KPMG Weekly Tax Review 02 OCT - 09 OCT 2023

On 05 October 2023, the Court of Justice of the European Union (CJEU) rendered judgment in reply to the question of whether a beverage containing milk can be subject to different reduced VAT rates, referred for a preliminary ruling (C-146/22).

According to the CJEU, EU law must be interpreted as not precluding national legislation which provides that foodstuffs consisting of the same main ingredient and meeting the same need on the part of the average consumer are subject to two different reduced VAT rates, depending on whether they are sold at retail level in shops or are prepared and served hot to a customer at his or her request, with a view to their immediate consumption, provided that those foodstuffs do not have similar properties despite having a main ingredient in common or that the differences between those foodstuffs, including as regards the support services accompanying their supply, have a significant influence on the decision of the average consumer to purchase one or the other of those foodstuffs. 

On 06 October 2023, a draft regulation of the Minister of Finance amending the regulation on the types of documents that do not need to be signed or sealed by users of e-Tax Office was published.

The amendments, inter alia, extend the application of the regulation to documents submitted by users of an organizational unit account. They also expand the list of documents that do not need to bear a signature or a seal when submitted by users of a natural person account or organizational unit account with documents regarding BRI (Binding Rate Information), as well as returns, testimonies, declarations, applications, notices, information and motions generated using e-forms to be made available in the e-Tax Office.

The regulation is to enter into force on the day following its promulgation, except for the part relating to BRI documents, which is to become effective on 01 January 2024. 

The e-Tax Office now offers a new service allowing individuals and organizations to submit applications for reimbursement of costs of purchasing cash registers.

The service was first made available to individuals, but from September 27 it can also be used by organizations. Moreover, the e-Tax Office account can be used to check balance and details of income tax, VAT and capital duty settlements. Users can also access information on the filed returns and statements, settlements, payments made (including interest collected), reimbursement received, payments that were not credited to the correct account due to incorrect description and other settlement details. Accounts of organizations are now to offer information on notices, enforcement orders accompanied by enforceability clause or recommended contact with the tax office in the event of submitting an incorrectly completed document.

On 29 September 2023, the Supreme Administrative Court delivered judgment in the case of a foundation owning a fleet of vehicles used in its statutory and business activities (ref. II FSK 271/21). The fleet includes race cars driven by foundation racers in sports competitions. The foundation wanted to know whether depreciation write-downs of race cars, car insurance premiums, and expenses related to the use of cars would constitute tax-deductible costs. According to the Court, the application for tax ruling suggests that the foundation runs a business in the field of car sales and plans to advertise itself in motor sports using rally cars bearing its logo. In fact, such activities are aimed at promotion of the foundation. Consequently, if such a description of a future event is adopted, there is no reason to deny the possibility of recognizing this type of expenses as advertising costs potentially related to revenues.

In response to a parliamentary inquiry no. 44098 dated 28 September 2023, the Minister of Finance explained that the number of properties in which the first-time homebuyer holds share has no impact on their right to use capital duty exemption, as long as none of such shares exceeds 50% and such shares have been acquired solely by inheritance.

During the meeting held on 03-04 October 2023, the Monetary Policy Council decided to cut the NBP reference rates by 0.25 percentage, meaning that now they amount to:

• reference rate: 5.75% annually
• lombard loan interest rate: 6.25% annually
• deposit rate: 5.25% annually
• rediscount rate: 5.80% annually
• discount rate on bills of exchange: 5.85% 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 14.5% on an annual basis.

On 28 September 2023, Advocate-General of CJEU delivered his opinion in case C-509/22 (Girelli Alcool Srl). According to the Advocate-General, the concept of ‘unforeseeable circumstances’ used in Article 7(4) of Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12/EEC must be interpreted as relating to abnormal and unforeseeable circumstances extraneous to the authorized warehousekeeper, the consequences of which, despite the exercise by him of all due care, could not have been avoided. The requirement that the circumstances be extraneous to the authorized warehousekeeper is not limited to circumstances that are extraneous to him or her in a material or physical sense but are those ‘which are objectively outside the authorized warehousekeeper’s control or situated outside his sphere of responsibility’.

The full text of the opinion can be accessed at: https://curia.europa.eu/juris/document/document.jsf?text=&docid=277946&pageIndex=0&doclang=PL&mode=req&dir=&occ=first&part=1&cid=2349323

On 29 September 2023, the Income Taxes Department at the Ministry of Finance published Transfer Pricing Tax Clarifications vol 6 relating to the cost-plus method. The goal of tax clarifications is to explore some practical aspects of using the cost-plus method and to increase tax security of taxable persons. The clarifications relate, inter alia, to how the cost-plus method should be applied, comparability criteria, and errors in using the method. Moreover, they include a comparison with other pricing methods and provide examples of the practical application of the cost-plus method.

Full text of tax clarifications can be found at: https://www.podatki.gov.pl/media/9578/obja%C5%9Bnienia-podatkowe-koszt-plus.pdf (podatki.gov.pl)

The Ministry of Finance made available individual data on CIT payers for taxable year 2022 (as at 01 August 2023). According to the data, 2022 returns were submitted by, inter alia, 71 tax groups and 3,467 real estate companies. The highest CIT paid was PLN 4,370,329,255. More data can be found at: 2022 - Ministerstwo Finansów - Portal Gov.pl (www.gov.pl).