It is 8 August 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:
- Improved access to banking information for tax offices
- WH-OSC validity to extend
- People's Republic of China to become a party to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting
- A draft cabinet decree on the statutory minimum wage and the minimum hourly rate for 2023
- New draft bill implementing the Single-Use Plastics Directive
- New draft bill on whistleblowers
- Notion of “free benefit” according to the PIT Act
Improved access to banking information for tax offices
On 28 July 2022, the Minister of Finance’s response to a parliamentary inquiry no. 34443 on improved access to banking information for tax offices was published. It relates to provisions effective as of 1 July 2022, under which heads of tax offices gained the right to demand from banks information on bank accounts of taxpayers already at the stage of proceedings, without the knowledge of account owners. The Minister of Finance stressed that the new provisions cannot be applied without justified cause and without being related to the committed acts that are the subject of the ongoing proceedings. Thus, according to the Minister, any suggestions that the information would be used for analytical purposes or to confirm alleged irregularities before initiating a tax inspection were unfounded.
WH-OSC validity to extend
On 1 August 2022, a draft decree of the Minister of Finance on extension of selected deadlines for the performance of obligations by remitters of lump-sum income tax was published on the Government Legislation Centre’s website. The decree is to extend the validity of WH-OSC statements exempting the remitter from the obligation to apply the pay and refund mechanism to WHT. The extension is to cover both the original statement (until the end of the remitter’s tax year instead of two supplementary months) and the follow-up statement (until the end of month following the end of the remitter’s tax year instead the seventh day of the month following the expiry of validity of the original statement, as currently applicable). The new provisions are only to apply to statements submitted in time and that have not expired on the date of entry into force of the proposed decree. The decree is to enter into force on the day following its promulgation. Importantly, the Minister of Finance announced that amendments are also to be made at a statutory level.
People's Republic of China to become a party to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting
On 29 July 2022, a government declaration instrument dated 1 July 2022 on the binding force in relations between the Republic of Poland and the People's Republic of China of Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, adopted in Paris on 24 November 2016, and its application in the implementation of the provisions of the Convention between the Republic of Poland and the People's Republic of China for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, signed in Beijing on 7 June 1988, was published in the Polish Journal of Laws. According to the declaration, on 1 September 2022, the People's Republic of China is to become a party to the Convention. This means that starting from 1 September 2022, the Convention is to govern the relations between the Republic of Poland and the People's Republic of China.
A draft cabinet decree on the statutory minimum wage and the minimum hourly rate for 2023
On 28 July 2022, a draft decree on the statutory minimum wage and the minimum hourly rate for 2023 was published on the Government Legislation Centre’s website. The decree provides for the following minimum wage rates: PLN 3,383 starting from 1 January 2023 and PLN 3,450 starting from 1 July 2023. Consequently, the minimum hourly rates in 2023 should amount to PLN 22.10 starting from 1 January 2023 and PLN 22.50 starting from 1 July 2023. Minimum wage rates influence, inter alia, increased default interest rate and the level of fiscal penalties imposed.
New draft bill implementing the Single-Use Plastics Directive
A new draft bill amending the Act on the Entrepreneur Duties to Manage Certain Waste and Product Fee and some other acts, implementing the Directive (EU) 2019/904 of the European Parliament and of The Council of 5 June 2019 on the reduction of the impact of certain plastic products on the environment (commonly referred to as the “Single-Use Plastics Directive), was published on 26 July 2022. The most important changes compared to the previous version of the bill include, among others, setting the fee rate to cover the costs of collecting waste generated from selected single-use plastic products at PLN 0.01/kg and determining the amount of the product fee imposed on entities introducing products in single-use plastic bottles up to 3 litres. Failure to comply with the provisions of the amended act will be punishable by a fine of up to PLN 500,000. As per the applicable rules, the act is to enter into force 14 days after its promulgation, with some exceptions being expected.
New draft bill on whistleblowers
On 4 August 2022, the latest revision of the draft bill on protecting individuals reporting breaches of law (whistleblowers) was published. Its objective is to implement into Polish law the provisions of Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law. Compared to the previous version, the bill includes a number of changes. For example, it accommodates for a raft of suggestions made during the public consultation process. It should be reminded that pursuant to the whistleblower Directive, entities employing at least 50 workers will be obliged to develop and implement internal reporting regulations, serving as a basis for the internal procedure for reporting breaches of law and taking follow-up actions.
Notion of “free benefit” according to the PIT Act
According to the ruling of the Regional Administrative Court in Poznań dated 4 August 2022, case file I SA/Po 1085/21, the tax authority's position that if, in a contest, under the established regulations, prizes were awarded to all participants, competition-free, the exemption provided for in Article 21(1)(68a) of the PIT Act will apply, shall be deemed unfounded. Participation in contests and competitions is not an activity of equivalent character, since participation therein does not generate related expenses for participants and, consequently, the participants do not provide any free benefits in return for the prizes granted. Consequently, the fact of taking part in a given contest once the all the conditions set forth in the participation terms are satisfied do not give rise to an equivalent benefit.