It is 28 June 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:
- Subsequent draft bill issued under the Polish Deal
- Draft explanatory notes to the VAT e-commerce package
- Applying for contribution exemption under the Shield 9.0 possible until 30 June
- Decision on exempting PDF subsidies still not made by the Ministry of Finance
- Planned changes facilitating WHT settlements
- Renting private property or running business: the decision is to be made by the taxpayer
Subsequent draft bill issued under the Polish Deal
On 23 June 2021, the Ministry of Finance announced that it launched pre-consultations on a draft bill amending the PIT Act, CIT Act, and certain other acts.
The bill provides for a range of incentives aimed at SMEs and strategic investors, including an investment agreement referred to as “Ruling no. 590” (a ruling covering total tax consequences of a given transaction), an option of VAT taxation for financial institutions along with a number of tax solutions for holding companies.
Draft explanatory notes to the VAT e-commerce package
On 21 June 2021, the Ministry of Finance published draft explanatory notes to the VAT e-commerce package.
The notes cover the key solutions brought by the package, including:
- Intra-Community distance sales of goods (definition thereof, the place of supply),
- Distance sales of goods imported from third territories or third countries (definition thereof, the place of supply),
- The role of electronic interface operators (marketplaces),
- Special procedure dubbed One Stop Shop - OSS (EU and non-EU),
- Special procedure dubbed Import One Stop Shop – IOSS (import),
- Simplified declaration and deferment of import VAT on goods of an intrinsic value not exceeding EUR 150.
Applying for contribution exemption under the Shield 9.0 possible until 30 June
Applications for exemption from contributions due for December 2021, and January, February, March, and April 2021 can be submitted to the Polish Social Security Administration (ZUS) only until the end of June and exclusively via ZUS Electronic Services Platform.
The support may be applied for by entrepreneurs impacted by the COVID-19 pandemic in Poland, provided that they were reported as contribution remitters before November 2020 and as at 31 March 2021 conducted prevailing business activity under one of over 60 eligible PKD codes indicated in the regulation, including, inter alia, beauty salons, hairdressers, as well as furniture, construction and retail stores in shopping malls.
Decision on exempting PDF subsidies still not made by the Ministry of Finance
In response to a press inquiry, the Ministry of Finance declared that the decision on the tax due on the discharged part of the subsidy granted by the Polish Development Fund (PDF) will be made by 20 July, i.e. the day on which the tax payment deadline expires.
The decision is to concern the Financial Shield 1.0 support scheme, under which the PDF allocated over PLN 60 million to businesses affected by the Coronavirus pandemic. Some of the companies applied for discharge, however, pursuant to the applicable regulations, the amounts discharged constitute taxable revenue, on which an advance CIT or PIT payment must be made by the 20th day following the month of discharge.
The decision was to be issued in May, but eventually it was postponed to June. The tax obligation will depend on the date the decision is made. If it is to take place in June, the tax will have to be settled by 20 July.
Planned changes facilitating WHT settlements
In response to a parliamentary inquiry no. 24182, the Undersecretary of State at the Ministry of Finance, Jan Sarnowski, confirmed that some amendments to the WHT provisions are envisaged.
The amendments are to bring, inter alia, narrowing the objective and subjective scope of the WHT refund procedure, as well as extending the opinion confirming the taxpayer’s entitlement to exemptions from withholding tax provided for in double taxation treaties (i.e. reduced WHT rates or WHT collection exemption).
Renting private property or running business: the decision is to be made by the taxpayer
On 22 June 2021, the Supreme Administrative Court issued two rulings (case files II FSK 2402/19 and II FSK 2403/19) on how to settle the revenue from letting and other contracts of similar kind.
The Court found that since the taxpayers' intention was not to run a business but to rent private property, they were entitled to pay lump-sum tax on recorded rental revenue.
The two rulings follow the publication of the SAC’s resolution of 24 May 2021 (case file II FSK 1/21), according to which, it is the taxpayer who, through their individual actions (e.g. entering the rented property into the their business asset register), decides whether they will rent the property as part or outside their business activity.
Importantly, both the rulings and the resolution related to the legal status in force until the end of 2020.