KPMG Weekly Tax Review 13 JAN - 20 JAN 2025
Bill adjusting Polish law to two CJEU judgments 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.
The Council of Ministers passed a bill amending the Polish tax Code and certain other acts. New regulations allow observing the deadline for filing a letter by sending it via any postal operator. In tax, administrative, and other procedures, a letter can be sent through any postal operator as defined by the Polish Postal Law. The list of operators can be accessed at the website of the Polish Office of Electronic Communications. Until now, to consider a deadline observed, the letter had to be posted at an office of the designated postal operator, that is, Poczta Polska (Polish Post). The proposed regulations also provide for charging interest on tax overpayment arising as a result of a ruling of the CJEU favourable to taxpayers for the period from the date the overpayment arose until the date it is reimbursed. The same rule would be applied to overpayment arising out of Constitutional Tribunal rulings.
The bill has been submitted before the Lower House of the Polish Parliament.
Rządowy projekt ustawy skierowany do Sejmu - Sejm Rzeczypospolitej Polskiej
Poland has gained EU's approval to continue applying a special measure derogating from Article 226 of Directive 2006/112/EC in order to maintain the split payment mechanism in VAT until 28 February 2028. The split payment mechanism applies to certain supplies of goods and the provision of certain services that are susceptible to fraud, with the invoice value exceeding PLN 15,000 gross. As part of it, suppliers and service providers must hold separate, blocked VAT accounts to which VAT amounts are transferred, while the net amount is paid to their regular accounts. The funds in the blocked account can only be used for specific purposes, such as paying VAT owed to the tax authority or VAT from invoices received from other suppliers or service providers. In cases where input VAT exceeds output VAT, the refund must be made within 60 days to the taxpayer's regular account.
On 20 January 2025, a bill amending the Labor Code was published on the Government Legislation Centre’s website. The bill provides for amendments in terms of phenomena undesirable in the workplace and brings a news definition of mobbing. According to the bill, it will be sufficient for the employee to substantiate, rather than prove, the occurrence of mobbing. The simplification of the definition of mobbing consists in recognizing that its essential feature is that it constitutes persistent harassment of an employee and that such actions can be physical, verbal and non-verbal. The characteristic features of mobbing are also indicated in the bill. In particular, incidental and one-off behaviours are excluded from the definition of this phenomenon and it is also recognized that the qualification of a given act as mobbing is independent of the intentionality of the perpetrator's action or the occurrence of a specific effect.
At the same time, the employer will not be liable for mobbing if the mobber was not the victim's superior.
On 14 January 2025, the Supreme Administrative Court delivered judgment in case II FSK 464/22, according to which the expense related to remuneration paid by a property developer under an agreement entered into by the entity buying the property from the property developer, pursuant to which the buyer, for remuneration, agrees to waive all the claims related to any possible defects and flaws of the building, shall not be treated as tax-deductible costs under Article 15(1) of the CIT Act, since that expense has not been incurred to gain revenue. In fact, the expense incurred has neither generated nor hypothetically led to any revenue, nor did it contribute to securing or preserving a source of revenue.
According to the judgment delivered by the Supreme Administrative Court on 10 January 2025 in case II FSK 463/22, expenses incurred by a company providing roadside assistance and claims adjustment services for securing replacement vehicles for their clients are subject to limitations when included as tax-deductible costs, in accordance with Article 16(1)(49a) of the CIT Act. The fact that the company will not directly use these vehicles is insufficient to contest the application of the aforementioned provision.
According to the judgment delivered by the Supreme Administrative Court in case II FSK 458/22, expenses incurred by a company for purchasing advisory services related to developing succession plans and potential inter-company transformation scenarios cannot be considered tax-deductible costs. Indeed, in the facts of the case, a relation between these expenses and the generation of revenue or the preservation or safeguarding of a source of revenue has not been demonstrated. The mere argument of preserving companies’ undertakings is not enough to prove that such a link exists.
During the meeting of the Monetary Policy Council held on 15-16 January 2025, 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.
OECD has released a host of new documents to streamline the administration of the global minimum tax. This includes the central record of legislation with transitional qualified status, administrative guidance on transition rules for deferred tax assets and liabilities, as well as updated GloBE Information Return and Multilateral Competent Authority Agreement to facilitate exchange of information outside EU. It should be noted that the fact that a jurisdiction is not on the above list does not mean that it will not acquire qualified status in the future. It only means that, as of the date of publication, the process necessary to obtain qualified status has not yet been started in that jurisdiction or has already been started but has not been completed. The document will be updated on a regular basis. On the other hand, as far as the administrative guidance is concerned, it should be borne in mind that it does not apply to the Polish reliefs and the assets intended for Special Economic Zones and Polish Investment Zones.
Global minimum tax: Release of compilation of qualified legislation and information filing and exchange tools
In reply to the Ombudsman's inquiry, the Ministry of Finance announced that it plans to make important amendments to the Polish Tax Code. The most significant changes include the replacement of the institution of non-barring of tax liabilities secured by a mortgage or tax lien with the institution of an interruption of the statute of limitations. Changes are also planned for Article 297(1)(4) of the Tax Code to allow the Ombudsman access to tax files, including those from financial institutions, as part of their official duties. The Ministry also works on a new solution which is to replace the condition of suspending the statute of limitations in fiscal crime proceedings. The project is aimed at ensuring that the future regulation not only responds to external demands, but also provides for the effective implementation of the tasks imposed on the National Revenue Administration. It is currently subject to internal consultations and expected to enter into force on 1 January 2026.
Co należy zmienić w Ordynacji podatkowej. Kolejna odpowiedź MF
On 17 January 2025, the Digital Operational Resilience Act (DORA) started to apply, bringing new requirements to the broadly perceived financial sector. The regulation is directly applicable, but the Polish legislator has yet to establish how to oversee the fulfilment of the obligations, a task planned to be managed by the Polish Financial Supervision Authority (FSA). Work on the draft Polish regulations is in progress, but the changes are not expected to take effect for several weeks. The new requirements include the r obligation to build digital operational resilience of the financial sector and ensuring security under supplier contracts. Under the latter, each institution is obliged to check what ICT processes, i.e. related to information technology, it transfers to external entities and then secure them. In turn, under the former, entities are required to maintain the continuity, reliability and quality of ICT-based services.
On 14 January 2025, CJEU Advocate-General delivered an opinion on Directive (EU) 2022/2041 of the European Parliament and of the Council of 19 October 2022 on adequate minimum wages in the European Union (OJ 2022 L 275, p. 33 of 25 October 2022), challenged by Denmark and Sweden.
According to the Advocate-General, the Directive should be annulled in full as it directly interferes with the wage-setting mechanisms of the Member States. Under the EU Treaty, it is not within the competence of the EU to decide on pay or the right of association of workers. Although opinions of Advocates-General are not biding, the CJEU often agrees with them.
Polish legislation implementing standards from the Directive is at an advanced stage, but the bill has not yet been referred to the Sejm. However, the bill may still be adopted even if the directive is annulled.
