance and consequences of the realisation of these tasks,
2) entities, defined in Article 4, it. 1, including:
a) legal status or legal form,
b) organisation,
c) subject of activity and competencies,
d) bodies and persons performing functions therein and competencies,
e) property structure of entities, defined in Article 4, it. 1, points 3-5,
f) property they dispose of,
3) principles of functioning of entities, defined in Article 4, it. 1, including:
a) mode of conduct of public authorities and their organisational units,
b) mode of conduct of state legal persons and legal persons of local authorities in the area of performing public tasks and their activity within the frames of budget and non-budget economy,
c) methods of passing private-public acts,
d) methods of accepting and settling matters,
e) state of accepted cases, order of their settling or resolving,
f) conducted registers, books and archives and on methods and principles of making data there contained available,
4) public data, including:
a) contents and form of official documents, in particular:
– contents of administrative acts and other resolutions,
– documentation on the control and its effects as well as presentations, opinions, conclusions and statements of the entities having conducted the control,
b) opinion on public issues made by the bodies of public authority and by the public officers in the understanding of the provisions of the Penal Code,
c) contents of other presentations and assessments made by the bodies of public authority,
d) information on the condition of the state, local authorities and their organisational units,
5) public property, including:
a) property of the State Treasury and state legal persons,
b) other property rights to which the state and its debts are entitled to,
c) property of the units of local authority and professional and economic local authorities as well as property of legal persons of local authorities and the ill persons’ offices,
d) property of the entities, defined in Article 4, it. 1, point 5, coming from disposing of the property, defined in c. a) – c) as well as the profits from this property and its encumbrances,
e) incomes and losses of the commercial companies in which the entities, defined in c. a) – c) hold the dominant position in the understanding of the provisions of the Commercial Companies Code and disposal of this income and the method of covering losses,
f) public debt,
g) public assistance,
h) public burden.
2. The official document in the understanding of this Act is the text of declaration of will or knowledge, preserved and signed in any form by the public officer in the understanding of the provisions of the Penal Code within the frames of its competencies, directed to another entity or filed to the acts.

The Foundation requested for the re-hearing and the First President again refused. Daniel Macyszyn filed a complaint against these two refusal orders.

The Voivodeship Administrative Court in Warsaw in its judgment of 10 January 2012 case file II SA/Wa 2257/11 repealed both orders of the First President and ruled them unenforceable. The First President filed a cassation complaint.

The Supreme Administrative Court in its judgment of 11 September 2012 case file I OSK 903/12 dismissed it and held that any agreement between the public authorities and other entities, is deemed as public information. The Supreme Administrative Court pointed out that in matters of access to public information, the public authority cannot refuse to initiate proceedings. It have to either disclose public information, or if there are situations provided in Article 5 of the API, refuse to disclose such information, but in the form of a decision. But even while considering by the authority, whether the requested information is public information, or in case that would lead to the answer that the information is not public information, or that the authority simply does not have it, the proceedings were already initiated, therefore it cannot refuse to initiate it.

The Supreme Administrative Court in its judgment of 11 September 2012 case file I OSK 916/12 dismissed another cassation complaint filed by the First President against the judgment of the Voivodeship Administrative Court in Warsaw of 10 January 2012 case file II SA/Wa 2259/11 that repealed orders of the First President of the Supreme Court in which it refused to initiate proceedings to disclose information on the content of the contracts, which the Supreme Court of the Republic of Poland, the authorities or persons acting under the authority of the government, concluded with the company Wolters Kluwer, with regard to series of books published by Wolters Kluwer such as “Studies and analysis of the Supreme Court” and “Bulletin of the Supreme Court – Labour and Social Security and Public Affairs Chamber”, and the disclosure
of the contents of the contracts, which the Supreme Court of the Republic of Poland, the authorities or any person acting from on behalf of the authorities, have concluded with the publishing house LexisNexis Publishing sp. z o.o,, with regard to a series of publications such as “The case law of the Supreme Court – Civil Chamber (OSNC)”, “The case law of the Supreme Court – Labour, Social Security and Public Affairs Chamber (OSNP)”, and disclosure of the contents of the contracts, which the Supreme Court of the Republic of Poland, the authorities or persons acting under the authority of the government, concluded with the Editorial Board of the “Palestra” with regard to a series of publications entitled “The case law of the Supreme Court – Criminal Chamber and the Military Chamber (OSNKW)”. The Foundation requested also the disclosure of information on what procedure governed the purchase of the above mentioned periodicals by the Supreme Court, in what amounts and for what price.

Access to public information, case I OSK 933/11

September 5th, 2011, Tomasz Rychlicki

The Supreme Administrative Court in its judgment of 11 August 2011 case file I OSK 933/11 held that the provisions of Article 418a of the CRC does not specify different rules and procedures for disclosure and access to public information, which is a court judgment in a criminal case. Judgments, decisions of the courts and their justifications – decided both in civil, criminal and administrative proceedings – are therefore deemed s public information and should be disclosed under the provisions of Article 1(2) of the Polish Act of 6 September 2001 on Access to Public Information – API – (in Polish: Ustawa o dostępie do informacji publicznej), published in Journal of Laws (Dziennik Ustaw) No. 112, item 1198, with subsequent amendments. See also “Access to public information, case I OSK 896/12“.

Patent law, case file II GSK 85/11

November 22nd, 2010, Tomasz Rychlicki

The Voivodeship Administrative Court in Warsaw in its judgment of 30 June 2010 case file VI SA/Wa 595/10 held that the terms “solution of a technical nature” or “technology” are not defined in the European Patent Convention. Thus, the development of these concepts depends on the practice of the EPO. There is no doubt that in practice, the EPO is using much more liberal criteria for assessing the patentability of computer-implemented inventions than in the initial period of application of the EPC. However, this position was not accepted by all parties to the Convention. In addition, the Enlarged Board of Appeal on 12 May 2010, refused to resolve the problem presented by the President of the EPO, on the interpretation of the exclusion of computer programs “as such” in the context of the criteria for patentability of inventions relating to computer programs, leaving the question to practice. It can be concluded that the practice of liberalization of evaluation criteria for patentability of computer-implemented inventions was not accepted by all experts of the EPO. There are cases of the EPO that were based on the same provisions of the Convention but came with divergent decisions, as well as cases in which almost identical provisions of the Convention and national laws are interpreted, respectively, by the EPO or national bodies in different ways. This case concerned the International Patent Application PCT/EP99/08958 “Record carrier, apparatus and method for playing back a record carrier, method of manufacturing a record carrier”.

The Supreme Administrative Court in its judgment of 19 March 2012 case file II GSK 85/11 reversed the contested judgment and the decision of the PPO. The Court held that the decree of the President of the Polish Patent Office on the patentability of inventions has an internal character, and it can not be the basis of the justification of the decision.

E-access to public information, case I OSK 1727/09

September 4th, 2010, Tomasz Rychlicki

A Polish law firm requested the Office of the Attorney General of the State Treasury to disclose public information in the form of all unfavorable for the State Treasury decisions of common courts and the Supreme Court along with their written justifications, issued in 2008, in cases of reprivatization, in which the State Treasury was represented by the Attorney General of the State Treasury. The President of the Office of the Attorney General of the State Treasury refused and argued that the requested information has the nature of information processed, therefore, the applicant must also show particularly important public interest. The law firm filed a complaint against this decision.

The Voivodeship Administrative Court in its judgment of 23 September 2009 case file II SA/Wa 978/09 reversed the contested decision and held that legal commentators and the case-law formed the view that information deemed as simple is information that its substance does not change prior to its disclosure. However, the processed information is qualitatively new information that did not exist in the final content and form, although its source is in the materials held by the entity obliged to disclose such information. Thus, a fundamental feature that distinguishes processed public information from simple public information is that the authority does not posses processed public information, and for its production, it is necessary to carry out certain operations and activities on simple public information held by the entity, which results in the creation of the new quality of information. This new quality information is not only technically another compilation of existing information – another way of ranking previously held information, but different, qualitatively new information, usually leading to a specific assessment of the phenomenon, whether a particular interpretation, finding differences or similarities. In order to produce the processed information it is necessary to submit information under analysis, synthesis and produce in this way a new quality of information that does not result from the wording of any unit of information that was subject to processing, in general, it results from the sum of (a set of) individual pieces of information that has been processed. Therefore, the processed information does not results from a different order of possessed information, but from the new immanent quality that was obtained from the processing of new information. Only ranking and listing of judgments according to a specific criterion does not bear characteristic of processed information, but it has the nature of labor-intensive information, and creations of such information can only decide on the cost of production. Time-consuming, costly and organizational difficulties – technical or office that are associated with the creation and development of a public information cannot be treated as the exempt from the obligation to disclose of such information. Actions devoted to the necessary anonymization of the selected judgments do not constitute the production of processed information, because the anonymization process is a technical operation, as a result of which new information is not created.

The Supreme Administrative Court in its judgment of 3 August 2010 case file I OSK 1727/09 dismissed the cassation complaint filed by the President of the Office of the Attorney General of the State Treasury.

E-access to public information, case I OSK 190/06

September 4th, 2009, Tomasz Rychlicki

On 6 June 2004, the editor in chief of one of the Polish magazines requested the Minister of Internal Affairs and Administration for access and disclosure of the list of entrepreneurs who have been authorized to carry out business activity in the detectives and investigation services. The spokesman of the Minister replied that the registry of companies to whom such permits and licenses have been granted, as a whole, constitutes a database within the meaning of Article 2(1) point 1 of the Polish of 27 July 2001 on Protection of Databases – APD – (in Polish: Ustawa o ochronie baz danych), published in Journal of Laws (Dziennik Ustaw) No. 128, item 1402 with subsequent amendments. The whole structure of the registry is subject to legal protection and the its individual availability must be understood as the possibility to receive information about a specific item of the database. There are no procedural obstacles that the interested parties may receive information or data about a particular entrepreneur to whom the permit has been issued. So, as a general rule, the access to information contained in the registry is open, it does not mean, however, that the entire database should be disclosed – as a legal structure. The magazine filed a complaint on failure to act. The case went through all instances.

The Supreme Administrative Court in its judgment of 14 March 2006 case file I OSK 190/06 dismissed it the cassation complaint filed by the editorial team of the magazine.

Access to public information, case OSK 600/04

September 12th, 2006, Tomasz Rychlicki

The Internet Society Poland requested the President of the Social Insurance Institution – ZUS – (in Polish: Zakład Ubezpieczeń Społecznych) to disclose public information concerning technical specification of the KSI MAIL format, that is used in Płatnik software. Płatnik computer program is a free but not open source software that can be used to fill in and send a statement of payment declarations to the Social Insurance Institution. It works only with MS Windows operating systems.

The President of ZUS ruled that the Polish Act of 13 October 1998 on the Social Insurance System, consolidated text published in Journal of Laws (Dziennik Ustaw) of 2007 No. 11, item 74 as amended, obliges payers of social insurance to prepare documents including inter alia protected data, for instance sensitive data concerning health, in the electronic format and to transmit of such documents from Płatnik to ZUS. These data are personal data protected by law. Making them available could result in significant disruption in the supply KSI MAIL system, exposing to a breach of professional secrecy of ZUS and undermine the statutory exclusivity of the software provided by ZUS. Regardless of the abovementioned arguments, ZUS stated that KSI MAIL module is subject to business confidentiality and trade secrets due to the greement conducted between ZUS and Prokom Software S.A. on the design and implementation of a comprehensive system for social security. The agreement obliged ZUS to keep confidential all information relating to the transferred technology and solutions contained in KSI MAIL. ZUS based its final decision on the provisions of Article 5 of the the Polish Act of 6 September 2001 on Access to Public Information – API – (in Polish: Ustawa o dostępie do informacji publicznej), published in Journal of Laws (Dziennik Ustaw) No. 112, item 1198, with subsequent amendments.

Article 5. 1. The right to public information is subject to limitation to the extent and on the principles defined in the provisions on the protection of confidential information and on the protection of other secrets being statutorily protected.
2. The right to public information is subject to limitation in relation to privacy of a natural person or the secret of an entrepreneur. The limitation does not relate to the information on persons performing public functions, being connected with performing these functions, including the conditions of entrusting and performing these functions and in the event when a natural person or entrepreneur resigns from the right to which he was entitled to.
3. The access to public information on matters resolved before the state authorities, in particular in the administrative, criminal or civil proceedings cannot be limited, with the stipulation of it. 1 and 2, with respect to protection of the party’s interest, if the proceedings concern the public authorities or other entities performing public functions or persons performing public functions – in the scope of these functions or tasks.
4. The limitations of access to information on cases, defined in it. 3, do not breach the right to information on organisation and work of the bodies conducting proceedings, in particular on time, mode and place and the order of investigating cases.

ISOC filed a complaint before the Voivodeship Administrative Court in Warsaw. It emphasized that the technical specification of KSI MAIL is public information. Its publication broadens the possibility of fulfilling the duties of citizens who do not wish to invest in MS Windows. ISOC further argued that ZUS can not rely on contractual provisions, as it was contrary to the mandatory provisions of the API and that they are invalid. Also, ZUS made an erroneous interpretation of the law to rely on business secrets and trade secrets, because ISOC did not request the source code of the program, or other works protected by copyright or industrial property rights/patents.

The Voivodeship Administrative Court in its order of 30 January 2004 case file II SA 3732/03 held that this request concerns matters that are not subject to the administrative jurisdiction, but the civil courts which is in accordance with the provisions of Article 22(1) of the API.

Article 22.
1. The entity, which was denied the access to the public information in respect to its exclusion of its openness when quoting the protection of personal data, the right to privacy and the secret other than state, official, treasury or statistical secret, is entitled to put an action to the court for making such information available.
2. The entity, to which the exclusion of public information is related, has a legal interest in commencing as an accidental intervener on the defendant’s side.
3. The competent court for resolving the cases, defined in it. 1, is the district court with respect to the seat of the entity, which refused to make the public information available.

The Supreme Administrative Court in its judgment of 3 March 2004 case file OSK 600/04 stated that the cassation complaint is unfounded and declared that, the term “when quoting” as used in Article 22(1) of the API, has such meaning that it is sufficient for the entity who posses requested information to invoke the mentioned in this provision object of protection, to exclude the possibility of control by an administrative court. The administrative court cannot control in this case the legality of the decision and investigate if the indicated condition actually occurred.

Tax law, case file PB3/GM-8213-12/06/144

May 21st, 2006, Tomasz Rychlicki

In the letter of 10 March 2006, file PB3/GM-8213-12/06/144, published in Biuletyn Skarbowy of 2006, no 2, pp. 21-22, the Undersecretary of State of the Ministry of Finance gave the official interpretation regarding tax consequences associated with the use of free software programs, addressed to the Directors of all the Tax Offices and Chambers. This letter was issued in order to ensure uniform application of the law under article 14 § 1 point 2 of the Tax Code, to convey an explanation of article 12(1) point 2 of the Polish Act of 15 February 1992 on the Legal Entities’ Income Tax – LEIT – (in Polish: Ustawa o podatku dochodowym od osób prawnych) consolidated text published in Journal of Laws (Dziennik Ustaw) of 2000, No. 54, item 654 with subsequent amendments, on the tax consequences associated with the use of free software.

Art. 12. [General notion of revenue] 1. Revenues, subject to paragraphs 3 and 4 and Articles 13 and 14, shall be, in particular:
2) the value of things or rights received free of charge or partially free of charge, as well as the value of other free-of-charge or partially free-of-charge performances, with the exception of performances linked with utilization of fixed assets received by budgetary establishments, subsidiary undertakings of budgetary entities, public utility companies 100% owned by local government bodies or their associations from the State Treasury, local government units or their association for gratuitous management or use;

In many cases during the economic activity, taxpayers benefit for purposes of the activities of the publicly available and free of charge computer programs that are available for instance via the Internet for all users. Although most of the software for these operating systems is free, however there are exceptions in the form of commercial software. The rule, however, is that the use of such programs are not related to any fees for their purchase, or license fees.

Provision of Article 12(1) point 2 of the Act on the Legal Entities’ Income Tax recognizes as revenues, the value of obtained free-of-charge or the value of partially free-of-charge things and rights. However, article 12 (5 – 6a) of the Act on the Legal Entities’ Income Tax sets, the value of unpaid or partially-paid performances and the value of free or partially-free acquired things or rights, which are the subject of income tax.

5. The monetary value of things or rights received free of charge shall be determined in accordance with market prices applicable in trading of things or rights of the same type and quality, in particular taking into account their condition, degree of wear, as well as the time and place of obtaining them.

5a. The value of partially paid for things or rights constituting taxpayer’s revenues shall be the difference between the value of those things or rights, determined in accordance with the principles laid down in paragraph 5, and the consideration paid by the taxpayer. The provision of Article 14.3 shall apply, as appropriate.

6. The value of gratuitous performances shall be determined in the following manner:
1) if the performance concerns services included in the commercial activities of the performing party – at prices applied to other recipients;
2) if the performance concerns purchased services – at purchasing prices;
3) if the performance concerns letting the use of premises – at the equivalent of the rent that would have been due under a potential lease contract for those premises;
4) in other cases – in accordance with market prices applied in the performance of services or letting the use of things or rights of the same type and quality, taking into account their condition, degree of wear, as well as the time and place of letting them for use.

6a. The value of partially paid for performances constituting taxpayer’s revenues shall be the difference between the value of those performances, determined in accordance with the principles laid down in paragraph 6, and the consideration paid by the taxpayer. The provision of Article 14.3 shall apply, as appropriate.

The provision of article 12(1) point 2 of the Act on the Legal Entities’ Income Tax should be taken together with article 12(6) of the LEIT, which defines how the value of income from unpaid performances is determined. This is established case-by-case. For instance it may be:

the price charged to other customers – if a subject of a performance are services being a part of the business of an entity that is making the performance,
the market price that is used for the same kind of rights, taking into consideration, in particular, degree of wear, as well as the time and place of letting them for use – other than those referred to aticle 12(6) points 1-3 of the LEIT.

In the case of rights obtained free of charge, the income is determined on the basis of prices used in the market turnover of rights of the same kind, in particular, their condition and degree of use and the time and place of such use. Tax law provisions establishing the value of tax revenue for the free performances received, do not foresee a situation where appropriate performance is free for all stakeholders.

Article 12(6) of the LEIT includes cases in which there is an opportunity to compare the value of gratuitous performances to other pecuniary performances that were made by the taxpayer. The possibility of determining the value of “comparable” performances of given kind, in the case of the free software that is available to all on equal (free-of-charge/gratuitous) basis, can not be performed, and thus there is no basis for determining the value of income.

If certain performances (including the transfer of rights) are inherently free-of-charge to all taxpayers, and not an individual case that would be applicable to the individual entity, it is not allowed to establish tax revenues in connection with the occurrence of such events, as referred to article 12(1) point 2 of the LEIT. This does not mean, however, that in assessing the possible tax consequences associated with the use of such software, there is no need to examine all the circumstances connected with it. Each case therefore requires individual analysis.

These explanation of the tax consequences associated with the use of the free software, apply as appropriate to taxpayers of income tax of individuals engaged in non-agricultural economic activity (art. 14 ust. 2 pkt 8 ustawy o podatku dochodowym od osób fizycznych).