KPMG Weekly Tax Review 17 JUN - 24 JUN 2024

On 17 June 2024, the bill amending the Act on the Agricultural Tax, the Act on the Local Taxes and Fees, the Act on the Forest Tax, and the Act on the Stamp Duty was published on the Government Legislation Centre’s website.

The bill seeks to enforce the judgment of the Polish Constitutional Tribunal which held the definition of “structure” provided for by the Act on the Local Taxes and Fees incompatible with the Polish Constitution.

The key amendments relate to the scope of the definitions of “building” [Polish: budynek] and “non-building structure” [Polish: budowla]. It is proposed to introduce an autonomous definition of “non-building structure”, excluding references to non-tax regulations, into the Act on Local Taxes and Fees as well as enumerate the categories of structures qualified as non-building structures in the form of a schedule thereto. 

On 1 July 2024, Hungary is scheduled to take over the rotating presidency of the EU Council. Its objective will be to "effectively advance the discussions on the taxation files and international issues currently on the agenda” and achieve “progress which responds to the needs posed by new business models, international cooperation, and fiscal revenues".

Moreover, the Presidency sets out the fight against tax evasion and ensuring legal certainty for taxpayers as high priorities.

On 19 June 2024, President of the Republic of Poland signed the Act on the protection of whistleblowers of 14 June 2024 into law. The aim of the Act is to regulate, inter alia, the conditions for providing protection to whistleblowers who report or publicly disclose information on breaches of law, measures for the protection of whistleblowers who report or publicly disclose information on breaches of law, principles for establishing internal procedures for reporting information on breaches of law and taking follow-up actions, principles for reporting information on breaches of law to a public authority, and principles for the public disclosure of information on breaches of law.

The act will be published in the Polish Journal of Laws no later than on 4 July 2024, and will come into force three months after the date of publication (with the exception of provisions concerning external reporting, which will come into force six months after the date of promulgation).

On 19 June 2024, the Council of the UE reached an agreement on a proposal to simplify certain reporting requirements in the field of financial services and investment support.

The proposal promotes a more efficient collection of data and avoiding double reporting with a direct benefit to European and national authorities and an indirect benefit for those financial sector entities having to provide information. The proposal also aims to reduce the frequency of reporting for InvestEU implementing partners to lower the administrative burden on them, and therefore indirectly on businesses and SMEs.

On 17 June 2024, a bill amending certain acts to support companies supplying shipping services was added the list of legislative rights and policies of the Council of Ministers.

The amendments are to extend application of the tonnage tax scheme to ships flying the flag of an EU or EEA member state other than Poland. The tonnage tax scheme can be extended not only to shipping companies, but also managers.

On 17 June 2024, the OECD/G20 Inclusive Framework on BEPS released supplementary elements relating to the report on Pillar One and Two of the international taxation reform.

They primarily relate to Amount B of Pillar One (including the definitions of qualifying jurisdictions within the meaning of section 5.2 and 5.3 of the Amount B guidance and the definition of covered jurisdictions within scope of the political commitment on Amount B) and Pillar Two, in terms of administrative guidance, CbCR Safe Harbour guidance, and qualified status.

According to the judgment of the Provincial Administrative Court in Gdańsk dated 19 June 2024 (case file I SA/Gd 219/24), short-term rental of residential premises lies within the scope of activities permissible under Article 5(1)(2) of the Act on Family Foundations. The notion of lease is not limited by the legislator only to long-term lease, which is why income drawn by a family foundation from this kind of activities is subject to exemption under Article 6(1)(25) of the CIT Act. In turn, according to the judgment of the Provincial Administrative Court in Poznań dated 18 June 2024 (case file I SA/Po 214/24), income from profits of a family foundation coming from lease of real estate of a civil law partnership is also subject to exemption under Article 6(1)(25) of the CIT Act.

In fact, there are too many differences between a civil law partnership and "commercial companies, investment funds, and cooperatives," which makes it impossible to consider it an entity "of a similar nature" to those mentioned. 

According to the judgment of the Provincial Administrative Court in Gdańsk (case file I SA/Gd 76/24), a company applying lump-sum taxation scheme to its income will have to provide a transfer pricing documentation in terms of transactions with its related entities for the previous taxable year.

According to the Judgment of the Supreme Administrative Court dated 13 June 2024 (case file I FSK 1448/20), the transfer of intangible assets by a general partnership to a partner in connection with its liquidation (dissolution) is subject to VAT. However, this transfer should not be documented with an invoice. As a result, the partner will not be able to reduce their output tax by the input tax on the service provided to them.