KPMG Weekly Tax Review 09 SEP - 16 SEP 2024
Bill simplifying and modifying VAT obligations for, inter alia, small businesses seated in EU passed by government.
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Welcome to the next issue of the “Weekly Tax Review” prepared in cooperation with tax experts in KPMG in Poland.
On 10 September 2024, the bill amending the Value-Added Tax Act and certain other acts was passed by the Council of Ministers. The bill simplifies administrative obligations for small businesses by introducing possibility to enjoy VAT exemption also in EU countries other than the country of their seat. Furthermore, the bill aligns Polish regulations with EU law by bringing new rules for determining the place of supply of services. Finally, the bill excludes the special margin procedure for works of art, collector's items, and antiques purchased at a reduced VAT rate. The new regulations are to enter into force on 01 January 2025.
A draft regulation of the Council of Minsters regarding the Polish Classification of Activities (Polska Klasyfikacja Działalności; PKD) was published on the Government Legislation Centre’s website. According to the draft regulation, new version of the Classification would become effective on 1 January 2025. The amended PKD is to cover new types of activities that have emerged in the economy over the recent years and ensure harmonization of economic statistics within EU in such domains as digital economy, circular economy, and green economy. Moreover, it brings greater precision in terms of description of existing branches of economy, to facilitate businesses selecting the right codes. The changes brought reflect amendments introduced to other product classifications, such as the EU classification of products by activity (CPA) and the Polish Classification of Products and Services (PKWiU). The changes made to PKD stem from amendments made to EU classifications adopted in 2022.
On 10 September 2024, a self-amendment to the bill amending the Personal Income Tax Act and certain other acts (the act on the cash PIT scheme) was submitted before the Sejm. The proposed amendment allows the Minister of Finance to issue a regulation exempting taxpayers from the requirement to submit part of their records (specifically, the JPK_ST_KR file) during the first year of the obligation's implementation, i.e., for the period commencing after 31 December 2024 and before 1 January 2026.
According to the judgment of the Supreme Administrative Court dated 11 September 2024 (case file I FSK 1414/21), since the structural features of a vehicle indicate that it can only be used for business activities, it should be assumed that the imposition of the taxpayer's obligation under Article 86a(10) of the VAT Act, i.e., to perform an additional technical examination, is intended to enable the taxpayer to demonstrate compliance with the requirements set forth in Article 86a(86a) thereof, and is not a condition for giving the taxpayer the right to fully deduct input tax on expenses related to the vehicle. Confirmation of a vehicle's design features that preclude its use for non-business purposes issued by a vehicle inspection station should be treated as a means of proof to demonstrate the required features of the vehicle, and not as a condition, failure to meet which deprives the taxpayer of the right to fully deduct VAT.
On 13 September 2024, the regulation of the Council of Ministers on the statutory minimum wage and the minimum hourly rate in 2025 was published in the Polish Journal of Laws. According to the regulation, the minimum wage is to increase to PLN 4,666, while the minimum hourly rate is to be set as PLN 30.50, which means several dozen zlotys more than the Labor Ministry's previous announcements, as the original version of the regulation set the minimum wage at PLN 4,626.
On 12 September 2024, the Ministry of Finance published a general ruling on depreciation of goodwill acquired by way of acceptance in lieu. Article 16b(2)(2)(a) of the CIT Act should be interpreted as stipulating that goodwill acquired through a sale transaction, where the object of buyer’s performance is always price expressed in money, can be subject to depreciation. Hence, given the fact that Article 16b(2)(2) of the CIT Act provides for a closed list of activities, as a result of which the acquired goodwill can be subject to depreciation, it is not allowed to extend the concept of purchase to other forms of acquisition, such as the acquisition of a business by way of acceptance in lieu. Such features are not borne, for example, by the act of repaying a loan (or part of it) through the transfer to the lender of an enterprise operated by the borrower. As a result of this interpretation of Article 16b(2)(2)(a) of the CIT Act, it should be stated that the goodwill given rise to by way of acceptance in lieu cannot be equated with goodwill created through purchase, as a result of which it cannot be depreciated under the provisions of the CIT Act.
https://www.gov.pl/web/finanse/interpretacja-ogolna-nr-dd5820352023-ministra-finansow-z-dnia-9-wrzesnia-2024-r-w-sprawie-amortyzacji-wartosci-firmy-nabytej-w-drodze-datio-in-solutum
According to the judgment of the Supreme Administrative Court dated 11 September 2024 (case file I FSK 1109/20), bearing in mind the conclusions of the CJEU judgment of 21 March 2024 in case C-606/22, it should be pointed out that, firstly, it is possible to correct the sales evidenced by receipts, in a situation where the supply of goods and services took place at an overstated VAT rate, even if no invoices were issued. Secondly, the tax authority may refuse a refund to a taxpayer who erroneously applied an overstated VAT rate by raising the charge of unjust enrichment of that taxpayer, but only if it demonstrates, after an economic analysis considering all relevant circumstances, that the financial burden of the improperly collected tax on that taxpayer has been fully neutralized. In a situation where a taxpayer has applied an overstated VAT rate, using the same price of goods as the taxpayer who applied the correct reduced rate, the economic burden of the tax is borne by the taxpayer who applied the overstated VAT rate. In contrast, no loss to consumers can be identified. In turn, the loss occurred on the part of the taxpayer, who received the same price as their competitor, but paid a higher output tax. Accordingly, it is the taxpayer who has suffered a loss consisting in reduction in the amount remaining with them after such sale.
