The Supreme Administrative Court in its judgment of 9 March 2012 case file II FSK 1548/10 ruled that an agreement concluded between the advertiser company and the owners of websites is deemed as unnamed contracts, similar to tenancy contracts. The inclusion to the application of a third party code that allows for the inclusion of advertising on the website is in fact a violation of the integrity of the copyrighted work – the website. It is therefore the realm of personal (rather than property) rights of the copyright holders. Although these are inalienable rights, but according to the prior case-law, it is permitted to waive of the exercise of these rights by the creator to third parties, including entrepreneurs as it was decided by the Appellate Court in Warszawa in its judgment of 14 May 2007case file ACa 668/06 published in OSA 2008/12/39. The author or copyright owner can effectively commit to a specific person not to execute of personal rights, or even to allow for its exercise on his or her behalf, because then it comes to the exercise, and not to the renouncement of moral (personal) rights.
Archive for: Art. 16 ARNR
The Polish company which provides advertising services that are based on placing advertising banners on Internet websites requested the Minister of Finance to issue an individual interpretation of tax law. The company rents websites from individuals and companies for remuneration. Banner ads are placed on rented websites by using a computer software owned by the company. The owners of rented websites were required at the start of cooperation only to do a single interference/change in the code in order to make space on their websites for ads placed by the Company. This moment was treated as a commitment by the parties to the lease agreement and such a website was subject to use and benefits/usufruct. The owners of websites were not required to render to the Company (or its customers) any other additional steps. The company receives payments from its advertisers/customers according to the agreement, i.e. periodicaly for example monthly or once after the ad campaign ended.
The company asked whether income from remuneration for the lease obtained by individuals (private persons) who were not doing any business activity in this field, must be considered to sources mentioned in article 10(1) pt 6 of the Polish Act on Personal Income Tax – PITA – (in Polish: ustawa o podatku dochodowym od osób fizycznych) of 26 July 1991, Journal of Laws (Dziennik Ustaw) No. 80, item 350, with later amendments.
1. The sources of revenues shall include:
6) letting, subletting, lease, sublease and similar contracts, including also lease, sublease of special sectors of agricultural production and agricultural undertakings or parts thereof for non-agricultural purposes or for running special sectors of agricultural production, with the exception of assets used for commercial activities;
The company wanted to know whether it should be also acting as withholding agent, who is obliged to collect withholding income tax. The company argued that according to article 10(1) pt 6 and 44(1) pt 2 of the PITA it is not its duty. The Director of the Tax Chamber, acting under the authority of the Minister of Finance, held the position of the Company to be invalid. The Director and the Minister of Finance held that every time there was a service contract concluded between the company and the owners of websites and not the lease agreement, because the owner should be regarded as a person cooperating with the Company based on the fact that they have been required to comply with personal activities, i.e. one-time intervention in the code of a website, so that ads can appear on their website. Their revenues shall be defined as in article 10(1) pt 1 of the PITA.
1. The sources of revenues shall include:
1) service relationship, employment relationship, including cooperative employment relationship, farming or other agricultural production cooperative, homework, retirement or disability pension;
The company appealed. The Voivodeship Administrative Court (VAC) in Kraków in its judgment of 5 March 2010 case file I SA/Kr 60/10 held that a website is not either the tangible object/property or the right. It cannot therefore be subject to a lease within the meaning of the Polish Civil Code. However, according to the principle of contractual freedom, as the company correctly pointed out, it would be acceptable to conclude the so-called unnamed contract, which would be similar to the standard lease contract as provided by the regulations included in the Civil Code. The changes made in HTML code were just the technical operation.
See also “Tax law, case ILPB2/415-679/08-2/AJ“