The termination of credit agreements does not alter the status of the lender and neither of the lending institution within the meaning of the Act on consumer credit. This causes that such an entity should still be classified as a taxpayer of the tax on certain financial institutions.
The global financial crisis of 2008 has had a huge impact on the financial sector worldwide. Many countries, in order to counteract its negative consequences have imposed rigorous legal regulations on the financial institutions.
Since February 2016 Poland has also imposed tax on certain financial institutions whose main purpose is to secure the financial market in case of another financial crisis.
After more than a year of its functioning, it is worth taking a closer look at the practice of the tax authorities in this regard, particularly in relation to the understanding of the definition of the „taxpayer of the tax on certain financial institutions”.
In the judgement of the Administrative Court in Gliwice of 14 March 2017 (ref. I SA/Gl 1549/16; non-binding yet), it was stated that in order to determine whether a given company will be a taxpayer of the tax on certain financial institutions, it is necessary to consider the profile of its activity from a broader perspective. In such a case the following aspects should be primarily verified:
In the past, a company provided loans (and therefore could be classified as a taxpayer of the tax on certain financial institutions). However, the company ceased this activity before the introduction of the tax on certain financial institutions and, as it claims, has no intention to continue it.
Therefore, the company is no longer party to any loan agreement. Nonetheless, it still owns receivables under the loan agreements terminated beforehand and is vindicating them (i.e. the company currently is involved only in the purchases and sales of receivables).
The profile of the activity of a sister company from the same group also consists in providing loans. It is worth mentioning that the company itself does not own a total of assets above the taxable amount in accordance with the regulation of the tax on certain financial institutions (resulting from trial balance, a surplus of a total value of the taxpayer’s assets over PLN 200 mln). However, in the case of a combination of the company’s assets with the assets of the sister company, this limit would be exceeded (as according to the regulation of the tax on certain financial institutions the value of taxable assets should be calculated jointly for all dependent or indirectly dependent companies).
Additionally, within the scope of its economic activity, the company still has the following entry to the National Court Register: 64,92,Z. – other forms of granting loans.
According to the court, the aforementioned factors are crucial for the classification of the company as a taxpayer of the tax on certain financial institutions.
The court indicated that despite the termination of loan agreements, there still exists a legal relationship between the lender and the borrower, which results from the loan agreement concluded before. As a result, the fact that the company still vindicates receivables from such contracts classifies the company as a lending institution within the meaning of the Consumer Credit Act (Art. 5.2a of the Consumer Credit Act).
Subsequently, it also determines the classification of the company as a taxpayer of the tax on certain financial institutions according to the Tax on Certain Financial Institutions Act (Art. 4.9 of the Tax on Certain Financial Institutions Act).
Moreover, the fact that the company currently is not granting loans does not mean that it cannot restart this activity at any time, all the more so because such activity is defined for the company according to the Polish Classification of Economic Activities and such activity is also characteristic of other companies from the same group to which the given company belongs.
In my opinion, the argumentation presented by the court in the aforementioned judgement is justified due to the fact that the company did not clearly indicate a cessation of lending activity.
Market practice also clearly indicates that in order to be excluded from the scope of taxpayers of the tax on certain financial institutions, it is necessary to dispose of the loan portfolio and receivables related to such a loan portfolio.
According to the recent analysis presented by the Deputy Minister of Finance the inflows from the tax on certain financial institutions in 2016 was higher than had been expected and amounted to PLN 3.5 billion. It is estimated that in 2017 the inflows will amount to approx. PLN 3.9 billon. Furthermore it was indicated that it is paid on a regular basis and the provisions of the Tax on Certain Financial Institutions Act are precise to the extent that no significant interpretative issues arise. It was also indicated that the introduction of the tax on certain financial institutions does not negatively affect the terms of services provided by the financial institutions (including the prices). However, in fact, customers have noticed an increase in the prices of the services provided by financial institutions
Urszula Uchmańska, senior consultant in the Banking&Finance Team, Tax Advisory at KPMG in Poland
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