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:
On 8 November 2022, a new bill on family foundations was published on the Government Legislation Centre’s website. The main goal of the bill is to introduce the institution of family foundation to the Polish legal framework, to facilitate family business succession, and to enable accumulating and securing family’s assets. Compared to the initial version of the bill dated October 2021, the updated revision brings a new taxation model, a separate register of family foundations, rules of protecting personal data processed by family foundations and principles of legitim liability. Some editorial changes were also made. New regulations on family foundations are to enter into force 3 months after promulgation.
The decree of the Minister of Finance dated 26 October 2022 on the types of taxes, fees, and non-taxed budgetary levies payable trough tax micro-accounts entered into force on 10 November 2022. Compared to the previous version thereof, the catalogue of payments made using tax micro-accounts got extended (e.g., with fees for providing information to court bailiffs, fees for an extract from/certificate of the Register of Treasury Pledges, and, starting from 1 January 2023, a raft of payments related to tax on extraction of certain minerals).Moreover, descriptions of some form symbols/transfer titles have been updated, inter alia, to distinguish PIT-4R payments.
On 10 November 2022, a government bill amending the act on tax on certain financial institutions, amending the act on public finances, and amending environmental law act was submitted before the Lower House of the Polish Parliament. One of the key changes brought about by the bill is that it extends the possibility of reducing the taxable base in tax on certain financial institutions by the value of bonds guaranteed by the State Treasury. New provisions are expected to enter into force on 01 January 2023.
In its ruling dated 8 November 2022 (case file II FSK 926/22), the Supreme Administrative Court stated that in the case at hand, conclusion of a sub-participation agreement did not lead to disposal of property rights. Consequently, revenue from the purchase price of portfolio cash flows should be recognized under the cash accounting scheme, i.e., on the date the payment was actually received. Importantly, due to the specificity of sub-participation agreements, a one-off settlement of all expenses related to the purchase price of receivables covered by the sub-participation agreement and the costs of their recovery against the revenue on account of purchase price is not allowed. This means that the company will be authorized to recognize the transferred amounts as tax-deductible costs and account for them only at the time the costs are actually incurred.
In its ruling dated 8 November 2022 (case file III FSK 1538/21), the Supreme Administrative Court pronounced itself in the case of a company renting out residential premises in a tenement house entered in the register of monuments. Within the frames of the pursued business activity, the company rents out residential premises to natural persons for short-term accommodation. According to the Court, since the actual state of affairs clearly indicates that the company is entered in the register of entrepreneurs and one of its objects is to rent out premises for short-term accommodation, the residential premises in question should not benefit from the exemption and should be taxed at the level corresponding to the business activity pursued by the company.
In its ruling dated 3 November 2022 (case file II FSK 590/20), the Supreme Administrative Court pronounced itself in the case of a taxpayer who participated in division of inheritance from her late husband. As a result, against payment to the other heirs, the taxpayer acquired property rights to real estate constituting a succession asset. The taxpayer wanted to know whether gainful disposal of ½ of the share in the acquired real estate, taking place after five years from the end of the calendar year in which the acquisition took place, gave rise to a tax liability on her part in respect of the sale of that share pursuant to Article 10(1)(8)(a) of the PIT Act. According to the Court, the 5-year period after which real estate can be sold tax-free should be counted from the moment of acquiring the real property on the date the estate is opened. Subsequent divisions of inheritance have no impact on determining the acquisition date.
During the meeting of the Monetary Policy Council held on 9 November 2022, it was decided to keep the NBP interest rates unchanged, i.e.:
- reference rate at 6.75% annually;
- lombard loan interest rate at 7.25% annually;
- deposit rate at 6.25% annually;
- rediscount rate at 6.80% annually;
- discount rate on bills of exchange at 6.85% annually.
Changes to the reference rate affect other financial parameters, e.g. the amount of interest on tax arrears (200% of the basic lombard loan interest rate + 2%, except that the rate may not be lower than 8), which now amounts to 16.5% on an annual basis as well as the limit of notional costs of external financing and of a reduction in the amount of tax liability in the event of payment of VAT in full from a VAT account earlier than the deadline for paying the tax.