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Welcome to the next issue of the “Weekly Tax Review” prepared in cooperation with tax experts in KPMG in Poland.

On 06 September 2023, the Regional Administrative Court in Warsaw issued a judgment in the case of a taxable person participating in an incentive plan made available by her employer (ref. no. III SA/Wa 1275/23). As part of the program, the company’s shares would be subscribed for through and held on behalf of the participants by a special French fund. Dividends paid out by the company would be automatically re-invested in supplementary shares.

In the challenged tax ruling, the Head of the National Revenue Administration Service stated that the dividend amount re-invested in supplementary shares should be treated as the taxable person’s revenue which should become taxable when the dividend is transmitted by the company to the fund.

The Court, however, declared that the dividend paid by the company seated in France could be treated as the taxable person’s revenue only when it would actually be left at her disposal. Consequently, since the dividend is not physically paid to the taxable person, but placed in the special investment fund, the authority’s position should be treated as erroneous.

According to the CJEU’s judgment delivered on 07 September 2023 (case file C-323/22), the first sentence of Article 14(1) of Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products must be interpreted as meaning that the exemption from tax laid down in that provision does not apply to the warehousekeeper, which is liable for the payment of duty, in the case of a departure from the suspension arrangement owing to an unlawful act solely attributable to a third party, even where the warehousekeeper was wholly uninvolved in that unlawful act and had a legitimate expectation that the goods moved in accordance with the rules under the arrangement for the suspension of duty.

On 07 September 2023, a notice of refusal to issue a clearance opinion by the Head of the National Revenue Administration dated 27 July 2023 was published. The application related to a benefit paid to employees on account of their participation in an incentive program (case file DKP3.8082.2.2023). The Head of the National Revenue Administration stated that the main reason behind the applicant's action was to obtain a tax benefit in the form of being released from the obligation to collect and remit tax, which goes against the object and purpose of Article 10(4) of the PIT Act, and that the adopted modus operandi was of artificial nature. Pursuant to Article 10(4) of the PIT Act, revenue from the exercise of rights arising from phantom shares should be classified under revenue from employment relationship, should such shares be awarded to participants free of charge. A nominal fee borne by participants under the incentive program allowed for the non-application of the above-mentioned provision. As a result, the Head of the National Revenue Administration denied a clearance opinion.

During the meeting held on 05-06 September 2023, the Monetary Policy Council decided to cut the NBP reference rates down by 0.75 percentage points, meaning that now they amount to:

  • reference rate – 6.00% annually
  • lombard loan interest rate – 6.50% annually
  • deposit rate – 5.50% annually
  • rediscount rate – 6.05% annually
  • discount rate on bills of exchange – 6.10% annually.

Changes to the reference rate affect other financial parameters, e.g., the amount of interest on tax arrears (200% of the basic lombard loan interest rate + 2%, except that the rate may not be lower than 8%), which now amounts to 15% on an annual basis as well as the limit of notional interest deduction and of a reduction in the amount of tax liability in the event of payment of VAT in full from a VAT account earlier than the deadline for paying the tax.

The Council’s resolution shall enter into force on 07 September 2023.

On 04 September 2023, the Ministry of Finance issued a draft decree on cases of properly documented supplies of goods or services in which the taxpayer is not obliged to issue structured invoices. According to the planned amendments, structured invoices do not need to be issued for the following services:

  1. Using a toll motorway documented by invoices issued in the form of a single fare ticket by VAT payers authorized to provide such services;
  2. transport of passengers - over any distance - by means of standard-gauge railways, car fleet, sea-going ships, inland and coastal transport means, ferries, airplanes and helicopters, documented by invoices issued in the form of a single fare ticket by VAT payers authorized to provide such services;
  3. air navigation and control services, subject to route charges, excluding services covered by 0% VAT, documented by invoices issued on a monthly basis by the Central Route Charges Office of the European Organization for the Safety of Air Navigation on behalf of the Polish Air Navigation Services Agency.

The decree is expected to enter into force on 01 July 2024.

On 07 September 2023, the official launch of the tax audit assistance program for the Kingdom of Bhutan took place. Polish experts are to support Bhutanese fiscal administration in effectively conducting audits in cross-border transactions, with a focus on international taxation and transfer pricing. The program is provided under the Tax Inspectors Without Borders initiative of the Organisation for Economic Co-operation and Development (OECD) and the United Nations (UN), designed to support developing countries in building tax audit capacity. As part of it, tax professionals from across the world aid partner countries, by supporting them in building their tax audit capacity. The goal of TIWB is to share knowledge, skills and best practices. The Ministry of Finance has been cooperating with TIWB since 2023.

The Ministry of Finance announced the launch of tax consultations regarding new tax form templates submitted by CIT payers, namely:

  1. CIT-NZ(2), relating to exit tax referred to in Article 24f of the Act of 15 February 1992 on Corporate Income Tax (CIT Act);
  2. CIT-CFC(5) and CIT/CFI(3), relating to tax on CFC gains referred to in Article 24a of the CIT Act.

The consultations are open to all stakeholders, especially taxable persons obliged to use the above-mentioned templates, and will last for 7 days from the date the templates are made available, i.e., until 14 September 2023. Opinions with explanations should be sent by email to: Konsultacje.WzoryCIT@mf.gov.pl.

The Deputy Minister of Finance stated that the Ministry would abandon further works on amendments to the Polish Tax Code, referring to a bill put into pre-consultation in June 2023. The proposed amendments related, inter alia, to suspension of the limitation period for tax arrears due to launching customs and fiscal audit. As emphasized by the Deputy Minister, at present, the government does not foresee any further amendments to the Tax Code. Moreover, the Deputy Minister explained that the only goal of the pre-consultations was to obtain opinions, remarks and comments, the analysis of which could allow for the development of better tax solutions. He also noted that the Ministry of Finance often carries out consultations on the amendments being considered, with the goal of introducing new, taxpayer-facing solutions.

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