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It is 16 January 2023. 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:

A clearance opinion dated 20 December 2022 (case file DKP3.8082.12.2022) on a set of activities consisting in early partial repayments of loans by selected related entities and allocation of these repayments in full to repayment of the principal of these loans (and not interest) was published on 12 January 2023. According to the Head of the National Revenue Administration, despite the possibility of obtaining a tax benefit by the Applicant, it may be assumed that the actions taken by the taxpayer in the circumstances indicated in the application do not go against the purpose or object of the tax act and that the modus operandi adopted by the taxpayer is not of artificial nature. Consequently, Article 119a(1) of the Tax Code finds no application to the tax benefit brought by the activities performed and presented by the Applicant.

On 11 January 2023, a draft decree of the Minister of Finance amending the decree on goods and services subject to reduced VAT rates and the conditions for applying the reduced rates was published on the Government Legislation Centre’s website.

According to the draft decree, a 0 percent VAT rate is to be applied to free-of-charge deliveries of goods or provisions of service to the Governmental Agency for Strategic Reserves, healthcare entities, and local government units, aimed at supporting victims of the armed conflict in Ukraine. The decree is to enter into force on the day following its promulgation.

On 12 January 2023, the Upper House of the Polish Parliament took a vote on the Act on Family Foundations. The Act introduces the institution of family foundation into the Polish legal framework. The Senate made ca. 70 amendments to the Act, covering, inter alia, obligation to carry out an evaluation of the functioning of the regulations after three years of the foundation operation and submit it to the parliament. Moreover, Senators voted in favour of applying the Estonian CIT scheme by family foundations. The majority of changes met with the government’s approval. The Act is now again to be submitted before the Sejm. New regulations on family foundations are to enter into force 3 months after publication in the Polish Journal of Laws. 

In its judgment dated 11 January 2023 (case file II FSK 1241/22), the Supreme Administrative Court pronounced itself in the case of a company intending to establish a tax group with other entities.

The group-forming entities wanted to know whether, after forming the group, they could enjoy the protective force of tax rulings they obtained before the formation. According to the tax authorities, the inquiry goes beyond the procedure governing the granting of individual rulings, as it would not concern tax obligations, but issues related to the protective value of previously issued individual rulings and provisions addressed to tax authorities. The Supreme Administrative Court replied, however, that making a request for a ruling does not go beyond the material scope of individual rulings. At the stage of examining an application for a ruling, it is not important how the specific ruling will fulfil its protective function. This issue will become of importance only when the applicant faces any possible consequences when acting in line with it.

In its judgment dated 11 January 2023 (case file II FSK 1238/22), the Supreme Administrative Court pronounced itself in the case of a municipality, which applied for a ruling on tax scheme reporting requirements. The tax authority refused to launch the proceedings, since, in its opinion, the municipality applied for a ruling on the provisions regulating the obligation to report tax schemes, which do not directly pertain to possible occurrence of tax liabilities and do not affect the amount thereof. According to the Court, however, substantive provisions of the Polish Tax Code on tax scheme reporting can be the subject of a ruling.

On 17 January 2023, the decree dated 22 December 2022 on reimbursement of costs for using private cars, motorcycles, and mopeds not owned by the employer for business purposes came into force.

The decree applies to the employer-covered costs of using vehicles for business purposes at rates per 1 kilometre of the vehicle's mileage. Pursuant to the new provisions, the new rates are as follows: for vehicles with engine capacity of up to 900 cm3 - up to PLN 0.89, for vehicles with engine capacity of above 900 cm3 - PLN 1.15, for motorcycles - PLN 0.69, for mopeds - PLN 0.42. The rates previously applied were: for vehicles with engine capacity of up to 900 cm3 - PLN 0.5214 , for vehicles with engine capacity of above 900 cm3 - PLN 0.8358, for motorcycles - PLN 0.2302, and for mopeds - PLN 0.1382.

In 2023, to major amendments to the Labour Code can be expected. Recently, the Sejm passed an act containing provisions on remote work and sobriety tests. As per the applicable rules, the act is to enter into force 14 days after promulgation. The act now awaits the President’s signature. Importantly, a new bill on holiday, working time, and employment contracts was submitted before the Sejm. Its purpose is to implement two EU directives: the Directive on transparent and predictable working conditions in the European Union and the Directive on work-life balance for parents and carers. New provisions are to bring, inter alia, parental leave of up to 9 weeks for each parent and carers’ live of 5 days in a calendar year.

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