KPMG Weekly Tax Review 24 FEB - 03 MAR 2025
First Omnibus package released.
-
Share
-
-
1000
Welcome to the next issue of the “Weekly Tax Review” prepared in cooperation with tax experts in KPMG in Poland.
On 26 February 2025, the European Commission released the first Omnibus, i.e., a new package of proposals to amend some key pillars of the European sustainable development. The goal of the package is to reduce reporting burdens for EU businesses (by at least 25% for large entities and by as much as 35% for small and medium-sized businesses). The simplifications relate to, inter alia, the Corporate Sustainability Reporting Directive (CSRD) and have been included in two legislative proposals. The first one proposes to postpone by two years the reporting requirements for entities currently in scope of the CSRD required to submit reports for 2025 or 2026 (i.e., waves 2 and 3 entities).
The application of the reverse charge on VAT on gas and energy supplies, as well as on services consisting in public trading in greenhouse gas emission allowances has been extended to 31 December 2026. Introduced on 1 April 2023, the mechanism was initially set to apply until 28 February 2025. The reverse charge mechanism provides that the tax is charged on purchasers or recipients in respect of the supply of gas in the gas system, the supply of electricity in the electricity system and the provision of services in respect of the transfer of greenhouse gas emission allowances, where these are made directly or through an authorized entity on a commodity exchange within the meaning of the provisions on commodity exchanges or a regulated market or an organized trading facility (OTF) within the meaning of the Act on Trading in Financial Instruments.
On 28 February and 3 March 2025, it was announced that the Head of the National Revenue Administration denied clearance opinions on establishing incentive plans (DKP16.8082.7.2024 and DKP16.8082.4.2024, respectively).
In both instances, the Head of NRA stated that the presented activities have no economic justification (are artificial in nature) and aim solely at achieving a tax benefit in the form of reduced PIT, CIT, and VAT liabilities, which goes against the purpose of tax regulation, and not actually delivering incentives to employees. As a result, clearance opinions have been denied.
According to the authority, the proposed incentive plans are akin to the payment of a variable pay component, and the real aim of the applicants was to ring-fence this part of remuneration and tax it at a lower rate.
The Head of the National Revenue Administration also noted that the restrictions stipulated in the rules of the examined incentive programs exclude the possibility for program participants to dispose of the shares they have acquired themselves, just as the possibility to transfer the right to remuneration to another person is restricted. Thus, according to the authority, there is no actual investment risk for the participants in the situations analysed.
According to the judgment of the CJEU delivered on 27 February 2025 in case C-277/24, Article 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, read in conjunction with Article 325(1) TFEU, the rights of the defence and the principle of proportionality,
must be interpreted as not precluding national legislation and practice under which a third party who may be held jointly and severally liable for the tax debt of a legal person cannot be a party to the proceedings brought against that legal person to establish the tax debt of that legal person, without prejudice to the need for that third party, during any joint and several liability proceedings brought against that third party, to be able effectively to call into question the findings of fact and the legal classifications made by the tax authority in the context of the first set of proceedings, and to have access to the file of the tax authority, in accordance with the rights of that person or of other third parties.
According to the judgment of the CJEU delivered on 27 February 2025 in case C-18/23, Article 63(1) TFEU (Treaty on the Functioning of the European Union) must be interpreted as precluding legislation of a Member State which provides that only a collective investment undertaking managed by an external entity which carries on its business on the basis of an authorization issued by the competent financial market supervisory authorities of the State in which that entity has its registered office, may benefit from the exemption from corporation tax in respect of income derived from investments made by that undertaking, and which therefore does not grant such an exemption to internally managed collective investment undertakings constituted in accordance with the legislation of another Member State, where the law of the first Member State authorises only the creation of externally managed collective investment undertakings.
On 24 February 2025, the OECD published the Consolidated Report on Amount B, as part of Pillar I of the Inclusive Framework on Base Erosion and Profit Shifting (BEPS).
This consolidated report incorporates the agreed materials on Amount B that have been released by the Inclusive Framework since February 2024 up until December 2024, with special regard to the application of the arm’s length principle to in-country baseline marketing and distribution activities.
According to the judgment of the Supreme Administrative Court dated 26 February 2026 (case file II FSK 711/22), there exists a tight connection between the expenses incurred to prepare videos uploaded to YouTube and advertising revenue. The attractiveness of the videos posted translates into the number of views and thus attracts advertisers. Thus, this connection is undeniable and close. This means that expenses incurred for the production of such a video, such as cameras, laptops, costs of software used for editing and production, costs of accommodation in hotels within the EU and in other places in the world where the filming takes place or costs of travel services organized by travel agencies may, in principle, constitute tax-deductible costs under Article 22(1) of the PIT Act.
