KPMG Weekly Tax Review 23.10 - 30.10.2023

The Ministry of Finance proposed a raft of amendments to enable National e-Invoicing System (KSeF) implementation.

Firstly, it published a draft decree amending the decree on the detailed scope of data provided via tax returns and VAT records, which has been put out to public consultation. Comments regarding the draft can be submitted until 14 October to sekretariat.PT@mf.gov.pl. New provisions are expected to enter into force on 01 July 2024.

Secondly, the Ministry launched public tax consultations regarding new JPK_VAT (SAF_VAT) logical structures, including JPK_V7M and JPK_V7K returns. The consultation process is open to all interested entities. Opinions - in the form of editable documents - should be sent by email to: konsultacje.jpkvat@mf.gov.pl by 16 October 2023. 

On 27 October 2023, the Ministry of Finance announced that it started working on extending the deadline for submitting Transfer Pricing Information forms - TPR-P and TPR-C - by 3 months. Consequently, the new deadline for TP reporting for 2022 will not be the end of November this year, but the end of February 2024. The deadline is to be extended primarily because of numerous inquiries regarding the upcoming deadline for submitting the Transfer Pricing Information and availability of online forms enabling the submission of TPR Information via electronic means of communication.

On 23 October 2023, a bench of seven judges of the Supreme Administrative Court passed a resolution affirming that a taxable person can be struck off the Active VAT Taxpayer Register without notice and without issuing a corresponding decision (case file I FPS 3/23). According to the Court, striking a taxable person off the Active VAT Taxpayer Register pursuant to Article 96(9)(5) of the VAT Act takes form of a material and technical act. Moreover, striking off a register kept by the authority is not done by way of ruling, but a factual act performed by the authority.

On 24 October 2023, it was announced that the Head of the National Revenue Administration issued a clearance opinion on a free-of-charge annuity established by the general partner for limited partners withdrawing from the partnership (case file DKP2.8083.2.2023). The analysed act consisted in establishing a free-of-charge, lifetime annuity by the general partner of a limited partnership, designed for the partnership’s limited partners being first degree direct relatives. Next, the limited partners were to withdraw from the partnership through terminating the partnership agreement. According to the Head of the National Revenue Administration, the goal of the analysed act is not to evade taxation, meaning that the authority agreed to issue a relevant clearance opinion.

On 24 October 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 reverse transfer of shares in companies through re-registering a public limited company as a general partnership and subsequent liquidation of the partnership. The act under examination consisted in dividing the liquidation assets of the general partnership established as a result of re-registering a holding company in a way that would result in the original share structure not being restored, because the reason for its establishment that justified its existence has no longer been valid.

According to the Head of NRA, obtaining a tax benefit was the primary or at least one of the primary purposes behind performing the transaction. Importantly, the authority stated that the applicants’ activities were artificial in nature. Furthermore, the Head of the National Revenue Administration found the applicants’ actions in breach of the purpose of the PIT Act, of the object and purpose of Article 17(10(4) in conjunction with Article 24(50(3) and Article 30a(2)(4) of the PIT Act, and of the purpose of the CIT Act, especially Article 14(1) thereof. As a result, a clearance opinion was denied.

In its judgment dated 19 October 2023 (case file III SA/Wa 1500/23), the Regional Administrative Court in Warsaw found Article 30da of the PIT Act compatible with EU law. The CJEU pronounced itself on the taxation of the unrealized capital gains, e.g., in the judgments of 29 November 2011, case C-371/10 (National Grid) and 11 March 2004, case C-9/02 (Hughes de Lasteyrie du Saillant). The Polish provision remains in line with the principle of proportionality, as is brings limitations in the form of the value of the transferred assets or the possibility to spread the tax into instalments.

The European Commission has published the Burden Reduction Package, the goal of which is to reduce burdens associated with reporting requirements by 25%. Some of the measures are:

• adjusting the thresholds of the accounting Directive: the balance sheet total and the net turnover threshold, defining micro-, small, medium-sized and large businesses, will be increased by 25%.
• on 17 October 2023, the European Commission adopted a Delegated Directive amending the Accounting Directive.
• the Corporate Sustainability Reporting Directive (CSRD) strengthens the rules concerning the social and environmental information that companies have to report.
• on 17 October 2023, the European Commission submitted a proposal of a decision postponing the adoption of sustainability reporting standards for certain sectors and for certain third-country undertakings. The proposed adoption date is now 30 June 2024.

On 24 October 2023, the Supreme Administrative Court delivered judgment (case file I FSK 2201/18) regarding a company acting as a manager of an investment project. The object of the company is to manage investment processes, in which it does not independently perform any of the activities described in Article 41(12) the VAT Act. The company inquired whether the comprehensive investment process management service it provided, consisting in the construction of a residential premises, was subject to VAT at the rate of 23%.

According to the Court, there is no doubt that the company provides comprehensive services, which, by nature of investment and construction processes, consist of various stages of work, phases and activities that together form a whole. The individual components are not only complementary to each other, but also necessary as they make it possible to achieve the goal of creating the final product. Moreover, from tax perspective, the entire performance is covered by the highest VAT rate anyway, so it is generally difficult to find any negative consequences of such a qualification.