It is 26 April 2021. We invite you to the next episode of the “Weekly Tax Review” prepared in cooperation with tax experts in KPMG in Poland.
In today's episode:
- Scope of protection granted by the general ruling on fuel cards
- Decree extending coverage of assistance under the Industry Shield
- Sales of meals for immediate consumption taxed at lower VAT rate
- Rules for tax loss carryback due to the COVID-19 pandemic
- Poland to participate in the OECD International Compliance Assurance Programme
- Suspension of statute of limitations under the Penal Fiscal Code during the pandemic
Scope of protection granted by the general ruling on fuel cards
In response to a press inquiry, the Ministry of Finance confirmed that if a fuel card transaction is entered into by more than three parties, the general ruling of 15 February 2021 (case file PT9.8101.3.2020) grants no protection to the taxpayer. The ruling of 15 February 2021 applies to transactions, as part of which a customer purchases fuel by means of a fuel card and settles accounts with the fuel card supplier. The services provided by the card issuer can then be treated either as a delivery of goods or as a financial service, depending on whether or not the card issuer disposes of the fuel as owner. The general ruling sets forth the prerequisites which have to be met to classify the transactions as service provision. The ruling, however, pertains to transactions involving three parties, i.e. the gas station, the card supplier (intermediary operator) and the customer. According to the explanations provided by the Ministry, if a transaction involves more than three entities, the taxpayer may not have recourse to the general ruling, given that it concerns different facts. Furthermore, the ruling will not apply to situations where the cards are issued by the intermediary operator. When assessing their individual situation, the taxpayer may still be guided by the criteria for assessing a given transaction set forth by the ruling, which, in the Ministry's opinion, remain valid also in relation to transaction models involving more entities.
Decree extending coverage of assistance under the Industry Shield
On 16 April 2021, a Cabinet decree amending the decree on providing support to businesses affected by the COVID-19 pandemic was published in the Polish Journal of Laws. The decree applies to four types of aid, i.e. ZUS contribution exemptions, to be extended until 30 April 2021, co-financing of employees' salaries in the amount of PLN 2k, downtime benefits for natural persons conducting business activity and subsidies for small businesses of up to PLN 5k. Furthermore, under the decree, the group of industries eligible for aid was extended to cover subsequent 17 PKD [Polish Classification of Activities] codes, to which the latest COVID-19-related restrictions, introduced in March 2021, applied. The aid is granted to entities which, as at 31 March 2021, conducted prevailing business entity under an eligible PKD code and experienced a 40 percent decline in revenue from business operations in one of the three, the two or in the month preceding the month of submitting the application in relation to the revenue obtained in the previous month or in the corresponding month of the previous year, as well as in February 2020 or September 2020, depending on the aid measure applied for.
Sales of meals for immediate consumption taxed at lower VAT rate
On 22 April 2021, CJEU issued a ruling (C-703/19), according to which, in light of the laws in force in Poland in 2016, where the consumer chooses not to benefit from the material and human resources (e.g. chairs, tables, crockery, plates, waiter service and the composing of prepared dishes) made available by the taxable person, it must be concluded that no support services accompany the supply of food or drink and that the transaction in question must be qualified as a supply of goods. Consequently, it should be subject to the VAT rate of 5 percent, applicable to supply of goods, instead of the 8 percent rate due on restaurant and catering services. The Court's judgment allows taxpayers for whom, in the course of tax assessment proceedings, an excessive tax liability was determined for this type of take-away sale, to recover part of the VAT charged.
Rules for tax loss carryback due to the COVID-19 pandemic
The National Revenue Information Service published the rules for the carryback of losses caused by the COVID-19 pandemic. In order to apply it, an amended return for 2019 must be submitted and a loss for 2020 must be reported via CIT-8/0 attachment, in the “inne odliczenia” (other deductions) box. In the “Tytuł” (Title) field, Article 38f of the CIT Act must be indicated. Next step is to carry back the loss reported in the CIT-8 return and reduce the income accordingly. Similarly, the loss can also be accounted for in the PIT tax return. The National Revenue Information Service draws taxpayers’ attention to the fact that for correct settlement of the amended return, an application for confirmation of overpayment must be enclosed. Importantly, the first step consists in submitting a return for 2020 and only then the amended 2019 return may be lodged. The limit on deductibility is PLN 5 million, with the refund deadline being 3 months.
Poland to participate in the OECD International Compliance Assurance Programme
The Ministry of Finance announced that Poland has been admitted to the OECD International Compliance Assurance Programme (ICAP). Twenty OECD countries participate in the ICAP, which is a voluntary risk assessment and assurance programme to facilitate open and co-operative multilateral engagements, aimed at multinational enterprises (MNE) and tax administrations. ICAP should reduce the resource burden on both MNE groups and tax administrations and mean fewer disputes requiring resolution through mutual agreement proceedings.
Suspension of statute of limitations under the Penal Fiscal Code during the pandemic
On 20 April 2021, the Polish Sejm passed an act amending the Polish Penal Code and certain other acts. The Act introduces, inter alia, a provision according to which, during the state of epidemic or epidemic threat announced due to COVID-19 and within 6 months after it is revoked, the statute of limitations to prosecute the case or to execute the penalty in criminal and criminal fiscal proceedings will not run. The Act is currently before the Senate. As per the applicable rules, the provision is to enter into force 14 days after its announcement. The pertinent decree entered into force on 26 April 2021, with the exception of the provisions on the downtime benefit and exemption from social security contributions, which will come into force on 4 May 2021.