It is 31 January 2022. 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:
- Anti-Inflation Shield 2.0 Act published in the Journal of Laws
- New provisions extending the deadline for collecting and transferring personal income tax advance payments
- Amendments to regulations on employing foreigners
- New OECD guidelines
- Deadline for reporting beneficial owners to elapse on 31 January 2022
- Board Member’s liability for the Company’s arrears cannot be limited
- Server data storage service does not involve the use an industrial device
Anti-Inflation Shield 2.0 Act published in the Journal of Laws
On 27 January 2022, the Act amending the Value-Added Tax Act (commonly referred to as the Anti-Inflation Shield 2.0) was published in the Polish Journal of Laws. Under the new provisions, the reduced 5% VAT on electricity is to apply until 31 July 2022, while the 0% VAT on natural gas is to apply from 1 January 2022 to 31 July 2022. Importantly, the Act brings reduced VAT rates (from 5% to 0%), inter alia, on food products listed in items 1-18 of Appendix 10 to the VAT Act (such as fish and fish products, dairy products, vegetables, fruit, including fruit and vegetable products, cereals, products of the milling industry, cereal and bakery products and some beverages), applicable from 1 January 2022 to 31 July 2022. Amendments to VAT regulations also mean the expiry of Binding Rate Information issued for goods to which the reduced rates brought by the Anti-Inflation Shield 2.0 apply. The new regulations are to enter into force on 1 February 2022.
New provisions extending the deadline for collecting and transferring personal income tax advance payments
On 27 January 2022, the Lower House of the Polish Parliament passed an act amending the Personal Income Tax Act and the Act on Vocational and Social Rehabilitation and Employment of Persons with Disabilities. The changes aim at securing Companies’ Funds for Rehabilitation of Persons with Disabilities and Companies’ Vocational Funds, created by Sheltered Employment Establishments and Vocational Development Centres, as well as amending the PIT Act with Article 53a providing for extending the deadlines for collection and payment of advance income tax, initially introduced by way of decree of the Minister of Finance dated 7 January 2022 on extending the deadline for collecting and transferring personal income tax advance payments for certain tax remitters. Moreover, under the Act it was confirmed that the PIT-2 declaration can be submitted throughout the year, also by individuals collecting retirement pensions.
Amendments to regulations on employing foreigners
On 29 January 2022, the Act of 17 December 2021 amending the Act on Foreigners and certain other acts, including the Act on promotion of employment and on labour market institutions, enters into force. The most important amendments to the Act on foreigners include simplifications in granting temporary residence and work permits to foreigners as well as permits for temporary residence to perform work requiring specialized skills (Blue Card). The Act repeals the requirement to have a documented secured place of residence and the requirement to have a stable and regular source of income for granting the permit. However, it will still be required from a foreigner to receive a remuneration not lower than the minimum one. Importantly, this condition will have to be met regardless of the working time and the type of legal relationship under which the work is performed.
New OECD guidelines
On 20 January 2022, the OECD released the 2022 edition of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. The latest edition includes the revised guidance on the application of the transactional profit method and the guidance for tax administrations on the application of the approach to hard-to-value intangibles (agreed in 2018), as well as the new transfer pricing guidance on financial transactions approved in 2020. Finally, consistency changes have been made to the rest of the OECD Transfer Pricing Guidelines.
Deadline for reporting beneficial owners to elapse on 31 January 2022
The deadline for fulfilling the obligations related to reporting beneficial owners vested in entities registered in the National Court Register before 31 October 2021, elapses on 31 January 2022. Entities entered into the National Court Register after 31 October 2021 have 7 days from the date of entry into the National Court Register to submit their application. The amended Act on counteracting money laundering and terrorist financing of October 20212 extended the list of entities required to report beneficial owners to the Central Register of Beneficial Owners (CRBO) to foundations, associations and cooperatives, professional partnerships, Societas Europaea, European Economic Interest Grouping and trusts operating in Poland. Failure to comply with the reporting obligation can bring administrative fines of up to PLN 1 million.
Board Member’s liability for the Company’s arrears cannot be limited
In its ruling of 14 December 2021 (case file III FSK 214/21), the Supreme Administrative Court found that the lack of knowledge about the company’s financial condition is not a sufficient prerequisite to relieve a Board Member from liability for the company's arrears. This is because a member of the Management Board is responsible for running the company's affairs, even in situation of non-performance or limited competency. In the opinion of the court, if an individual accepts such a function, they are both responsible for running the company's affairs and liable for any failure to fulfil their obligations.
Server data storage service does not involve the use an industrial device
In its ruling of 19 January 2022 (case file II FSK 1274/19), the Supreme Administrative Court pronounced itself on whether it is required to collect CIT on the service of server data storage. The case at hand related to a company purchasing services consisting in being granted access to storage space on servers belonging to its counterparty. In the opinion of the Supreme Administrative Court, the fees paid by the company for the service consisting in storing data on the server are not fees for use or the right to use an industrial device within the meaning of Article 21(1)(1) of the CIT Act, but for the object of the service, in line with the contract in force. Consequently, the company is not required to collect WHT.