Welcome to the next issue of the “Weekly Tax Review” prepared in cooperation with tax experts in KPMG in Poland.
On 07 August 2023, a draft decree amending the decree on using the National e-Invoicing System (KSeF) was published. The draft decree, inter alia:
- brings the possibility to grant restricted access to KSeF in large, multi-entity organizations
- brings the possibility to issue or access invoices only for a given establishment (branch) of a legal entity or other internally separated unit of the entity (instead of all structured invoices related to that taxable person)
- enables authorized entities to grant, modify or revoke authorization to use KSeF through assigning unique identifiers, which allows to identify such entities and then to grant them authorization to issue or access invoices by the parent entity (taxable person).
New provisions are expected to enter into force on 01 September 2023.
On 11 August 2023, the Act dated 16 June 2023 amending the act on the value-added tax and certain other acts was published in the Polish Journal of Laws. The most important changes it brings are as follows:
- Mandatory e-invoicing will commence on 01 July 2024
- Cash register invoices and simplified invoices can be issued in their current form until 31 December 2024
- NIP-bearing cash register receipts will be treated as simplified invoices until 31 December 2024
- Consumer invoices (B2C) will be excluded from KSeF
- KSeF will not apply to tickets treated as invoices (including toll tickets)
- KSeF will also exclude OSS and IOSS invoices
- The exchange rate used to convert foreign currencies into PLN will be kept as at the day preceding the date indicated in field P_1 of the structured invoice and maintained by one additional day before the invoice is sent to KSeF
- Possible penalties are going to be relaxed and become applicable only from 01 January 2025
Correcting notes will be removed both inside and outside KSeF.
On 10 August 2023, a draft decree of the Minister of Finance regarding the method of collection of inheritance and donation tax by tax remitters was published. The purpose thereof is to respond to amendments brought to the act on the inheritance and donation tax on 01 March 2023. One of the amendments imposed on notaries, acting as tax remitters, the obligation to provide the head of the tax office, competent for the seat of the remitter, with written or electronic document listing the content of notarial deeds or data from these deeds regarding activities performed. The draft decree introduces similar amendments to the currently applicable regulations relating to the method of collecting tax by remitters, including:
a) activities related to tax collection (notaries - as tax remitters - are obliged to ensure that the legal basis for tax collection and the method of tax calculation or the legal basis for not collecting the tax is specified in every deed issued)
b) scope of instructions given to taxable persons
c) content of tax register
d) scope of data included in the declaration on the tax collected and remitted by the remitter.
The new provisions are expected to enter into force on 01 January 2024.
As already announced by the Minister of Digital Affairs, the government has abandoned amendments to the Act on Statutory Auditors, which were to be introduced by a government bill amending certain acts due to e-administration development. According to the abandoned amendments, data related to companies having their statements audited by statutory auditors would be sent to a single audit record database, meaning that all sensitive data of companies, including state enterprises, would be stored in a single place. The proposed amendments met with harsh criticism from business community, statutory auditors, tax advisors, accountants, and the Ombudsman for Small and Medium-Sized Enterprises.
On 09 August 2023, the Supreme Administrative Court issued a ruling in case II FSK 214/21 relating to a company owning a shopping centre. The company’s core activity consisted in renting retail space in a shopping centre to third parties. Starting from 01 January 2018, the Company must calculate and pay tax on revenues from buildings, in line with Article 24b of the CIT Act. The initial value of the fixed asset, determined as at the first day of each month and resulting from the records kept, is treated by the company as revenue subject to tax on revenues from buildings. The company wanted to know, whether the taxable base in income tax on revenues from a fixed asset should be fixed as at the first day of every month, because, in such case, in the company’s opinion, it should also be reduced by depreciation write-downs made in precedent months. According to the Supreme Administrative Court, given the conclusions stemming from dictionary interpretation, systemic interpretation, and interpretation of the objectives of provisions, it should be assumed that, in light of Article 24b(3) of the CIT Act, the initial value of a fixed asset as at the first day of the month should be established excluding depreciation write-downs made, but only taking into account possible improvements, disconnections of fixed asset components, etc. Notably, the same conclusion was reached in the judgment of the Supreme Administrative Court dated 09 August 2023, case file II FSK 213/21.
On 04 August 2023, the Regional Administrative Court in Warsaw issued a ruling in case III SA/Wa 873/23, relating to a company, which entered into a preliminary contract of sale of land plots. The Company inquired whether assignment of rights and obligations arising out of a notary deed under which rights and obligations resulting from a preliminary contract of sale of land were transferred should be subject to VAT as supply of goods for consideration. According to the Court, given that assignment contracts remain in the civil law domain and their objective is primarily of business character, i.e., they aim at transferring rights and obligations from the assignor to the assignee and not at supplying goods, it should be assumed that assignment of rights and obligations resulting out of a preliminary contract of sale of land should be treated as a service performed for the recipient against consideration, which, in this case, mean the specified payment received for assignment (i.e., the amount due for the company for the sale of rights to a plot of land) and, contrary to the company's claim, should not be perceived as a supply of goods.
On 03 August 2023, the Regional Administrative Court in Rzeszów rendered a judgment in case I SA/Rz 240/23 relating to a company selling designer footwear. When applying for a ruling, the company pointed to the fact that it entered in cooperation with social media influencers, consisting in offering them footwear in exchange of advertising the company’s products online. Some influencers do not run business activity, meaning that they do not issue invoices. This is why the company’s regulations state that for the footwear received, the influencer undertakes to perform an advertising service. The company wanted to know whether it can recognize tax-deductible costs of such an activity, even though it does not generate any income on this account. According to the court, however, transferring goods to influencers, who, in exchange of the product, agree to render an equivalent performance consisting in advertising the company, inter alia, in social media, must be treated as a barter contract, and, consequently, generates revenue for the company, in line with Article 12(1)(2) and Article 12(3) of the CIT Act.
The Ministry of Economic Development and Technology announced that on 12 September 2023 it will launch a call for proposals for co-financing of documentation related to investments in renewable energy sources, intended, inter alia, for energy clusters. The program consists of two stages. The goal of the first stage is to present a general concept and develop the project. In turn, the goal of the second one is to select 10 most advanced project which will receive funding. The call assumes selecting 139 out of projects submitted by energy clusters, energy cooperatives, and local governments. Proposals can be submitted by energy clusters, energy cooperatives, and local government units that are not members or coordinators of an existing energy cluster or a RES citizen energy community. The maximum amounts of co-funding in the first stage of the program (pre-investment part) are: PLN 1.55 million for energy clusters, PLN 400 thousand for energy cooperatives, and PLN 1.4 million for local government units. Proposals can be submitted electronically to: https://wod.cst2021.gov.pl/.