KPMG Weekly Tax Review 03 JUN - 10 JUN 2024

Last week, President signed three acts directly impacting the tax law, namely:

a)      the Act of 9 May 2024, amending the act amending the Value-Added Tax Act and certain other acts, relating to the postponement of the mandatory use of the National e-Invoicing System (KSeF) from 1 July 2024 to 1 February 2026

b)     the Act of 9 May 2024 amending the National Revenue Administration Act and certain other acts, which is to ensure coherence of the Polish regulations with EU law laying down supply chain due diligence obligations for Union importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas, as well as controls on cash entering or leaving the Union, and

c)      the Act amending the Act on the Social Insurance System and certain other acts. The Act grants certain entrepreneurs the right to take a vacation from paying social security contributions for one month a year.

During the meeting of the Monetary Policy Council held on 4 - 9 June 2024, it was decided to keep the NBP interest rates unchanged. Consequently, interest on tax arrears continues to amount to 14.5% on an annual basis.

On 3 June 2024, the European Commission published a communication on the total number of allowances in circulation (TNAC) in 2023 and those that will be placed in 2024 for the purposes of the Market Stability Reserve (MSR) under the EU Emissions Trading System established by Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community (Greenhouse Gas Emission Allowance Directive (ETS) (2003/87)). The communication details the underlying calculation and the number of allowances that will be placed in the reserve from 1 September 2024 to 31 August 2025. It also indicates the number of allowances in the reserve that were invalidated on 1 January 2024.Moreover, the Communication highlights significant changes in the operation of the MSR that were introduced under the ‘Fit for 55’ legislative package.

A draft regulation of the Minister of Finance dated amending the regulation on the detailed scope of data provided via tax returns and VAT records was published on the Government Legislation Centre’s website.

The draft proposes to align the effective dates of amendments to JPK_VAT with return adjusting the form of the file to the mandatory KSeF, i.e.:

1. postponing the date of mandatory inclusion of the KSeF invoice number in sales/purchase listing – voluntary from 1 February 2026 and mandatory from 1 August 2026 for sales listing
2. postponing the inclusion of data from receipts considered simplified invoices in JPK_VAT with return until the end of July 2026
3. changing the date of entry int force of the amending regulation from 1 July 2024 to 1 February 2026.

According to the judgment of the Supreme Administrative Court dated 5 June 2024 (case file I FSK 1501/20), only grants and incentives that directly impact the price can be charged into the VAT taxable base. In turn, grants and incentives (donations) that a foundation contributes to carry out a joint venture (project) are treated as cost-based, i.e., they cover the costs of operation and implementation of the programs and are not price-generating in nature. Consequently, they do not impact the taxable base within the meaning of Article 29a of the VAT Act. 

According to the judgment of the Supreme Administrative Court dated 5 June 2024 (case file III SA/Wa 853/24), due to the fact that on 1 February 2020, Great Britain left EU and that 31 December 2020 was the last day of the so-called transitional period, the tax authority was right to state that the old-age pension benefits received by the taxpayer under a British occupational pension scheme since 1 January 2021 shall not enjoy subjective exemption under Article 21(1)(58)(b) of the PIT Act in conjunction with section 33 thereof. Consequently, the revenue generated should be shown by the taxpayer in PIT-36 tax returns for 2021, 2022, 2023 and subsequent years. 

On 6 June 2024, CJEU Advocate General A.M. Collins delivered an opinion, according to which Articles 187 and 189 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as precluding legislation according to which an extended adjustment period within which input VAT payable or paid with respect to ‘immovable property acquired as capital goods’ may be adjusted applies to supplies of services connected to immovable property, such as works carried out for the renovation or conversion of a building.

According to the judgment of the Supreme Administrative Court dated 4 June 2024 (case file II FSK 1298/21), in the case of credit financing of fees associated with the conclusion of loan contracts, consisting in deducting them from the amount of the loan granted at the time of disbursement of funds to the borrower's account (credit financing of loan costs), when the total amount of the loan and the credited loan costs are divided into monthly instalments and repaid according to the repayment schedule - we are not dealing with a service settled in accounting periods covered by the disposition of Article 12(3c) of the CIT Act. The correct position is that the borrower's use of an additional option will result in the company being required to recognize revenue from the commission in full, regardless of the fact that this commission will be paid in instalments according to the loan repayment schedule.

According to the judgment of the Supreme Administrative Court dated 4 June 2024 (case file III FSK 1190/22), the taxable base for real estate tax on a structure is its fully depreciated initial value, set at the moment of entering that structure to the record of fixed and intangible assets by the company, not reduced by depreciation write-downs.