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 14 November 2022, the President signed the Act amending the Act on counteracting excessive payment delays in commercial transactions and the Act on public finances (commonly referred to as the Anti-Backlog Act). The goal thereof is to clarify the existing provisions, simplify the reporting obligations, and improve efficiency of proceedings on excessive delays in payments. As per the applicable rules, new provisions will enter into force 14 days after promulgation. At the same time, the President signed the Act ratifying the treaty on the elimination of double taxation in the field of income taxes and the prevention of tax evasion and avoidance concluded between Poland and Georgia on 7 July 2021 in Tbilisi and published in the Polish Journal of Laws on 17 November 2022.
The treaty with Georgia has been extended with, among others, a real estate clause, a full information exchange clause, and a general anti-avoidance clause.
It is to become effective on the first day of the third month following the month in which the later of the notifications has been received in which the respective Governments have notified each other in writing that the formalities constitutionally required have been complied with, and it will apply from the date of its entry into force, regardless of the taxable period concerned.
On 9 November 2022, Poland signed the Multilateral Competent Authority Agreement on Automatic Exchange of Information on Income Derived through Digital Platforms (DPI MCAA). According to OECD, the agreement is to allow jurisdictions to automatically exchange information collected by operators of digital platforms with respect to transactions and income realized by platform sellers in the sharing and gig economy and from the sale of goods through such platforms.
On 14 November 2022, a draft decree of the Minister of Finance on the use of the e-Tax Office utility was published on the Government Legislation Centre’s website. It is to replace the currently binding decree of the Minister of Finance on the use of the e-Tax Office utility dated 6 July 2022. The key amendment brought about by the new decree enables creation of bailiff accounts. This means that e-Tax Office can be now used by bailiffs to apply for access to information kept under fiscal confidentiality (WUD-1K). In addition, accounts of natural persons referred to in Article 35b (2)(1) of the Act of 16 November 2016 on the National Revenue Administration will be made available in the e-Tax Office system.
Users of natural person accounts may use the “Your e-PIT” feature, express and withdraw consent to the delivery of letters to the account of a natural person in the e-Tax Office or make online payments of taxes, fees and non-tax budgetary levies.
During the sitting of 16 November 2021, the Lower House of the Polish Parliament passed the Act amending the Act on tax on certain financial institutions. One of the key changes brought about by the Act 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. Moreover, it adjusts robotization relief provisions to EU regulations.
At the same sitting the Sejm passed the Act amending the Act on public finances, the Act on environmental law, and the Act on ICT system for processing certain types of contracts.
The new ICT system is to be launched in 2025 and its key functionality is that employers and employees can enter into and store contracts online, using a trusted signature. It is also to facilitate the correct calculation and payment of taxes and social security contributions. The Acts now move to the Upper House of the Polish Parliament.
On 14 November 2022, the decree amending the decree on amounts due to employees of state or local government budgetary units for business travel was published in the Polish Journal of Laws. According to the amended provisions, starting from 29 November 2022, per diem rates and limits for outbound overnight stays are to increase.
To ensure clarity of the Schedule, for countries such as: Andorra, Liechtenstein, Luxembourg, Monaco, Palestine and San Marino, separate per diem rates and limits for outbound overnight stays have been set, without referring to other states. Pursuant to interim provisions, in the case of outbound business travels started and not completed before 29 November 2022, the amounts due are determined in the following manner: - for the period until 29 November 2022: in line with the provisions currently in force and - for the period starting on 29 November 2022: in line with the new provisions.
In its judgment dated 14 November 2022 (case file I FSK 551/19), the Supreme Administrative Court pronounced itself in the case of a company implementing a currency exchange system. The system was to rely, inter alia, on direct currency exchange transactions between system participants, whereby one entity buys or sells a foreign currency in a transaction with another company at a fixed exchange rate, keeping the market exchange price. According to the Court, in light of the judgment of the CJEU of 29 April 2004 rendered in the case C-77/01, currency exchange transactions performed by the company can be treated as ancillary activities. The ancillary nature thereof stemmed from a limited asset use, as demonstrated by the company. Importantly, other criteria listed in the CJEU judgment have been met, i.e., such activities are carried on an occasional basis, they are unplanned, linked with fortuitous events and involve only very limited use of assets or personnel of the company.
In its judgment of 17 November 2022 (case file C 607/20), the CJEU ruled that supply of services by a company consisting in offering retail vouchers to its employees, in the context of a program set up by that business, designed to recognize and reward the most deserving and high-performing employees, does not fall within the scope of Article 26(1)(b) of the VAT Directive. In other words, it is not recognized as supply of services for consideration and, therefore, it is not subject to VAT.
On 10 November 2022, the CJEU Advocate General delivered an opinion (case file C-612/21) in the case related to a contract with property owners under which the municipality undertakes to install renewable energy source systems on their property and – after a certain period of time has elapsed – to transfer the ownership of those systems to the property owners. The entire project was financed with subsidies from the State funds and property owners’ own contribution.
The Advocate General pointed out that there are doubts whether the municipality acts as a VAT payer in this case. This is because the municipality’s activity solely involves organizing the promotion of renewable energy expansion for its residents. Consequently, the municipality is not acting under the same legal conditions as other private economic operators. This means that, in the opinion of the Advocate General, the municipality will not act as a taxable person for VAT purposes.