KPMG Weekly Tax Review. Changes to method of calculating years of service

Between 24 and 26 June 2025, the Lower and Upper Houses of the Polish Parliament held sessions during which significant amendments affecting taxpayers were passed. Among other measures, the Senate passed without amendments the Act amending the VAT Act (raising the VAT exemption threshold from PLN 200,000 to PLN 240,000), as well as the Act amending the Act on the National Revenue Administration and the VAT Act (which, among other changes, allows for the submission of corrected returns either after or during a customs and fiscal audit). The Acts now move to the President. In turn, the Sejm passed, inter alia, the act amending the CIT Act and the PIT Act (removing the obligation to submit an annual report on the composition of partners in a general partnership, provided no changes have occurred) and the act amending the CIT Act (removing the obligation to publish a report on the executed tax strategy by the largest CIT payers). The Acts now move to the Upper House of the Polish Parliament. Furthermore, a new government bill aimed at introducing and streamlining the National e-Invoicing System (KSeF) was submitted to the Sejm.

Druk nr 1232 - Sejm Rzeczypospolitej Polskiej

Druk nr 1231 - Sejm Rzeczypospolitej Polskiej

Druk nr 1281 - Sejm Rzeczypospolitej Polskiej

Druk nr 1233 - Sejm Rzeczypospolitej Polskiej

Druk nr 1282 - Sejm Rzeczypospolitej Polskiej;

Rządowy projekt ustawy skierowany do Sejmu - Sejm Rzeczypospolitej Polskiej

On 25 June 2025, the Office of the Ombudsman published a formal inquiry, submitted on 6 June 2025 to the Minister of Finance, regarding the preferential taxation of detached garages serving residential purposes. The issue concerns the fact that owners of detached garages adjacent to residential buildings are required to pay property tax at a higher rate applicable to non-residential buildings, compared to owners of garages that are part of a residential building or those owning spaces in multi-bay garages within multi-family buildings, who benefit from the lower residential property tax rate. Meanwhile, the Constitutional Tribunal has deemed such regulations unconstitutional (judgment of 18 October 2023, ref. no. SK 23/19). According to citizens, the preferential property tax rate for residential buildings should also apply to detached garages that serve residential purposes.

Opodatkowanie garaży wolnostojących, gdy realizują funkcje mieszkalne. Wystąpienie do Ministerstwa Finansów

On 24 June 2025, the Council of Ministers passed a bill amending the Labor Code and certain other acts. The bill provides for, inter alia, changes in the method of calculating years of service to include, among others, periods of conducting non-agricultural business activity, as well as performing contracts of mandate or contracts for the provision of services. In addition, the bill provides that the entire period of service will be counted as a whole, regardless of working hours. It also introduces an obligation for employees to submit, within 24 months, documentation of any newly recognized periods of service to the employer who employs them at the time the legislation is applied. Furthermore, employees will be responsible for providing their employer with documents confirming either the payment of contributions or an exemption from the obligation to pay them. New provisions are expected to enter into force on 01 January 2026. Now the bill will move to the Sejm.

Projekt ustawy o zmianie ustawy - Kodeks pracy oraz niektórych innych ustaw

On 20 June 2025, the meeting of the Economic and Financial Affairs Council (ECOFIN) under the Polish presidency took place. During the meeting, several key issues were discussed, including the EU customs reform (the aim of the reform is to provide the EU with appropriate means to prevent the introduction of non-compliant goods into the EU, as well as to collect customs duties more effectively and conduct appropriate controls), competitiveness (energy prices and possible ways to reduce them), eurozone enlargement (the Council adopted a recommendation regarding Bulgaria's adoption of the euro), taxation (the Council approved the semi-annual report on tax matters and the Council conclusions on the progress of the Code of Conduct Group), and financial services.

Posiedzenie Rady do Spraw Gospodarczych i Finansowych

Pursuant to the judgments of the Voivodeship Administrative Court in Warsaw (ref no. III SA/Wa 875/25 dated 18 June 2025, ref. no. III SA/Wa 667/25 dated 24 June 2025, and ref. no. III SA/Wa 665/25 dated 25 June 2025), a Polish company, when paying both interest on a loan and dividends to an entity that is not the beneficial owner, has the right to apply the "look-through approach" and, as a result, determine the tax consequences, including its obligations as a remitter, in relation to the tax situation of the entity or entities that are the actual beneficial owners of the interest. Furthermore, the court found the company's position regarding the lack of obligation to verify the status of the beneficial owner of the dividend recipient, in cases where the dividend payment is not indicative of practices constituting fraud or abuse, incorrect. This is because, in the Court's opinion, the verification obligation arises from the general principles concerning income tax and has been confirmed in case law.

According to the judgment of the Supreme Administrative Court dated 24 June 2025 (case file I FSK 542/22), to treat a building as occupied in whole, it must be occupied in whole in line with Article 2(14) of the VAT Act. Occupying only a part of a building does not make it occupied in whole. Where the provision of Article 2(14) of the VAT Act refers to the handover of a building, non-building structure or parts thereof, it means that legal separation is not necessary to consider it as part of the building. The Court stressed that should legal separation take place, a separate building would emerge, meaning that the referred provision would be a dead letter. Additionally, the handover of a part of a building to make it subject to fit-out works should be treated as the handover for use. This is because Article 2(14) of the VAT Act does not provide for any supplementary conditions clarifying the notion of use.

According to the judgment of the Voivodeship Administrative Court in Krakow (case file I SA/Kr 330/25), a company acting as a remitter of dividend, using the Estonian CIT scheme, should apply the net profit distributed to the shareholders as the lump-sum tax basis. In the court's opinion, the position that, in the case of dividend distribution, the company acting as the remitter should use the amount of profit distributed to shareholders, after deducting the lump-sum tax payable by the company, as the basis for PIT taxation is incorrect. Such a stance would lead to an unjustified double reduction of tax liabilities under the PIT Act by the lump-sum tax due on the company's income.

According to the judgment of the CJEU in case C-645/23 dated 19 June, a tax additional to excise duty on a product, which constitutes only a fraction or a multiple of the excise duty to which that product is already subject, but the revenue from which is allocated to public authorities other than that to which the excise duty is allocated, and which does not follow the exemption rules applicable to that excise duty, may be regarded as a tax separate from that excise duty and thus fall within the concept of ‘other indirect taxes’ within the meaning of that provision, whereby that tax may be levied by the Member States in so far as it pursues a specific purpose, separate from excise duty. Furthermore, according to the CJEU, EU law requires that, where it is impossible or excessively difficult to obtain from the supplier reimbursement of the tax paid but not due, the final consumer must be able to direct his or her application for reimbursement to the Member State concerned directly.

According to the judgment of the CJEU in case C-785/23 dated 19 June 2025, EU law must be interpreted as precluding supplies of postal services provided, in accordance with separate contracts, by a holder of an individual license to provide the universal postal service from benefiting from the value added tax exemption, when such supplies, which are intended to meet the special needs of the persons concerned without being offered to all users, are provided under different, more favourable conditions than those approved by the national authority designated in the Member State concerned to regulate the universal postal service or those provided for in the standards relating to that service.

The Ministry of Family, Labor and Social Policy launched a call for applications to participate in the shorter working week pilot program. Applications can be submitted from 14 August to 15 September 2025 by employers (both private and public entities). The maximum support for a single pilot project is PLN 1 million, and the cost per employee cannot exceed PLN 20,000. By 15 October 2025, the selection process will be concluded, and the list of employers qualified for the pilot will be published. Following the publication of the list of pilot projects recommended for implementation, the contract signing phase will commence. The implementation of the pilot project begins on the date the contract is signed and is divided into three stages.

Skrócony czas pracy - to się dzieje! Pracodawco, dowiedz się więcej o pilotażu - Ministerstwo Rodziny, Pracy i Polityki Społecznej - Portal Gov.pl