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This article is based on the examiner’s experience of setting and then reviewing candidates’ attempts to pass Paper F6 (POL) over the past few years. It is aimed to help focus the efforts of new and previously unsuccessful candidates.

What is worrying is that the overall standard of scripts has somewhat deteriorated, and it is clear that knowledge of many important areas of the syllabus is shallow or missing. There is also evidence of poor study approach and weak exam technique.


Aims of the paper

The paper is designed to test knowledge of a broad range of taxation matters. Focusing, as many students do, on corporate income tax (CIT) is insufficient. The skill required at this level demands that knowledge
is not superficial and confined to computational matters, but candidates are expected to explain and discuss matters intelligently, for example choosing an appropriate tax method where there are options, or explaining VAT to a layman.

The breadth of the syllabus does require a lot of study, since there are no optional questions, and all areas of the syllabus are covered in exams, although of course the examiner will set the minor topics only occasionally. In fact, the relative infrequency of some items seems to have caused candidates to ignore them altogether. There is no hard and fast rule as to when a particular topic will occur, but failing to examine one item for two or three diets may indicate that it is due this time, or it may not. A badly answered topic may reoccur surprisingly soon. Not studying an area is not an option for the serious candidate. I provide below the areas of study that need to be fully grasped, some of which will come up in each paper, some only occasionally. I also mention points frequently done poorly by candidates in those areas.


Key topics

  • The basic income tax computations. Most students are familiar with the many disallowables and other adjustments required. However, the structure of the computations is not well understood.
    Crucial is the magic formula that taxable revenue minus allowable costs gives income, which is not always the tax base, but must always be computed, since other matters depend on it.
    The application of and rules for reliefs, including loss relief, against the income to arrive at tax base. Poland had in recent years reduced these significantly, but the half dozen or so that remain in each of the income taxes are examined in depth.
  • The fixed asset classification and depreciation rules, including the choices available. The latter is not always done well.
  • The separate sources in personal income tax (PIT). It is extremely important to understand and distinguish between the six types of earnings that are cumulated, and the principles of cumulation. Each source has somewhat different rules for costs, which need to be known.
  • Non-cumulated PIT sources are not particularly significant, but property disposal is. Rules for property sales, and the relief available, were recently examined and it would appear that these were not well understood.
  • The incidence of health and social security charges against the three major ‘earnings from work’ sources, that is employment, registered business activities, and contracts. Rules vary significantly between sources.
  • Rules for married couples and single parents.
  • The peculiarly exotic and specifically Polish alternative methods available for taxing PIT business earnings. Although the tax card, flat rate on revenue, and flat 19% on income seem odd, they are used by up to one million businesswomen and men, and need to be fully understood, including the reliefs, if any, that are available.
  • Tax deduction on account by remitters from each source, including the alternate method. The rules are messy, but differences arise depending on the particular source, and are not always known.
  • The taxation of foreign source income, for both CIT and PIT, and the two methods for mitigating the effects of double taxation. These have generally been poorly understood.
  • The value added tax (VAT) basic allowed and disallowed inputs and outputs, and rules for partial exemption and carry forward/ repayment of any excess input tax.
  • Administrative matters, such as transfer pricing rules, due dates for returns and payments, including arrears. These do not each offer many marks, but overall a fair part of the paper requires knowledge of them, spread across several of the above areas.


Exam technique

The following points may be of value. Practise questions! Knowledge is all well and good, but the exam tests it in case study scenarios. Each major topic has been covered, some several times, so a comprehensive grasp of the necessary knowledge will be achieved.

Think about what is required before putting pen to paper, in order not to produce repetitive and confusing, chaotic answers. Requirements are carefully drafted to ensure that the task is clear and logical.

Set out computations of income tax and VAT accounts in two columns, to make life easier for yourself and the marker. If the marker can clearly see what you are trying to set out, it is much easier to award the mark.

Do not blur simple computations with paragraphs of explanation. There is no time and no marks for lengthy wording. Please see the model answers provided for all prior exams.

However, do show necessary, complex workings separately and clearly annotate them.

Allocate time approximately in proportion to the marks available. The marking scheme is deeply analysed and fair. If you are spending excess time on a topic, you are doing something wrong; for example in recent history recomputing 10 years of reducing balance depreciation at 28/14% to prove that an asset was fully depreciated for half a mark.

Written by the Paper F6 (POL) examiner

Last updated: 24 Aug 2016