Poland: Reporting by real estate companies; interest on tax overpayments by foreign investment funds

The KPMG member firm in Poland has prepared reports about the following tax developments (read more at the hyperlinks provided below).

• Deadline for submitting information on real estate companies extended: The Minister of Finance’s decree (dated 29 March 2022) on extending the deadline for providing information on real estate companies was published. Pursuant to the decree, the deadline for submitting information by real estate companies, individual income taxpayers and corporate income taxpayers, on holding rights in real estate companies with a tax or financial year ending in the period from 31 December 2021 to 31 May 2022, has been extended to 30 September 2022.
• First co-operative compliance agreement signed: The head of the tax administration signed on 29 March 2022 the first co-operative compliance agreement. The co-operative compliance program, which commenced 1 July 2020, is a form of a close and ongoing cooperation between the taxpayer and the head of the tax administration. The program is intended to provide the correct settlement of tax liabilities in the current declarations submitted by the taxpayer, simultaneously limiting inspections performed by tax authorities, for business entities with revenue of above €50 million. Taxpayers enrolling in the program may enter into agreements on the interpretation and application of tax law, compliance with appropriate terms in transactions with related entities, or the amount of income tax advance payments required. Furthermore, participating entities may take advantage of interest relief.
• Interest on and payments of contractual penalties in individual (personal) income tax: The Supreme Administrative Court held that interest on and payments made under contractual penalties for non-performance of an obligation under a mutual agreement, constitute income from other sources, and are subject to taxation on general principles according to the tax scale. Such payments are excluded from income tax exemption.
• CJEU to rule on the third-country funds’ right to interest on overpaid tax: The Polish Supreme Administrative Court requested the CJEU give a preliminary ruling on whether Article 78(5)(1) and (2) of the Polish tax law (considerably limiting the right to interest on a tax overpayment) is in line with the EU law. The case relates to the right to interest on overpaid tax exercised by third-country investment funds when the national regulations were not amended after they had been found non-compliant with the EU law. In the case at hand, a U.S.-based foreign investment fund claims interest on overpaid withholding tax. The overpayment in question was based on the CJEU’s landmark judgment (Emerging Markets Series, "the EMS judgment" (C-190/12 dated 10 April 2014)). In the EMS judgment, the CJEU stated that Polish provisions on taxation of investment funds from third countries (i.e., from outside the EU) are incompatible with EU law.

Read an April 2022 report prepared by the KPMG member firm in Poland