Poland: Employee compensation under settlement; cashless payments; VAT on payment for transmission easement

A report that includes summaries of recent court decisions.

A report that includes summaries of recent court decisions.

The KPMG member firm in Poland prepared a report that includes summaries of the following court decisions.

  • The Supreme Administrative Court on 26 March 2024 held (case II FSK 832/21) that compensation paid under a settlement agreement with an employee must be treated as the employee’s taxable wages, and not subject to exemption under Article 21(1)(3b) of the PIT Act, rather than as damages for the termination of the employment contract since a settlement between the parties was reached.
  • The Provincial Administrative Court in Lublin on 27 March 2024 held (case I SA/Lu 33/24) that a payment made by depositing cash into a supplier’s bank account of the supplier does not meet the conditions for making a payment through a payment account (i.e., a “cashless payment”) as required for deductibility under Article 22p(1) of the PIT Act.
  • The Provincial Administrative Court in Gdańsk on 27 March 2024 held (case I SA/Gd 1102/23) that payment for establishment of a transmission easement falls within the scope of the provision of services for purposes of Article 8(1)(2) and Article 5(1)(1) of the VAT Act. However, to be taxable, the entity rendering such services must be a value added tax (VAT) payer with respect to that taxable activity. Accordingly, if the property on which transmission easement is established is not used in business activity, it must be assumed that the taxpayer does not act as an entity pursuing business activity with respect to that transaction.

Read the April 2024 report


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