Welcome to the next issue of the “Weekly Tax Review” prepared in cooperation with tax experts in KPMG in Poland.
The Notice of the Minister of Finance dated 21 July 2023 regarding upper limits of local taxes and fees for 2024 was published on 01 August 2023.
The Notice specifies the upper limits in real estate tax and transportation tax as well as other local fees (including marketplace fee, resort tax, and dog tax). The final amount of the real estate tax for 2024 will be set by the council of municipality where the subject of tax (land, building or structure) or fee is located.
The tax/fee rate cannot exceed the maximum one set forth by the Act on Local Taxes and Duties, to which the Notice of the Minister of Finance refers.
Pursuant to the Notice, starting from 01 January 2024:
1. Maximum real estate tax rates per 1 sq. m. of:
- used in business activity, regardless of how it is classified in the land and building register, cannot exceed the amount of PLN 1.34
- other types of land, including land occupied to pursue paid statutory business by public benefit organizations, cannot exceed the amount of PLN 0.71.
b) buildings of parts thereof, per 1 sq. m of usable area for:
- residential premises, cannot exceed the amount of PLN 1.15
- buildings used to conduct economic activity and residential buildings or parts thereof occupied to conduct economic activity, cannot exceed the amount of PLN 33.10
- other types of buildings, including buildings occupied to pursue paid statutory business by public benefit organizations, cannot exceed the amount of PLN 11.17.
2. The transportation tax rate for heavy goods vehicles as defined by Article 8(1) of the Act cannot exceed, depending of the vehicle weight:
a) PLN 1,173.19 for weight over 3.5 tons up to and including 5.5 tons
b) PLN 1,957.12 for weight over 5.5 tons up to and including 9 tons
c) PLN 2,348.52 for vehicles above 9 tons.
3. The rate of:
a) marketplace fee cannot exceed PLN 1,096.39 per day
b) advertising fee cannot exceed PLN 3.62 per day.
On 28 July 2023, the Supreme Administrative Court rendered a judgment in a case (ref. no. II FSK 174/21) of a taxable person operating as a sole trader in the area of advertising services rendered online. The taxable person had doubts whether it should treat the revenue from awards subjected by the competition organizer to a 10% lump-sum tax as revenue from the conducted business activities and subject to taxation accordingly.
According to the Court, in the case under consideration, the benefit is clearly received as part of business activity. Thus, the revenue therefrom should also be classified in this way. In other words, only prizes granted to competitors being natural persons not conducting non-agricultural business activity should be treated as revenue from other sources as referred to in Article 20(1) of the PIT Act. Consequently, revenue from prizes granted to competition winners, i.e., natural persons not conducting non-agricultural business activity should be subject to 10% lump-sum income tax.
On 01 August 2023, the Supreme Administrative Court delivered judgment in the case II FSK 270/21 relating to a company posting employees in other EU countries under memoranda of understanding (annexes) to employment contracts, which temporarily changed the employees’ place of work. According to the Court, employees subject to short-time posting by the Polish company should be treated, in principle, in line with the provisions of Directive 96/71/EC and Directive 2014/67/EC concerning the method of reimbursements for posted workers. The above-referred Directives clearly indicate that the costs of travel and accommodation cannot be treated as constituents of the employee's remuneration. This results in detail from the provisions of the rank of EU regulations, which in the hierarchy of sources of law take precedence over national provisions. Since EU law clearly provides that such costs of travel and accommodation cannot be viewed as components of remuneration, they cannot be charged to the employee and - indirectly - to the company as the remitter under the tax law.
On 31 July 2023, the President signed the Act of 28 July 2023 on posting drivers in road transport into the law.
The provisions brought by the Act are in line with Directive (EU) 2020/1057 of the European Parliament and of the Council of 15 July 2020 laying down specific rules with respect to Directive 96/71/EC and Directive 2014/67/EU for posting drivers in the road transport sector and amending Directive 2006/22/EC as regards enforcement requirements and Regulation (EU) No 1024/2012. According to the Act, the key requirement for road transport operators posting drivers to Poland is, apart from ensuring proper conditions of employment, to submit a posting declaration to the competent authorities at the latest at the commencement of the posting and to ensure that the driver has at his or her disposal all the relevant documents in paper or electronic form. The essential part of the new provisions is to enter into force 14 days after publication of the act in the Polish Journal of Laws.
On 03 August 2023, the bill on the National Criminal Register was submitted before the Sejm. The solutions it brings are to improve the operation of the register and shorten the turnaround time. This, in turn, is to translate into better implementation of procedures, where it is necessary to verify information from the register. The system will be adapted to EU requirements, which concern the identification of European Union countries holding information on convictions issued against third-country nationals and the so-called stateless persons. Moreover, it is planned to automate the system of issuing certificates of clean criminal records for natural persons, entrepreneurs and public administration bodies. According to the bill, new provisions are to enter into force 9 months after publication in the Polish Journal of Laws.
On 01 August 2023, the Supreme Administrative Court delivered judgment in the case II FSK 2836/19. According to the Court, the requirement to pay WHT arises when a foreign entity receives income from a Polish tax resident, i.e., when the source of income is located in Poland. This means that the place of the supply of services, performing activities or making payments is of no relevance to the case examined.
According to the judgment dated 01 August 2023 rendered in the case I SA/Gl 423/23 by the Regional Administrative Court in Gliwice, an increased real estate tax should be applied both to real estate used in the taxable persons’ business activity and real estate that can potentially be applied for such purpose in the future. At the time of determination, the real estate does not have to constitute element of an enterprise within the meaning of Article 55(1) of the Polish Civil Code. According to the Court, real estate can only be excluded from the scope of the taxable person’s business activity if it is not and cannot be, even potentially, applied by that taxable person in their future business activity. In the examined case, the scope of activities listed by the taxable person in their National Court Register entry was too broad to preclude conducting business activity with the use of the disputed items.
By the reply dated 27 July 2023 to parliamentary inquiry no. 42274 the Minister of Finance supported the possibility of calculating solidarity levy considering losses incurred by the taxable persons in previous years. An interpretation unfavourable for taxpayers, denying the possibility of deducting the loss when determining the basis for calculating the solidarity levy, is based on the argument that “losses from previous years” are not referred to in Article 30h(2) of the PIT Act, which, importantly, does not make any reference to Article 9 thereof. When replying to the parliamentary inquiry, the Minister of Finance pointed to taxpayer-favouring interpretation of provisions and confirmed that the losses incurred in previous years can be accounted for when calculating the accounting basis for the solidarity levy. At the same time, the Minister announced that this issue will be further explained through tax clarifications.