KPMG Weekly Tax Review 28 OCT - 04 NOV 2024
Preliminary paper on bill amending KSeF.
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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 30 October 2024, the act amending the Personal Income Tax Act and certain other acts was published in the Polish Journal of Laws. The act brings a possibility to apply the cash method, commonly referred to as cash PIT, in accounting for revenues and tax-deductible costs. The solution can be used by sole traders with revenue from business activity not exceeding the amount equivalent to EUR 1 million in the preceding taxable year, as well as by entrepreneurs starting their businesses. The cash PIT scheme can be opted for by submitting a relevant statement to the head of a tax office. The new regulations enter into force on 01 January 2025.
On 28 October 2024, the European Commission adopted a proposal to amend Directive 2011/16/EU on administrative cooperation in the field of taxation (DAC). The goal of the DAC9 proposal is to make it easier for companies to fulfil their filing obligations under the Pillar II Directive, which aims to ensure a global minimum level of taxation for multinational enterprise groups. Under DAC9, multinational enterprise groups only have to file one top-up tax information return, at central level, for the entire group, which will significantly simplify the filing process and reduce the administrative burden. Once adopted by the EU Council, EU governments will have time until 31 December 2025 to put DAC9 into practice. Multinational enterprise groups are expected to file their first top-up tax information return by 30 June 2026. The relevant tax authorities must exchange this information with each other by 31 December 2026 at the latest. The goal of the amendments is to simplify reporting requirements and increase tax transparency within the EU.
Administrative cooperation in taxation - European Commission
On 28 October 2024, a draft regulation amending the list of construction materials, devices and services used in thermal modernization projects was published. The draft regulation provides for extending the list with “electricity storage facilities and equipment” and services consisting in “installing electricity storage facilities”. In addition, under the draft regulation, the thermal modernization relief is to get extended to micro wind power plants. Importantly, the draft regulation provides for the possibility to apply the relief to the purchase and assembly of oil and gas boilers, as well as clarifying the regulations on, inter alia, heat pumps, thermal insulation of roofs, purchase of exterior doors, energy management systems, and heating network connection. Finally, the term "equipment" was revised to "infrastructure necessary for operation" to align the regulations with the Renewable Energy Sources Act. The goal of the new provisions is to simplify and harmonize the rules for applying the thermal modernization relief, as well as to dispel any doubts as to interpretation thereof.
https://legislacja.rcl.gov.pl/projekt/12390957/katalog/13090924
A preliminary paper on bill amending the Act postponing the mandatory use of the National e-Invoicing System (KSeF) was published last week. New regulations provide for gradual introduction of the mandatory use of KSeF, i.e., starting from 1 February 2026 for businesses with turnover exceeding PLN 200 million in 2025 and starting from 1 April 2026 for other taxpayers. Additionally, certain requirements related to the scheme will be deferred until 31 July 2026, including the requirement to provide a KSeF number when settling e-invoices and penalties for non-compliance with KSeF obligations. Furthermore, it will be possible to use the system in offline mode until the end of 2026 or to use it to issue consumer invoices. Importantly, "digitally excluded" taxable persons may issue invoices in the current form until 30 September 2026. The bill also provides for clarifying provisions on the use of data coming from KSeF by National Revenue Administration bodies.
On 25 October 2024, it was announced that the Head of the National Revenue Administration issued a clearance opinion (case file DKP16.8082.10.2024) on a cross-border downstream merger. The opinion related to a share swapping transaction and transfer of the acquired company’s assets to the acquiring company, in line with the provisions of the Polish Code of Commercial Companies and Partnerships. According to the Head of the National Revenue Administration, the transaction is to bring tax benefits to the acquiring company and its shareholder. The acquiring company, however, will not derive income from the surplus of the market value over the issue value of shares, nor will the shareholder be required to tax the issue value. Moreover, the revenue will not be taxed in Poland, in line with the double taxation treaty in force. According to the Head of the National Revenue Administration, the primary purpose of the transaction is not to gain a tax benefit, but to simplify the organizational structure, and to achieve consolidation of companies and savings. The economic justification was sound and supported by economic arguments; therefore, Article 119a(1) of the Polish Tax Code does not apply. As a result, the Head of the National Revenue Administration issued a clearance opinion under 119y(1) thereof.
https://eureka.mf.gov.pl/informacje/podglad/606766
On 28 October 2024, the Supreme Administrative Court passed a resolution in case FPS 2/24, according to which, in line with the laws in force in Poland as from 1 March 2017, the head of a tax office is an authority competent for granting order of immediate enforceability of a decision issued by the head of a customs and tax office. The key issue was how to interpret Article 239b § 3 of the Polish Tax Law in order to determine which tax authority is competent to grant the order of immediate enforceability. According to the Court, pursuant to Article 13(1)(1) of the Polish Tax Code, tax authorities mean, among others, the head of a tax office and the head of a customs and tax office. It stressed that the order of immediate enforceability is one of the constituents of the broadly perceived tax collection system, which points to the authority of the head of a tax office in this regard. In fact, granting the order of immediate enforceability is directly related to the enforcement of monetary claims. The goal of the resolution is to clarify and harmonize practices in terms of competence of tax authorities.
On 28 October 2024, the Supreme Administrative Court passed a resolution in which it stated that the rule, according to which in the case of any divergence of interpretation of the treaty, the English text shall prevail, stipulated by Article 30 of the Convention between the Republic of Poland and the Government of the Kingdom of Sweden for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, means that Polish Taxpayers are expected to act in line with Article 11(1)(2) of the English version of that Convention, regardless of the fact that the error in this provision in the Polish version has been corrected by the notice of the Minister of Foreign Affairs dated 20 November 2017.
According to the judgment of the Supreme Administrative Court in case I FSK 352/21, dated 29 October 2024, the CJEU’s judgment in case C-691/17 clearly indicates that tax authorities are not required to ascertain whether the issuers of invoices are able to correct those invoices nor to order such correction before rejecting the claim for deduction of VAT. According to the CJEU’s judgment, even in the absence of any suspicion of tax evasion, the authority may refuse an undertaking the right to deduct the VAT which that undertaking unduly paid to the supplier of services, where the relevant transaction fell under the reverse charge mechanism. However, the enterprise must be able to address its application for reimbursement to the tax authorities directly, especially where the reimbursement by the supplier would be impossible or excessively difficult, in particular in the case of the insolvency of the supplier. As a result, the tax authorities must consider whether there is a way for the taxpayer to recover the unduly paid tax, even if the supplier has not issued a correction invoice.
According to the judgment rendered on 29 October 2024 by the Supreme Administrative Court in case II FSK 1090/21, employer's payment of insurance premiums for the investment part generates income of the employee from the employment relationship at the time of payment, according to Article 12(1) of the PIT Act. The employer, as acting as the remitter, is required to calculate, collect and remit advance income tax on the premiums paid. Funds paid out of the investment part of the policy do not give rise to revenue, unless the insured received income from the policy, as referred to in Article 24(15 and 15a) of the PIT Act. In such a case, income from the insurance premiums invested is subject to 19% lump-sum income tax under Article 30a(1)(5) of the PIT Act. The employer has no obligation to collect this tax.
