KPMG Weekly Tax Review 26 FEB - 04 MAR 2024

Assumptions of the bill introducing cash PIT were added to the list of legislative work and policies of the Council of Ministers.

According to the assumptions, the bill is to bring a possibility to opt for the cash method in accounting for costs and revenues (a solution referred to as “cash PIT”) for entrepreneurs pursuing business activity, provided that their revenue earned from such activity in the previous taxable year did not exceed PLN 500k. Those who adopt the cash PIT scheme are to pay the tax only when they are actually paid for the goods delivered or services performed and deduct the tax-deductible costs on the date of payment for goods received or services performed. After two years, counting from the date of issuing an invoice, making a receipt or entering into an agreement, a taxable person will be required to recognize revenue from business activity, even if they are not paid by their contractor for the goods delivered or services performed. This method of making settlements will apply only to B2B transactions. The bill is expected to be passed by the Council of Ministers in Q2 2024.

Assumptions of the bill on ensuring a global minimum level of taxation for members of national and multinational groups were added to the list of legislative work and policies of the Council of Ministers.

The bill implements into the Polish regulatory framework the provisions of Council Directive (EU) 2022/2523 of 14 December 2022. The goal thereof is to transpose the OECD Global Anti-Base Erosion (GloBE) Model Rules into EU secondary law or, in other words, establish the global minimum tax framework. In line with this solution, the largest multinationals will be expected to check each year to see if they are subject to minimum effective tax rate of 15%. If the effective tax rate for the entities belonging to a group in a particular jurisdiction is below the 15% minimum, the group must pay a top-up tax. The bill is expected to be passed by the Council of Ministers no earlier than in Q3 2024.

On 1 March 2024, a draft regulation of the Minister of Finance amending the regulation on reduced VAT rates was published. The purpose of the regulation is to reduce to 8% VAT rates on:

• Beauty treatment, pedicure, and manicure services
• Beauty treatment, pedicure, and manicure service rendered at home and
• other beauty treatment services.

The draft is currently being assessed. New provisions are expected to enter into force on 01 April 2024.

The Ministry of Finance announced that it does not envisage postponing the entry into force of JPK-KR (SAF-T for books of accounts) in its new form. It does, however, foresee introducing some changes, consisting in, inter alia:

• Introducing JPK-EŚT (for fixed assets):
  • Isolating the "Records under the new JPK-EŚT schema" element or making it optional in the first year the regulation applies;
  • Making disclosure of historical data for fixed assets not mandatory;
  • Making part of the new provisions not mandatory in the first year of application;
• Changes in the use of the Contractor's name most likely to apply to non-business individuals;
• Non-interference with taxpayers' chart of accounts and IFRS;
• Possibility to assign several tags in the ZOIS node to one account;
• changes to the income tax settlement:
  • Changes are planned in the naming of this node to avoid confusion. The classification of differences will be recorded at the document level, not the record level;
• Possibility to send files in quarterly or monthly cycles.

By its judgment dated 29 February 2024 in case C-314/22, the CJEU ruled that Article 90 of Council Directive 2006/112/EC on the common system of value added tax allows Member States to a time limit for filing a claim for VAT refund when the taxable base is reduced due to unpaid invoices. It is possible provided that that limitation period only begins to run from the date on which that taxable person was able to assert its right to a reduction. In the absence of national provisions concerning limitation period, the starting point for such a limitation period must be identifiable by the taxable person. Moreover, in the absence of specific national provisions, a requirement on the part of the tax authority which renders the reduction in the taxable amount of VAT, subject to the condition that that taxable person corrects the initial invoice beforehand, is precluded. Any right to a reduction in the taxable amount of VAT in the event of total or partial non-payment of an invoice issued by a taxable person gives a right to a refund of the VAT paid by that taxable person, together with interest for late payment, and that, in the absence of rules in the legislation of a Member State for applying any interest due, the date from which the taxable person asserts its right to that reduction in the VAT return relating to the ongoing tax period is the starting point for the calculation of that interest.

On 29 February 2024, the CJEU rendered judgment in case C-676/22 (B2 Energy s.r.o.). According to the Court, Article 138(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, must be interpreted as meaning that the exemption from value added tax of a supplier established in one Member State, having supplied goods to another Member State, must be refused where that supplier has not shown that the goods were supplied to a recipient having the status of a taxable person in that Member State and that, in the light of the factual circumstances and evidence provided by the supplier, the information necessary to verify that the recipient did not have that status 

The Ministry of Finance prepared CIT forms for 2023 filings. A pre-filled CIT-8 return rev. 33 was made available, along with CIT-8AB, CIT-8E, CIT-8FR, and CIT-D forms. The forms must be filed by 2 April 2024.

In its ruling dated 22 February 2024 (case file II FSK 710/21), the Supreme Administrative Court pronounced itself in the case of a taxpayer who acquired shares in a company form his wife. The taxpayer selected the same form of taxation as his wife, i.e., flat tax of 19%. When making bank transfers, he has indicated in the titles that they are made to cover “advance payment of PIT-36L tax”. Being convinced that the declaration on the choice of the form of taxation thus made is sufficient within the meaning of the PIT Act, he did not file any additional declarations. Doubts were raised as to whether this could be treated as a sufficient form of making statement on the choice of a form of taxation within the meaning of Article 9a(2) of the PIT Act.

According to the Supreme Administrative Court, a clear distinction should be made between an application and a declaration.

Article 9a(2) of the PIT Act refers only to declarations, so in principle, the role of the interpreting authority was to track whether the taxpayer duly declared his will. In this context, the question is not about the functions of the transfer as such, but what was included in its title. If we assume that the taxpayer states in this way that he pays flat-rate tax, then it should be considered that such a statement was made.