KPMG Weekly Tax Review 08 JAN - 15 JAN 2024

A new bill on protecting individuals reporting breaches of law was published on the Government Legislation Centre’s website. The key amendments brought by the latest version of the bill cover:

1. the scope and the definition of reportable breaches of law;
2. legal status of individuals reporting breaches of law (whistleblowers);
3. conditions for placing reporting individuals under legal protection;
4. reporting breaches via internal channels;
5. reporting breaches via external channels;
6. public disclosures;
7. forms of protection of reporting individuals.

Compared to the previous version, the latest version of the bill: 

• replaces the National Labour Inspectorate by the Ombudsman, as a body to support whistleblowers;
• grants a possibility to provide the reporting person with certification that they qualify for the protection under the bill.

It is also proposed that the act enter into force one month after its promulgation.

On 9 January 2024, the Supreme Administrative Court delivered a judgment in case II FSK 434/21 stating that in light of Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services, benefits rendered to workers posted to a different EU State cannot be treated as a component of remuneration under labour law, and - in consequence - under Article 12(1) in conjunction with Article 11(2-2b) of the PIT Act. This is because they are not free-of-charge benefits, as they are fully borne by employers. 

Assumptions of the bill on cryptoassets were added to the list of legislative work and policies of the Council of Ministers. The bill provides for:

• defining the obligations of issuers of asset-referenced tokens and e-money tokens as well as cryptoasset service providers, including the obligation of issuers to inform the Polish Financial Supervision Authority on their activities subject to the authority's assessment;
• granting the Polish Financial Supervision Authority supervisory competences to counteract infringements that may be committed by the supervised entities;
• making it possible for the Authority to impose penalties on issuers and persons seeking admission to trading in cryptoassets,
• introducing criminal liability of supervised entities,
• specifying the scope and rules of keeping professional secrecy in terms of information received in the course of provision cryptoasset services.

The Council of Ministers plans to pass the bill in Q2 2024.

On 9 January 2024, the Council of Ministers approved the summary of the direction and schedule of legislative work implementing the so-called holiday for business (contribution holiday), submitted by the Minister of Development and Technology. Importantly, according to the assumptions approved by the government, the holiday period was reduced from three to one month. Furthermore, the Council of Minsters approved the summary of the direction and schedule of legislative work relating to sickness pay provided by the Polish Social Security Administration to employees, starting from the first day of their absence, submitted by the Minister of Family and Social Policy. 

During the meeting of the Monetary Policy Council held on 8-9 January 2024, it was decided to keep the NBP interest rates unchanged, i.e.:

• reference rate at 5.75% annually
• Lombard loan interest rate at 6.25% annually
• deposit rate at 5.25% annually
• rediscount rate at 5.80% annually
• discount rate on bills of exchange at 5.85% annually.

Changes to the reference rate affect other financial parameters, e.g., the amount of interest on tax arrears. Given that the rates remain unchanged, interest on tax arrears continues to amount to 14.5% on an annual basis.

The Ministry of Finance announced the activities it is to undertake in 2024. The Ministry is to analyse the tax system to make it more taxpayer-friendly and pro-investment. Another priority is to implement and further develop KSeF (the National e-Invoicing System) to continue to make it available after 2026. Other activities include:

• extending vacatio legis for tax amendments;
• undertaking activities and analytical work in order to deeper investigate the phenomenon of grey economy and develop tools aimed at reducing it;
• simplifying tax procedures, boosting effectiveness of tax authorities, improving the relations between taxpayers and tax authorities and clarifying provisions that raise taxpayers’ doubts;
• participating in shaping knowledge-based fiscal policy by conducting comparative analyses, including interpretation and assessment of legislative solutions developed by EU, OECD or other countries;
• facilitating business activities in the field of excise duty and fees on foodstuffs;
• amending the Fiscal Criminal Code.

On 10 January 2024, the Supreme Administrative court rendered a judgment (case file II FSK 449/21) pertaining to the method of determining the maximum surplus of the debt financing costs that a company can charge in the given taxable year into tax-deductible costs.

According to the Regional Administrative Court, pursuant to the CIT Act, when the surplus of debt financing costs exceeds the value of the "safe harbour", then - and only then - the value of the surplus over PLN 3,000,000 should be referenced to 30% of the surplus of the sum of revenues over the sum of costs, and these sums are subject to appropriate modifications, in accordance with Article 15c(1) of the CIT Act. As long as the value of surplus over PLN 3,000,000 does not exceed the said 30% of surplus of revenues over the sum of costs, the taxable person can charge the debt financing costs into tax-deductible costs. This, however, ceases to apply when the set 30% is exceeded.

The Supreme Administrative Court upheld the lower court’s decision and dismissed the authority’s cassation appeal. It based its decision on the established jurisprudence, including the judgments of 20 October 2021 (case file II FSK 949/20) and 26 October 2021 (case file II FSK 979/21).