KPMG Weekly Tax Review 03 FEB - 10 FEB 2025
Amendments to regulation on JPK_VAT file incorporating VAT return
Welcome to the next issue of the “Weekly Tax Review” prepared in cooperation with tax experts in KPMG in Poland.
On 4 February 2025, it was announced that the Head of the National Revenue Administration refused to issue a clearance opinion (case file DKP1.8082.7.2023) on the revenue of a family foundation from disposal of shares in a Polish private limited company (z o.o.) received as a gift. According to the Head of the National Revenue Administration, the above-described activities can bring a tax benefit in the form of postponing the emergence of tax liability until the disbursement of funds from the family foundation and reduction of the tax burden in the amount of the difference between 15% CIT on disbursements from the foundation and 19% PIT and 4% solidarity levy. It was also stressed that the immediate sale of shares by the foundation may suggest that it was used only for transactional purposes, which goes against the provisions of PIT and CIT Acts. Moreover, the Head of the National Revenue Administration pointed to the fact that the sale had been already planned before the shares were contributed to the foundation. As a result, a clearance opinion was denied.
According to the judgment delivered by the Supreme Administrative Court on 5 February 2025 in case I FSK 2452/21, a payment agreed upon by two related entities, due to failure to achieve the assumed level of profitability, shall not be treated as remuneration for a service consisting in acting in the role of a local distributor. Such a performance is not related to a specified service but aims at making transfer price adjustments to achieve the assumed level of profitability. The explanatory notes on transfer pricing issued by the Minister of Finance in 2021 clearly indicate that where a transfer price adjustment does not impact the amount of remuneration for transactions, deliveries of goods or services performed for related entities, but aims at adjusting the profitability to the market level, it remains outside the scope of VAT taxation. In fact, such a payment results from the failure to achieve profitability and not from acting as a distributor.
According to the judgment delivered on 30 January 2025 by the Supreme Administrative Court in case III FSK 1274/24, Article 2(2) of the Act on the Polish Tax Identification Number [NIP] must be interpreted in such a way that if an entity is subject to registration under Article 2(1) thereof, for any reason whatsoever, then Article 2(2) no longer applies. In other words, if an entity obtains a tax identification number on account of acting as a taxable person, and such a tax identification number has already been granted, there is no need for such an entity to obtain another number only because it acts as a remitter. Such an interpretation not only would go against logical reasoning, but also would contradict Article 5(1) of the Act.
On 6 February 2025, the CJEU delivered judgment in case C-677/22, replying to the following question referred by a Polish court: must Article 3(5) of Directive 2011/7 be interpreted as meaning that a period for payment longer than 60 calendar days may be expressly stipulated by undertakings only in contracts in which the contractual terms are not determined unilaterally by one of the contracting parties? According to the CJEU, the setting of a longer period for payment in contracts in which the contractual terms are determined unilaterally by one of the contracting parties is possible, but only when, having regard to all the contractual documents and terms contained in that contract, it may be established that the parties to that contract have expressed their concurrence of wills to be bound specifically by the term concerned. This follows from a literal interpretation of the provisions of the Directive and the Act transposing it into the Polish legal order.
A draft regulation of the Minister of Finance amending the regulation on the detailed scope of data provided via tax returns and VAT records was published. The draft regulation is to adjust the existing regulation’s provisions on JPK_VAT file incorporating VAT return to the amendments to Article 145e of the VAT Act. The amendment consists in prolonging, until 31 December 2026, the application of the VAT reverse charge mechanism to the supplies of gas in the gas system, electricity in the power system and services consisting in trading in greenhouse gas emission allowances. Consequently, the draft regulation extends the obligation to record such supplies and performances in VAT return and records until 31 December 2026.
The Commission presented the Competitiveness Compass, providing the framework for the Commission's work on competitiveness in this mandate. The document concentrates on closing the innovation gap, decarbonisation, increasing security, and reducing excessive dependencies. The key initiatives encompass investments in transmission grids through introducing Electrification Action Plan and European Grids Package, introducing new measures to increase demand for low-carbon products through the Circular Economy Act, and simplifying administrative procedures and regulations through the Decarbonisation Accelerator Act. In addition, revisions of state aid rules, investment in sustainable transport and the protection of EU waters are planned. Moreover, the plan highlights the importance of horizontal enablers, such as: simplification, lowering barriers to the Single Market, financing competitiveness, promoting skills and quality jobs as well as better coordination of policies at EU and national level.
An EU Compass to regain competitiveness and secure sustainable prosperity
During the meeting of the Monetary Policy Council held on 4-5 February 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.
On 4 February 2025, a report from the Economic Survey of Poland prepared by OECD was presented at the Ministry of Development and Technology. According to the report, the Polish economy has doubled in size over the past two decades as it grew at twice the OECD average. Real GDP is projected to expand by 3.4% in 2025 and 3% in 2026, fuelled by falling inflation and improving external demand. Interest rates should gradually ease as wage growth slows and inflationary pressures recede durably. In addition to discussing macroeconomic indicators, the OECD also identified potential directions for further action, focusing on healthcare, among others. Changes should seek to reduce patient costs and support long-term care. Increasing productivity, innovation and improving the skills of the workforce will be key to further economic growth. The OECD also recommends action related to transport, housing and emission reductions in the energy sectors, as well as tax reforms.
