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

A new bill on whistleblower protection was published on the Government Legislation Centre’s website. The bill clarifies certain provisions brought by the previous versions of the act. According to the bill, for any acts of retaliation, the company will pay a whistleblower a minimum of 12 times the average monthly wage and compensation. An important change brought by the bill is that a whistleblower is now to enjoy protection from the moment of reporting or making a public disclosure. Moreover, the bill specifies that the deadline in which the whistleblower is to receive certification of the fact that they qualify for protection is one month and extends the scheme of free legal assistance to cover persons reporting breaches of law. Finally, the bill extends the vacatio legis to three months from the moment of promulgating the act and to six months for the provisions on internal reporting.

The governmental bill amending the Accounting Act has been submitted for the first reading before the Public Finance Committee. The goal thereof is to adjust Polish regulations to European requirements regarding large companies’ reporting. Multinationals will be covered by the obligation of public disclosure of income tax statements on a country-by-country basis. New provisions are to cover ultimate parent entities of groups and stand-alone entities with properly consolidated income and revenue, the value of which exceeds EUR 750 million in 2 consecutive years. Information provided in the statement 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 essential part of the new regulations is to enter into force 14 days after publication of the act in the Polish Journal of Laws.

The judgment of the Supreme Administrative Court dated 7 March 2024, case file II FSK 753/21, pertains to applying the R&D relief by a company rendering consulting services. According to the Court, activities that consist in transmitting the results of works being manifestations of creative activity may not be treated as development activities. Any activities outside the scope of R&D performed by the taxable person should be entered into in the records separately. When determining the "general working time," a ratio should be established, where the numerator should be the time actually spent on creative activities and the denominator should be the general working time, including breaks from work.

According to the judgment of CJEU rendered on 7 March 2023 in case C-341/22 (Feudi di San Gregorio Aziende Agricole SpA), Article 9(1) of the Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that it may not lead to a person being denied the status of taxable person for VAT purposes where that person, during a given tax period, carries out transactions that are subject to VAT and the economic value of which does not reach the threshold prescribed by national legislation, which corresponds to the return that can reasonably be expected from the assets held by that person.

Furthermore, Article 167 of the VAT Directive and the principles of VAT neutrality and of proportionality must be interpreted as precluding national legislation under which the taxable person is denied the right to deduct input VAT on account of the transactions subject to output VAT carried out by that taxable person being considered insufficient.

On 7 March 2024, CJEU Advocate General delivered opinion in case C-87/23, according to which:

  • the second subparagraph of Article 9(1) of the VAT Directive must be interpreted as requiring a comparison of the specific activity with that of a taxable person typical of the professional category in question. The comparable manner of the provision of training services gives rise to no doubts in the case at hand about the performance of an independent economic activity.
  • Article 2(1)(c) of the VAT Directive does not require the supplier to provide the service in person. He or she may also use an independent third party as a subcontractor who performs the service in or under his or her name. If there is a contract under which a service is purchased or sold in his or her own name but on behalf of a third party, Article 28 of the VAT Directive applies, which changes the subject matter of the supply by the commission agent and, in the case of sales commission, also the direction of that supply;
  • the subsidies that a fund pays to particular service providers for a specific service are, under Article 73 of the VAT Directive, included in the taxable amount as a payment by a third party which the supplier receives for that service.

On 4 March 2024, a notice of the Minister of Finance dated 28 February 2024 was announced. The notice relates to publishing the record of countries and territories entered on the EU list of non-cooperative jurisdictions for tax purposes, currently being adopted by the European Council, which have not been included in the list of countries and territories applying harmful tax competition issued on the basis of the Polish provisions on personal income tax and the provisions on corporate income tax, including the date of adoption of the record by the Council. The Schedule to the notice provides a list of tax havens which have not been included in the list of countries and territories applying harmful tax competition, issued based on PIT and CIT regulations. It includes Fiji, Guam, Republic of Palau, Republic of Trinidad and Tobago, Russian Federation and American Samoa.

A bill amending the PIT Act, which calls for introducing a cap on capital gains tax, or the so-called Belka’s tax, has been submitted before the Sejm. The bill provides for the introduction of a tax-free amount of PLN 100,000. New regulations are expected enter into force on 1 January 2025.

During the meeting of the Monetary Policy Council held on 5-6 March 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.

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