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Welcome to the next issue of the “Weekly Tax Review” prepared in cooperation with tax experts in KPMG in Poland.

In the general ruling dated 13 February 2024, the Minister of Finance stated that the costs eligible to be covered by the R&D credit include the expenditure incurred in the given month to make payments listed in Article 12(1) of the PIT Act and cover the related contributions by the remitter, as stipulated by the Act on the Social Insurance System, to the extent that the time allocated to the implementation of research and development activities remains in the employee's overall working time in a given month. Importantly, according to the Minister, such costs also cover payments for excused absence of the employee, which must be incurred by the employer under separate provisions, including provisions on annual leaves and sick leaves.

On 21 February 2024, a bench of three judges of the Supreme Court adopted resolution no. III UZP 8/23, according to which a shareholder of a two-person private limited company owning 99% shares therein is not subject to social security under Article 6(1)(5) in conjunction with Article 8(6)(4) of the Act dated 13 October 1998 on Social Insurance System.

In its judgment dated 16 February 2024, case file II FSK 708/21, the Supreme Administrative Court stated that a company has the right to reduce the depreciation rate for previous years, considering the statute of limitations on tax liabilities, to any amount (even close to zero), for selected or all fixed assets to which the straight-line depreciation method has been applied. A company can modify depreciation rates starting from the first month of the given taxable year based on a decision made in the course of a taxable year.

On 19 February 2024, the OECD/G20 Inclusive Framework on BEPS released the report on Amount B of Pillar One, which provides a simplified and streamlined approach to the application of the arm's length principle to baseline marketing and distribution activities, with a particular focus on the needs of low-capacity countries. The report introduces two options for implementation for jurisdictions that opt into the simplified and streamlined approach from January 2025 and describes the circumstances under which a distributor is within scope of Amount B including cases where it also performs certain non-distribution activities, such as manufacturing. It also sets out the activities that may exclude a distributor from the scope of the simplified and streamlined approach, such as the distribution of commodities or digital goods.

In its judgment dated 22 February 2024, rendered in case C-674/22 (Gemeente Dinkelland), the CJEU ruled that EU law must be interpreted as not requiring the payment of interest to a taxable person as from the payment of an amount of VAT which is subsequently refunded by the tax authority, where that refund results, in part, from the finding that that taxable person, due to errors in its accounts, did not fully exercise its right to deduct input VAT for the years concerned and, in part, from an amendment, with retroactive effect, of the detailed rules for calculating the deductible VAT relating to the general costs of that taxable person where those rules are established under the sole responsibility of that taxable person.

On 20 February 2024, the European Council removed Bahamas, Belize, Seychelles and Turks and Caicos Islands from the list of non-cooperative jurisdictions for tax purposes. With these updates, the EU list consists of the following 12 jurisdictions:

  • American Samoa
  • Anguilla
  • Antigua and Barbuda
  • Fiji
  • Guam
  • Palau
  • Panama
  • Russia
  • Samoa
  • Trinidad and Tobago
  • US Virgin Islands
  • Vanuatu.

At a meeting of the parliamentary subcommittee, Deputy Health Minister said that analyses are carried out on changes to the calculation of the health contributions for entrepreneurs. Two options are considered. The first one relies on introducing a lump-sum monthly contribution and modifying the annual settlement so that the annual accounting basis corresponds to the selected tax parameters shown by entrepreneurs in their tax returns The second option provides the entrepreneur with the possibility to choose whether they want to pay lump-sum contributions put into progressive brackets, where eligibility for a particular bracket would be determined by the taxable income earned, or based on so-called clear tax income.

On 20 February 2024, the Supreme Administrative Court issued a judgment (case file III FSK 4252/21) in the case of a company that claimed an overpayment of property tax. The company’s argument was that its plant contained fully depreciated structures. During the period under dispute, the company established as the taxable base for these structures their initial value not reduced by depreciation write-downs, at the same time submitting a list of fully depreciated structures. The Supreme Administrative Court ruled that in the case of fully depreciated structures, the taxable base for real estate tax, according to Article 4(1)(3) of the Act on Local Taxes and Duties, is their value constituting the basis for calculating depreciation as of 1 January of the year in which the last depreciation write-down was made, not reduced by depreciation write-downs.

The Head of the National Revenue Administration announced that taxable persons used the Your e-PIT portal to file over 1 million tax returns. The most common were PIT-37 returns (919 thousand). PIT-28 (38.5 thousand), PIT-38 (18 thousand) and PIT-36 (21 thousand) returns has been filed online much less frequently.

Importantly, this year for the first time, pre-filled annual returns for entrepreneurs were made available on the e-Tax Office Portal. Many business owners, however, have complained that the returns only contain basic information, and the rest must be filled by them anyway. Pre-filled information only include information provided by remitters to entrepreneurs who in 2023 earned income in other ways, such as under employment relationship, commission or specific task contract, as well as information on the amount of advance payments (or lump-sum) for each month (quarter). The rest of information must be provided by entrepreneurs on their own. Importantly, even if the return is filled it should not be submitted if the entrepreneur wants to take advantage of the reliefs available. This is because the statement provided by the tax authority includes only the child tax credit copied from the previous return. Other credits or reliefs must be applied by the entrepreneur on their own. 

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