KPMG Weekly Tax Review 10 JAN - 17 JAN 2022 KPMG Weekly Tax Review 10 JAN - 17 JAN 2022 KPMG Weekly Tax Review 10 JAN - 17 JAN 2022

It is 17 January 2022. We invite you to the next episode of the “Weekly Tax Review” prepared in cooperation with tax experts in KPMG in Poland.

• Anti-inflation Shield 2.0 passed by the Sejm
• SAC: individual ruling is not equal to APA
• End of the deadline for settling PDF 2.0 Shield subsidies for SMEs
• Selection of Estonian CIT scheme also possible after 31 January
• Real estate tax: declarations due until the end of January
• Middle-class relief. A guide for taxpayers and employers provided by the Ministry

On 13 January 2022, the Lower House of the Polish Parliament passed a package of anti-inflation measures dubbed Anti-Inflation Shield 2.0. The Shield provides for temporary reduction (from 1 February 2022 to 31 July 2022) in VAT on:

• food products to 0% from the standard 5% rate,
• fuels (diesel oil, bio-components which constitute self-contained fuels, motor fuels and LPG) to 8% from the standard 23% rate,
• fertilizers, pesticides, potting soil, and other measures supporting agricultural productions (including soil conditioners, growth promoters, and certain substrates) to 0% from the standard 8% rate,
• natural gas to 0%,
• electricity and heat to 5%.

The Anti-Inflation Shield 2.0 bill has been already submitted before the Senate and is to be debated during the upcoming sitting held on 20-21 January. It is expected to enter into force on 1 February 2022.

In its ruling of 11 January 2022 (case file II FSK 990/19), Polish Supreme Administrative Court found that the Head of the National Revenue Information Service cannot refuse to issue an individual ruling on whether an entrepreneur may include the price paid to a related entity under restructuring proceedings into tax-deductible costs. The case at hand related to a company applying for an individual ruling on whether the price for the purchase from a related entity of a part of the production, sales and distribution segments was calculated in a correct manner and on the possibility of deducting the received remuneration from the income. The head of NRIS refused to issue such a ruling, stating that the inquiry did not, in fact, relate to the possibility of deducting the price paid, but to whether the remuneration was correctly calculated under the contract, while economic analyses of contracts entered into by taxpayers are excluded from the scope of individual rulings. This kind of information may be obtained under an advance pricing agreement (APA). The Supreme Administrative Court, however, challenged this position. According to the SAC, in the application for the ruling it was clearly articulated that the company wanted to know if it could include the remuneration into tax-deductible costs and when it was eligible to do so. Consequently, the goal of the application was not to dispel any doubts that could be answered only by issuing an APA. This means that the Head of NRIS is obliged to issue a ruling that would provide the expected guarantee and protection to the company.

The deadline for settling subsidies granted to small and medium businesses under Polish Development Fund’s Shield 2.0 elapsed on 15 January 2022. The second stage of granting the subsidies under PDF 2.0 shield, aimed at micro-enterprises, is to begin on 19 January and last until the end of February 2022. To apply for a subsidy, companies need only to submit a statement that they have been operating throughout the pandemic or remained in compliance with epidemic standards, which will be then verified by PDF. The third stage will be launched in April 2022 and will include the issuing of redemption decisions. In cases were partial redemption turns out to be required, companies will have the time to do so until 31 May 2022.

The Ministry of Finance announced that taxpayers whose tax year coincides with the calendar year, willing to apply the Estonian CIT scheme do not need to do so by 31 January 2022, since the amendments brought by the Polish Deal provide for the possibility of switching to lump-sum taxation at any moment. A company deciding to apply the lump-sum scheme should submit a ZAW-RD form to the head of the competent tax office by the end of the first month of the tax year, i.e., already during the year for which the lump-sum scheme is to be applied. This means that in situations where the company’s tax year coincides with calendar year, the form should be submitted no later than on Monday, 31 January 2022. The provisions of the Polish Deal, however, bring about the possibility of selecting the Estonian CIT scheme later than by the end of the first month of a given tax year. Consequently, information on switching to Estonian CIT from the following month comes with closing the books and drawing up a report for the last day of the month preceding the first month of applying the lump-sum scheme. 

The deadline for submitting real estate tax returns falls on 31 January 2022. The maximum real estate tax rates are provided by the Act of 12 January 1991 on local taxes and charges, however, due to the annual indexation, their amount is determined annually by the Minister of Finance and communicated by way of notice (published by October 31 of a given year). Each municipality sets its own rates in relation to the maximum rates announced by the Minister. Real estate tax returns may be submitted electronically via ePUAP (Electronic Platform of Public Administration Services) or other communication and information system made available through the Public Information Bulletin of the competent authority of the local government unit.

The Ministry of Finance issued special guides dedicated to taxpayers and employers, helping them to navigate through the middle-class relief provisions. The middle-class relief consists in deducting the income by an amount determined individually based on the amount of earned revenue. It may be applied by every individual earning revenue from working relationship (service relationship, employment relationship, outwork relationship or a cooperative employment relationship) or from business activity taxed according to the tax scale between PLN 68,412 and PLN 133,692 annually. The guides can be accessed on the Ministry of Finance’s websites.