Welcome to the next issue of the “Weekly Tax Review” prepared in cooperation with tax experts in KPMG in Poland.
On 11 September 2023, a notice of refusal to issue a clearance opinion by the Head of the National Revenue Administration (NRA) was published. The subject of the application was the right to deduct tax-deductible costs of selling shares received in transactions/settlements between related entities (case file DKP2.8082.11.2022).
The Head of NRA stated that performing the activities described in the Application would lead to establishing an ownership structure allowing the Applicants to recognize increased tax-deductible costs upon selling the shares and, consequently, artificially decrease the tax due. As a result, a clearance opinion was denied.
On 12 September 2023, the European Commission adopted a new important business tax agenda to reduce compliance costs for large cross-border businesses in the EU. BEFIT is a common consolidated corporate tax base, allowing groups of companies operating in the EU (with an annual combined revenue of at least €750 million), to calculate the CIT tax base in a unified way for all EU countries in which they operate. The key objectives of BEFIT are:
- increasing resilience of businesses by reducing the complexity of tax rules and the compliance costs incurred by cross-border EU businesses
- removing obstacles to cross-border investments and making the single market a more attractive location for international investment
- creating an environment conducive to fair and sustainable growth by paving the way for administrative simplification, and
- providing sustainable tax revenue.
On 11 September 2023, the Head of the National Revenue Administration issued a clearance opinion on a two-stage liquidation of a company as part of activities conducted within a group of companies (case file DKP3.8082.9.2022).
The case related to a restructuring, as part of which one of companies contributes an organized part of the enterprise, only to be acquired and, subsequently, liquidated by another company.
According to the Head of the National Revenue Administration, although the background presented indicates that all the participants of liquidation proceedings will obtain a tax benefit, it is not the primary goal of performing the activities and the modus operandi adopted by the applicants is not of artificial nature.
Considering that not all the conditions for the application of the anti-avoidance clause have been met, the tax authority decided to issue a clearance opinion.
On 06 September 2023, the Supreme Administrative Court issued a judgment on rules for imposing real estate tax on fuel and gas dispensers (case file III FSK 653/23).
In the grounds for the judgment, the Court referred to the ruling of the National Administrative Court dated 30 May 2023 (case file III FSK 48/22), relating to the same company, which indicated that fuel dispensers constitute building equipment, i.e., technical equipment related to a building object in in the form of a fuel tank, constituting a structure within the meaning of the Construction Law, making it possible to use that structure in accordance with its intended purpose, and therefore a structure within the meaning of Article 1a(1)(2) of the Act on Local Taxes and Duties. In turn, even though a gas station is referred to as a single building object, from the perspective of the Act on Local Taxes and Duties, it is most often a complex of building objects, which may include a building, underground storage tanks for liquid fuels, underground and above-ground liquid gas tanks, dispensers of liquid fuels and liquefied gas, water, sewage and energy installations, driveways and roofs, as well as other service equipment and auxiliary premises.
On 08 September 2023, a notice of refusal to issue a clearance opinion by the Head of the National Revenue Administration (NRA) was published. The subject of the application was a transaction consisting in making an in-kind contribution of shares to a registered partnership and then re-registering it as private limited liability company (case file DKP3.8082.3.2023).
According to the Head of NRA, the economic goals indicated in the application do not justify carrying out the activities in the manner described by the applicants, which should be considered contrary to the intention of the legislator. In fact, a rationally acting entity with no intention to obtain a tax benefit would not form a holding company that would not be its intended form of business. Consequently, the Head of the National Revenue Administration stated that the presented circumstances indicate that Article 119a §1 of the Tax Code may apply to the tax benefit specified in the application resulting from the planned activity. It was therefore necessary to deny a clearance opinion.
In its judgment dated 14 September 2023 (case file C-820/21), the CJEU stated that Article 16(1) of Council Directive 2008/118/EC must be interpreted as not precluding national legislation which provides for the withdrawal of an authorization to operate a tax warehouse in the event of a failure to comply with the excise duty arrangements, provided that that withdrawal, having regard to its definitive nature in particular, does not constitute a measure that is disproportionate to the seriousness of the offense, even though a financial penalty for the same act was earlier imposed. In the event that those two penalties are criminal in nature, Article 50 of the Charter of Fundamental Rights of the European Union must be interpreted as not precluding such national legislation, given that they are provided for by law, relate to different aspects of the same unlawful conduct, are coordinated and are proportionate to the seriousness of the offense.
On 11 September 2023, the European Commission published a summer forecast for Polish GDP and inflation. In 2024, GDP growth in Poland will be the highest among large EU economies, and it will also be higher than the average for the EU (1.4%) and the euro area (1.3%). Private consumption is set to be the main growth driver with investment projected to positively contribute to GDP growth in 2024 to a lesser extent. The Polish economy is expected to grow by 0.5% The EC revised down the forecast of average annual inflation in Poland (measured by the HICP index) in 2023 to 11.4%. In 2024, inflation is to decrease to reach 6.1%, which is a slight change compared to the previous forecast of 6.0%.
On 14 September 2023, the Council of Ministers adopted a draft decree providing for two increases of the minimum wage in 2024. The draft provides that in 2024 the minimum wage will increase from the current PLN 3,600 to PLN 4,242 from 1 January and to PLN 4,300 from 1 July. The minimum hourly rate will be increased to PLN 27.70 and PLN 28.10, respectively.