KPMG Weekly Tax Review 15 JAN - 22 JAN 2024

During a press conference held on 19 January 2024, the Minister of Finance announced that the provisions on the mandatory use KSeF would not enter into force in 2024. This is due to deficiencies of the system detected.

This means that until the end of the year companies are not obliged to use KSeF, yet they can do so on a voluntary basis.

A new effective date is to be provided once an internal audit of the system is completed.

More information on this subject can be found in KPMG’s Tax Alert: Mandatory use of the National e-Invoicing System (KSeF) postponed

31 January 2024 is the deadline for filing PIT-11 forms for 2023. The forms must be sent to tax authorities using electronic means of communications only.

More information on this subject can be found in KPMG’s Tax Alert: PIT 11 - PIT-11 form and related challenges

In the judgment issued on 16 January 2024 in case II FSK 452/21, the Supreme Administrative Court revoked the individual tax ruling, according to which an employee receiving shares in a parent company of a Polish entity as part of an incentive plan had to pay tax three times: upon begin granted the right to shares, being granted the shares, and disposing of them. According to the Court, acquisition of financial derivatives and then shares based on them does not generate revenue, which arises only when the shares are sold, pursuant to Article 17(1)(10) of the PIT Act.

On 17 January 2024, the Supreme Administrative Court rendered a judgment in case II FSK 484/21 regarding a company, which was not sure whether it could include in tax-deductible costs not only the direct costs of acquiring the shares sold, but also the costs resulting from the amount of supplementary capital. According to the Court, the costs of acquiring or taking-up shares should also cover the costs directly associated with such a take-up, i.e., the costs that had to be incurred in order to enable the take-up or acquisition of shares. These include, in particular, the price per share and the share capital contributions. In the case of increasing the share capital with funds from the supplementary capital, the profit achieved by the company is also indirectly transferred under the taxable person's ownership. In case of the company, however, such circumstances do not occur. Consequently, when determining the tax-deductible costs of sale of shares in a private limited company [spółka z o.o.], the taxable person can include the costs directly related to the acquisition/taking-up of the sold shares, and not the costs resulting from the amount of the above-mentioned supplementary capital.

On 11 January 2024 CJEU rendered a judgment in case C-433/22, ruling that point 2 of Annex IV to Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as not precluding national legislation which provides for the application of a reduced rate of VAT to services relating to the renovation and repair of private dwellings on condition that the dwellings concerned are actually used for residential purposes at the time when those works are carried out.

On 12 January 2024, a bill amending the accounting act and certain other acts was added to the list of legislative work and policies of the Council of Ministers.

Amendments to the accounting act are to supplement the new obligations brought by the provisions on exchange of tax information. One of the key changes is the obligation of public disclosure of country-by-country reports on income tax imposed on large multinationals.

Information will have to be disclosed separately for all EEA states where the company operates, including tax havens. For other tax jurisdictions, information will be presented in aggregate form.

The Council of Ministers plans to pass the bill in Q1 2024.

On 18 January 2024, it was announced through a press release that the Council and Parliament found a provisional agreement on parts of the anti-money laundering package that aims to protect EU citizens and the EU's financial system against money laundering and terrorist financing. The provisional agreement on an anti-money laundering regulation will, for the first time, exhaustively harmonize rules throughout the EU, closing possible loopholes used by criminals to launder illicit proceeds or finance terrorist activities through financial systems of Member States.

On 18 January 2024, the Lower House of the Polish Parliament passed the 2024 budget bill. A total of 240 Members of Parliament voted in favour of the bill, 191 were against, and 3 abstained. According to the budget bill, state income for 2024 is planned at nearly PLN 682.4 billion. Moreover, almost PLN 603.9 billion will come from taxes. In turn, the expenditures for 2024 are planned at ca. PLN 866.4 billion. It is anticipated that the deficit will not exceed PLN 184 billion, while the EU funds budget deficit is to amount to PLN 32.5 billion. The budget forecasts gross domestic product growth of 3% and inflation of 6.6%. Once approved by the Sejm, the budget bill will be examined by the Senate, which will continue its session on 24 and 25 January. If any amendments are proposed by the Senate, the budget bill will return to the Sejm and – in accordance with the work schedule adopted by the Sejm Finance Committee – and the amendments will be examined during the plenary session on 26 January 2024.