KPMG Weekly Tax Review 02 DEC - 09 DEC 2024
Works on CSRD implementing Act finalized.
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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 6 December 2024, after examining the amendments proposed by the Upper House, the Lower House of the Polish Parliament finalized work on the Act amending the Accounting Act, the Act on Statutory Auditors, Audit Companies, and Public Supervision, and certain other acts. The Act now awaits the President's signature. The Act implements the Corporate Sustainability Reporting Directive into the Polish law. The goal of the amendments to the Accounting Act is to oblige large entities and groups, as well as small and medium-sized issuers of shares admitted to trading on a regulated market, to publish information necessary to understand the environmental, social, and corporate governance (ESG) impacts of their operations.
Importantly, following the EU Delegated Directive, the Act raises the size threshold for micro, small, medium and large enterprises. This means that more entities will be able to enjoy simplified accounting procedures.
Zakończenie prac Sejmu nad ustawą wdrażającą CSRD - Ministerstwo Finansów - Portal Gov.pl
The Ministry of Finance announced that the Head of the National Revenue Administration has entered into a compliance co-operation agreement with SOLARIS BUS & COACH sp. z o.o. This marks the 14th agreement of its kind to be signed. The Co-operative Compliance Program promotes responsible tax-related policy and partnership with the tax administration, offering modern approach to customers and full support. Intended for entities with revenue exceeding EUR 50 million, the Program relies on trust and transparency, ensuring the correct settlement of tax liabilities and reducing the need for audits. Services rendered by the National Revenue Administration are tailored to each taxpayer’s individual needs. Under the Program, the level of supervision and monitoring of the taxpayers is aligned with the internal oversight measures they have implemented, including the management of tax-related issues.
The taxpayer essentially conducts a self-audit of their accounts, while the tax administration oversees the taxpayer's internal control mechanisms. This model is also employed in many other countries.
For years, tax authorities have insisted that the costs of a team-building event can be recognized as tax-deductible only if the participants are employees or members of the company’s management board. They have argued that expenses related to associates, such as those working under B2B or civil law contracts, are considered representation costs and are therefore not deductible, due to the business relationship with such individuals.
However, there has been a recent change concerning meals provided. The head of the National Revenue Administration stated that expenses for purchasing food products can be deducted when used by both employees and associates. This does not change, however, the authority’s stance on team-building meetings. In subsequent rulings, the Head of the National Revenue Administration continues to deny the deduction of expenses for associates in this context. Regardless of the recipient's status, expenses for alcohol cannot be considered deductible.
For more details, see our blog (in Polish): Prezent od pracodawcy czy rózga od fiskusa? - KPMG Poland
From 10 December 2024, entrepreneurs affected by the floods that hit regions of south-western Poland can apply for aid. At the initial stage, PLN 100 million will be disbursed to businesses under a designated fund established by the Ministry of Development Funds and Regional Policy in cooperation with Bank Gospodarstwa Krajowego. The aid will be available as preferential, long-term financing, with repayment period of up to 10 years and a 12-month grace period. A redemption of up to 90% is possible, provided that the de minimis threshold is available. The maximum aid amounts to PLN 5 million, subject to individual assessment. Applications can be submitted to BGK Financing Partners, the list of whom is available online.
Pomoc dla powodzian. Nabór wniosków dla przedsiębiorców - Ministerstwo Funduszy i Polityki Regionalnej - Portal Gov.pl
During the meeting of the Monetary Policy Council held on 3-4 December 2024, it was decided to keep the NBP interest rates unchanged. This means that the reference rate continues to amount to 5.75% annually. The reference rate has influence on other financial parameters, e.g. the amount of interest on tax arrears (200% of the basic lombard loan interest rate + 2%, except that the rate may not be lower than 8%), which continues to amount to 14.5% on an annual basis. It also affects the limit of notional interest deduction and a reduction in the amount of tax liability in the event of payment of VAT in full from the VAT account earlier than the deadline for paying the tax.
On 3 December 2024, the Council of the EU reached a provisional agreement with the European Parliament on a proposed targeted amendment of the EU deforestation regulation, postponing its date of application by 12 months, until 30 December 2025. Aimed at protecting the natural environment, the EU deforestation regulation covers products made from wood, rubber, coffee, soy and some of their derived products. Entities marketing and further distributing such products will be required to collect information on impacts on deforestation, assess risks and make due diligence statements. Violations of the provisions will be subject to severe sanctions. The provisional agreement must be still formally adopted by both institutions and will be published in the Official Journal of the EU, so that it can enter into force before 30 December 2024. In addition, the Ministry of Climate and Environment is working on a bill implementing the EU legislation into the Polish regulatory framework.
Prace nad wdrożeniem rozporządzenia EUDR - Ministerstwo Klimatu i Środowiska - Portal Gov.pl
On 2 December 2024, a panel of seven Supreme Administrative Court judges passed a resolution in case III FPS 4/24. The resolution relates to the point in time from which the limitation period should continue to run after a suspension in connection with the service of a security order under the provisions of the Act on Enforcement Proceedings. The Supreme Administrative Court has found that the suspension of the limitation period, triggered by the service of a security order, concludes with the completion of the proceedings to secure claims as per the provisions of the Act on Enforcement Proceedings (Article 70(7)(5) thereof), rather than upon the expiration of the security order. An interpretation of the provisions suggests that the expiration of the security order does not influence the course of the proceedings to secure claims. The purpose of the security is to safeguard the creditor's fiscal interests, and the conclusion of the proceedings to secure claims is essential for the limitation period to resume. The resolution by the Supreme Administrative Court underscores the importance of protecting the creditor's interests and ensuring the effectiveness of the proceedings to secure claims.
On 5 December 2024, the CJEU rendered judgment in case C-680/23, according to which, the first paragraph of Article 183 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as not precluding national legislation which provides that, where a taxable person ceases economic activity, that person may not carry excess value added tax, declared at the time of that cessation of activity, forward to a following period and may recover that amount only by requesting a refund within 12 months from the date on which that activity ceased, provided that the principles of equivalence and effectiveness are observed.
