KPMG Weekly Tax Review 23 SEP - 30 SEP 2024
Small businesses to be exempt from VAT in EU.
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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 27 September 2024, the Sejm passed the first reading of the bill amending the Value-Added Tax Act and certain other acts. According to the bill, small businesses are to enjoy a VAT exemption in other EU countries, once they meet a set of criteria, including being registered in the country of place of business, submitting quarterly report on turnover generated in every EU State, and providing confirmation that their sales did not exceed EUR 100 thousand in the preceding taxable year. Polish and foreign businesses seeking VAT exemption in Poland cannot exceed the threshold of EUR 200 thousand in sales, preceding taxable year included. Other amendments brought relate to taxation of online events, now to be taxed in the country of the seat of the service recipient. In principle, the bill seeks to implement EU directives into the Polish legal system.
Last week, the Sejm passed the first reading of the deputies’ bill aiming at limiting access of tax administration to taxpayers’ bank accounts. The bill aims at returning to the previous legal status in which information on bank accounts were only transferred in relation to suspects, to better protect banking secrecy and privacy of citizens. The Head of the National Revenue Administration, however, is opposed to such amendments. According to the authority, this tool is of incidental character and is used to counteract carousel frauds and tax evasions. Consequently, there is no need to change the existing law. The bill has been submitted before the Finance Committee.
On 24 September 2024, the Sejm passed the Act amending the Personal Income Tax Act and certain other acts, implementing a solution commonly referred to as the cash PIT scheme, applicable as of 2025. The scheme can be applied, on a voluntary basis, by entrepreneurs, with revenue that in the preceding taxable year did not exceed PLN 1 million and those only commencing their business activity. Importantly, to use it, taxpayers may not keep books of account to document their business activities and must submit to the head of the tax office a written statement on the choice of the cash PIT scheme by 20 February of the taxable year, or, in the case of taxpayers starting business activity during the taxable year, by the 20th day of the month following the month of the start of the activity.
Starting from 25 September 2024, companies employing at least 50 people as well as financial sector and anti-money laundering entities are expected to implement whistleblower protection procedures. The entry into force of the new whistleblowing regulations means that specific groups of legal entities must develop thoughtful solutions tailored to their situation. In particular, they need to create internal notification channels and conduct mandatory consultation of these solutions with trade unions or representatives of labor providers.
The bill on top-up taxation of members of multinational enterprise groups and large-scale domestic groups was submitted before the Sejm for the first reading. The bill implements into the Polish regulatory framework the provisions of Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union. It provides for transposing the OECD Global Anti-Base Erosion (GloBE) Model Rules or, in other words, the core principles of OECD’s Pillar II, into EU secondary law. Domestic regulations on the global top-up tax are expected to enter into force on 1 January 2025.
The Ministry of Finance announced that Poland has joined the Crypto-Asset Reporting Framework (CARF) joint statement, the new international standard on automatic exchange of information between tax authorities developed by the OECD The CARF Joint Statement is a bottom-up initiative by the countries of the Global Forum on Transparency and Exchange of Information for Tax Purposes. This means that Poland has joined 58 other countries that will introduce new rules for reporting crypto transactions. The countries declare that they will begin the international exchange of tax information obtained in this regard from 2027.
According to the judgment of the Supreme Administrative Court, delivered on 25 September 2024 in case I FSK 45/21, the concept of transferring the right to dispose of given goods, which is a condition for a supply to exist, should be understood broadly and with separation from civil law regulations. The fact that the landowners continue to hold the rights to the buildings built by the tenant does not preclude the possibility of assuming that such building will be supplied to them. The definition of a supply of goods for VAT purposes cannot be reduced to merely meeting the conditions set forth by the civil law. Hence, there is no doubt that in a situation where the owner intends to reimburse the outlays, which themselves make up the goods, it is necessary to consider this a supply of goods within the meaning of Article 7(1) of the VAT Act.
A new country-wide hotline of the National Revenue Administration was launched on 1 October 2024. As before, callers will get general tax and customs information without having to confirm their identity.
A new feature is that they can now access information on their individual cases covered by tax secrecy, after confirming their identity with the use of a telePIN code. Such information includes, inter alia, the status of settlement of their overpayments and refunds resulting from tax returns or statements. The rules for providing information by specialized tax offices serving large business entities, however, remain the same.
