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 29 December 2022, the Ministry of Finance announced the launch of public consultation on the new logical structure of internal records kept by the members of a VAT group, i.e., the JPK_GV(1) structure. The structure enables VAT group members to submit to the tax office, starting from 1 July 2023, records of activities performed within the VAT group for monthly periods by the 25th day of the month following each subsequent month.

On 23 December 2022, a notice of the Minister of Finance dated 20 December 2022 on base interest rates and margin rates established for the purposes of transfer pricing for personal and corporate income taxes was published in the Official Gazette of the Government of the Republic of Poland [Monitor Polski]. The notice sets forth base interest rates for loans, applicable as of 1 January 2023, depending on the currency in which the loan was granted, along with margin rates used to determine the interest rates for loan, credit and bond issue transactions entered into by and between related entities and giving the right (as one of the prerequisites) to apply the simplified TP safe harbour regime.

On 21 December 2022, the act of 01 December 2022 amending the act on excise duty and certain other acts was published in the Polish Journal of Laws. The new regulations extend the temporary exemption of sales of motor fuels from retail tax (until 30 June 2023). The act also postpones the application of the property tax exemption for rail freight terminals until 01 January 2024.

In its judgement dated 22 December 2022 (C-553/21), the CJEU ruled that the principle of effectiveness and the principle of proportionality, as a general principle of EU law, must be interpreted, in the context of implementing a provision such as that in the fourth indent of Article 5 of Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity – which allows Member States to apply, under certain conditions, differentiated rates of taxation between business and non-business use, for energy products and electricity referred to in that directive – as precluding national legislation under which the competent authorities of a Member State are required to reject, automatically and without exception, an application for tax relief lodged within the period for assessment of the tax at issue as laid down in national law, on the sole ground that the applicant failed to comply with the period prescribed by that law for the submission of such an application.

The European Commission has approved a Polish EUR 1.1 billion scheme to compensate energy-intensive companies facing important difficulties.

The compensation will be granted through direct subsidies to small, medium-sized and large energy-intensive entities that qualify as energy intensive businesses and that are active in particularly affected sectors and sub-sectors. Credit and financial institutions will be excluded from the measure. The overall aid per beneficiary will not exceed 50% of the eligible costs, up to a maximum of EUR 4 million. Energy-intensive companies active in particularly affected sectors that incur operating losses may receive further aid. The aid will be granted until 31 December 2023.

On 20 December 2022, the Secretary of State at the Ministry of Finance signed three subsequent agreements under the Cooperative Compliance Program, giving six such agreements in total.

The Cooperative Compliance Program is a form of close and ongoing cooperation between the Head of the National Revenue Administration (NRA) and taxpayers. The goal thereof is to ensure that the taxpayer complies with the tax law, with active support of the Head of the NRA. The cooperation is to ensure the correct settlement of tax liabilities via returns submitted on an ongoing basis, while limiting the supervision over taxpayers. The Cooperative Compliance Program is intended for business entities with revenue of above EUR 50 million.

On 30 December 2022, the Ministry of Finance published tax clarifications regarding statements and applications influencing the amounts of personal income tax advances calculated and withheld by PIT remitters. The clarifications provide general explanations related to entities acting as PIT remitters and the types of statements and applications, along with the rules of submission and effects thereof. The clarifications consider the legal status in force from 01 January 2023, including provisions of Articles 31a, 31b and 31c of the PIT Act, brought by the “Lower Taxes” Act and apply to income earned in 2023. 

On 30 December 2022, the Ministry of Finance published tax clarifications regarding the PIT relief for taxpayers under 26 years of age. According to the clarifications, taxpayers can apply the relief until (and including) their 26th birthday. If this day falls on Saturday or a statutory holiday, the date should not be “shifted”. Revenues covered by the relief form a finite catalogue and are limited to income from full-time employment, personally performed activity under a contract of mandate, graduate practice, apprenticeship and maternity allowance. Application of the relief impacts the amount of tax-deductible costs of full-time job and personally performed activity under a contract of mandate. The relief for young taxpayers, however, has no impact on the general rules of using tax-deductible costs by employees and contractors.

In its judgment dated 15 December 2022 (case file II FSK 1254/20), the Supreme Administrative Court pronounced itself in the case of a company holding a positive decision on providing investment support. The decision determines the activities of the company eligible for the support in line with the Polish Classification of Goods and Services (PKWiU) as well as real estate used to implement new investment projects. The company already conducts business activity in the scope classified under the same categories of PKWiU solely in the area indicated in the decision. The company was not sure about the scope of exemption provided under Article 17(1)(34a) of the CIT Act. According to the Court, the exemption shall be applied to the total revenue earned from the business activities specified in the decision, conducted in the decision-determined area (subject to the appropriate exemption limit). There are no grounds to believe that, in the situation presented by the company, only the income related to the implementation of a given investment project would be exempt.

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