KPMG Weekly Tax Review 04 NOV - 12 NOV 2024
Final round of KSeF consultations.
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Welcome to the next issue of the “Weekly Tax Review” prepared in cooperation with tax experts in KPMG in Poland.
The European Commission published the latest version of the Combined Nomenclature (CN), applicable as from 1 January 2025. The Combined Nomenclature is the EU's eight-digit coding system, comprising the Harmonized System (HS) codes with further EU subdivisions. It serves the EU's common customs tariff and provides statistics for trade within the EU and between the EU and the rest of the world. The Combined Nomenclature was established by Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff. It is updated every year and is published as a Commission Implementing Regulation in the Official Journal of the European Union, L Series. The latest version is now available as Commission Implementing Regulation (EU) 2024/2522 in EU Official Journal L series of 31 October 2024.
Customs: Commission publishes the 2025 version of the Combined Nomenclature - European Commission
Draft regulations of the Minister of Finance, extending to 31 December 2025 the exemption from obligation to collect lump-sum corporate income tax under the pay&refund mechanism by intermediary remitters, in line with Article 26(2c) of the CIT Act, was published on the Government Legislation Centre’s website. Intermediary remitters mean entities maintaining securities accounts or omnibus accounts, through which issuers of securities make payments on these securities to non-resident taxpayers.
Under the pay&refund mechanism, effective from 1 January 2019, remitters are required to collect tax at the applicable rate (19% or 20%) on any excess over PLN 2 million, with no option to apply preferential taxation methods; However, since the regulation’s effective date, this obligation has been temporarily limited or waived for intermediary remitters. The most recent exemption from the pay&refund mechanism has been extended until 31 December 2024, with a new draft regulation proposing a further extension until the end of 2025. Similar changes are to be made to the personal income tax regime.
During the meeting of the Monetary Policy Council held on 5-6 November 2024, it was decided to keep the NBP interest rates unchanged, i.e. reference rate at: 5.75% annually, Lombard loan interest rate at: 6.25% annually, deposit rate at: 5.25% annually, rediscount rate at: 5.80% annually, discount rate on bills of exchange at: 5.85% annually. Keeping the reference rate at the same level affects other financial parameters, e.g. the amount of interest on tax arrears, which now amounts to 14.5% on an annual basis (200% of the base Lombard loan interest rate + 2%, except that the rate may not be lower than 8%), as well as the limit of notional interest deduction, and the possibility of reducing the amount of tax liability in the event of payment of VAT in full from a VAT account earlier than the deadline for paying the tax.
On 7 November 2024, the bill on top-up taxation of members of multinational enterprise groups and large-scale domestic groups was passed by the Upper House of the Polish Parliament with no amendments and now awaits the President’s signature. 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 (OJ L 328, 22.12.2022). 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. To achieve this goal, the bill is to introduce the minimum top-up tax, the domestic minimum top-up tax, and the tax on under-taxed profits. The act is expected to enter into force on 1 January 2025.
On 6 November 2024, the final round of public consultation to gather feedback on draft legal and business solutions making the use of the National e-Invoicing System (KSeF) mandatory was announced on the website of the Ministry of Finance. The key amendments proposed include making the KSeF solution mandatory for all taxpayers, starting from 1 February 2026 for businesses with sales exceeding PLN 200 million in 2025, and from 1 April 2026 for other taxpayers, as well as deferring certain requirements related to the scheme until 31 July 2026, including the requirement to provide a KSeF number when settling e-invoices, maintaining further KSeF deferral for invoices issued using cash registers, and penalties for non-compliance with KSeF obligations. Importantly, it is proposed to keep the possibility to issue offline invoices until the end of 2026 for all taxpayers and to issue consumer invoices in KSeF. Issues related to the logical structures of invoices were also raised, including modifications to the structure of the e-invoice, the marking of “JST” and improvements reported during the consultations.
On 4 November 2024, the Ministry of Finance released a test environment to verify the correctness of the process of preparing and sending DPI-IS(1) and DPI-FR(1) files. The release is due to the new registration and reporting obligations imposed on digital platform operators, resulting from the implementation of the DAC7 directive into Polish law. The Minister of Finance stressed that during the tests users should provide mock information, not containing any personal data. The test environment allows uploading files in XML format, compliant with the XSD Schemes published on the National Revenue Administration website under the tab: DPI structures for platform operators. It also allows to validate registration (DPI-FR(1)) and aggregate vendor information (DPI-IS(1)) forms submitted. The Ministry of Finance will check compliance of the files submitted with the XML schema and business validations.
Validity of signatures will also be checked. Due to the limitations of the test environment, POAs will not be verified. A detailed description of the environment can be found in the “JPK Service Interface Specification Version 4.3.1” which, along with the InitUploud file, is available on the Administration website in the “DPI structures for platform operators” tab.
https://www.gov.pl/web/kas/srodowisko-testowe-dla-operatorow-platform-cyfrowych
A new draft regulation of the Council of Minsters regarding the Polish Classification of Activities (Polska Klasyfikacja Działalności; PKD), dated 6 November 2024, was published on the Government Legislation Centre’s website. Compared to the previous version, the possibility of applying the PKD 2007 classification to activities designated according to this classification has been added. This applies to entities performing activities that, after the entry into force of the Regulation, applied to change the entry in the Central Register and Information on Economic Activity (CEIDG) - no longer than until the date of the change in CEIDG. The proposed Regulation introduces PKD 2025 classification, covering methodology principles, a list of individual classification items, and explanations to individual classification items describing their scope. An integral part of the PKD 2025 classification are the linking keys between PKD 2007 and PKD 2025 classifications. Transitional arrangements are also provided for extending the use of PKD 2007 codes to protect entrepreneurs from the risk of having to return the support they have received.
In the judgment dated 7 November 2024 in case C-594/23, the CJEU ruled on the definition of “building land”. Establishing this definition was necessary to determine whether the situation presented in the case is a supply of “building land,” because if it were building land and not real estate the transaction would not be subject to VAT. In the case at hand, the supply of the plots with foundations in place took place. The Court ruled that Article 12 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that a supply of land that, at the date of that supply, has only the foundations of residential housing structures in place, constitutes a supply of ‘building land’ within the meaning of that article.
According to the judgment of the Supreme Administrative Court dated 5 November 2024, case file 157/22, when regulating the issue of how income should be calculated for the purposes of the solidarity levy, the legislator referred to the entirety of Article 30c of the PIT Act, which provides for flat taxation of income. This Article, in turn, directly references, inter alia, Article 9(3) of the PIT Act regarding the possibilities of deducting losses. There are therefore no grounds for excluding the application of specific regulations related to the taxation of income with a flat tax.
