KPMG Weekly Tax Review 20 JAN - 27 JAN 2025
Amendments to excise duty
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Welcome to the next issue of the “Weekly Tax Review” prepared in cooperation with tax experts in KPMG in Poland.
During the sittings held on 22-24 January 2025, the Upper and the Lower House of the Polish Parliament examined a host of important acts and bills.
The Sejm passed, inter alia, the bill amending the VAT Act postponing changes to VAT rates and extending the application of the reverse charge mechanism, among others, to gas and power supplies. It also repeals the obligation to integrate cash registers with payment terminals. The bill now moves to the Upper House of the Polish Parliament. The amendments are expected to enter into force on 1 April 2025, except for reverse charge mechanism provisions, taking effect on 28 February 2025.
Druk nr 896 - Sejm Rzeczypospolitej Polskiej
In turn, the Upper House of the Polish Parliament passed unamended the Act amending the Act on Specific Solutions to Counteract Support for Aggression against Ukraine and to Protect National Security, the National Revenue Administration Act, and the Act on Counteracting Money Laundering and Terrorist Financing, seeking to ensure coherence of the Polish legislation with EU law, as well as comprehensive tightening up of the sanction mechanism towards Russia and Belarus with the aim of influencing Russia to reduce or cease hostilities on Ukrainian territory. The act now awaits the President’s signature and
The latest version of the bill amending the Labor Code, aimed at addressing undesirable behaviours in the workplace, was published on the Government Legislation Centre’s website. The proposed amendments consist in harmonizing the definition of harassment and sexual harassment, including their physical, verbal and non-verbal forms. The bill also brings new rules related to employees’ claims for any breach of equal treatment principles and instances of mobbing, including damages and compensatory damages. Moreover, the distribution of burden of proof principle will be changed so that the employee only has to substantiate, and not prove, the existence of infringement. Finally, the amending act simplifies the definition of mobbing, emphasizing its persistent nature and excluding incidental behaviour, as well as introducing a lower threshold for compensation and exempting the employer from liability under certain conditions.
According to the judgment delivered by the Supreme Administrative Court on 22 January 2025 in case II FSK 533/22, it follows from the provisions of Article 18d of the CIT Act that eligible costs include expenses accounted for directly or through depreciation write-offs related to the R&D activities themselves. These costs do not cover the reassessment of the results of such R&D activities, particularly when the company acknowledges uncertainty about whether the supplementary effects of the R&D, such as increasing the value of fixed assets, will be utilized in future R&D projects.
According to the judgment delivered by the Supreme Administrative Court on 17 January 2025 in case I FSK 1291/21, interpretation of the definition of good provided for by the VAT Act shall be carried out separately from the provisions of the Polish Civil Code. Within the frames of tax law, a part of a thing can also be considered a separate good, without the need for explicit separation. Components that cannot be treated as objects of separate property rights under the Civil Code can be, in fact, treated as goods under the VAT Act. When interpreting the provisions, it is of key importance to keep in mind the VAT neutrality principle, meaning that the interpretation should be in line with principles harmonized with Directive 112. Any interpretation relying on how a thing is treated under the Civil Code can be in breach with the principle of neutrality.
According to the judgment delivered by the Supreme Administrative Court on 16 January 2025 in case II FSK 510/22, funding by a company of that company’s Board Member’s MBA studies means creating revenue from free-of-charge performances for that Board Member under Article 11(1) of the PIT Act. As a result, the company has remitting obligations as prescribed by Article 41(1) of the PIT Act. The revenue point will be the moment the expense is incurred by the company instead of the Board Member. In turn, the actual moment of rendering the performance is the end of every MBA semester, since this is when the company covers the costs of each subsequent study period.
On 21 January 2025, the Council of Ministers passed a bill amending the Act on Excise Duty, the Public Health Act, and certain other acts. The bill provides for extending the excise duty regime to new product categories, i.e., nicotine pouches and other nicotine products, as well as covering them with the excise duty roadmap. Other amendments include extension of the definition of novel tobacco products, imposing excise duty on devices and sets of parts for vaping and increasing the levy on the liquids in single-use e-cigarettes. New regulations are to enter into force on 1 April 2025.
Projekt ustawy o zmianie ustawy o podatku akcyzowym oraz ustawy kodeks karny skarbowy
Immediately after his inauguration, President Donald Trump implemented a series of significant decisions impacting international taxation.
The executive order on the global tax deal directs the US Treasury Secretary and the US Ambassador to the OECD to notify the OECD that any commitments made by the prior administration regarding the Global Tax Deal have no force and effect in the US absent an act by the US Congress adopting the relevant provisions. In addition, the US President ordered to investigate whether any foreign countries are not in compliance with any US tax treaty or have any tax rules in place that are extraterritorial or disproportionately (discriminatingly) affect US companies.
Furthermore, pursuant to the “America First Trade Policy” executive order, new tariffs on EU, China, Mexico, and Canada may be imposed, as early as on 1 February 2025. To facilitate this, President Trump proposed the establishment of the External Revenue Service (ERS), aimed at collecting tariffs, duties, and other revenues related to foreign trade.
On 17 January 2025, it was announced that the Head of the National Revenue Administration refused to issue a clearance opinion dated 23 December 2024 (case file DKP3.8082.1.2024). The application related to a private limited company (spółka z o.o.) wanting to swap its loans granted by limited joint-stock partnerships for shares in increased share capital and next merge with these partnerships. As a result, the shares held by the limited joint-stock partnerships in the private limited company’s share capital would be redeemed. According to the Head of the National Revenue Administration, the goal of the activities performed would be to obtain tax benefits, such as no revenue from redemption of loans and no revenue for the private limited company and shareholders. As a result, it was stated that the above-mentioned activities are in breach with Article 12(1)(3)(a) of the CIT Act and the company’s modus operandi would be artificial, due to unfounded business splitting and the existence of self-cancelling or self-compensating elements. As a result, the Head of the National Revenue Administration denied a clearance opinion.
On 19 January 2025, the Ministry of Finance issued an announcement, according to which, regardless of the new definition of buildings and non-building structures referring directly to the Construction Law, applicable as of 1 January 2025, no changes to the taxation of fences will be made. The tax becomes due only when the fences are treated as non-building structures, i.e. are related to the business run. Furthermore, the Ministry explained that the fences around residential buildings remain untaxed also in situations where part of the building is allocated to running a business, such as an accounting firm, a dentist's office etc. Occupying a part of a residential building for business activity purposes does not deprive that building of its residential character.
On 22 January 2025, f the EU Packaging and Packaging Waste Regulation (PPWR) was published in the EU Official Journal. The regulation sets out product packaging rules to foster the transition to a circular economy. The key changes brought by the regulation include restrictions of use of single-use plastic packaging for less than 1,5 kg pre-packed fresh fruit and vegetables, single-use packaging for travel-sized cosmetics, hygiene and toiletry products sold and used in the accommodation sector, as well as single-use plastic packaging in the HORECA sector, containing individual portions or servings, used for condiments, preserves, sauces, coffee creamer, sugar and seasoning. Each Member State will be mandated to decrease the per capita generation of packaging waste, adhering to the guidelines outlined in the regulation for the upcoming years.
