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Your e-PIT - new rules for filing tax returns

Your e-PIT - new rules for filing tax returns

Since January this year, a number of novelties have also been waiting for taxpayers of personal income tax. Some provisions have undergone significant changes and many new ones have emerged, including some improvements for taxpayers. We present below an overview of the most significant changes in PIT regulations, which came into force for 2019.

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 Mateusz Kobyliński

Partner, Global Mobility Services

KPMG in Poland

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In addition to the methods of filing tax returns by taxpayer functioning until the end of 2018 (in paper or electronically via the e-Deklaracje online filing system), a service consisting of preparing the tax return by the National Treasury Administration (Krajowa Administracja Skarbowa - KAS) has been introduced (without the need for the taxpayer to submit any additional application).

KAS will fill out tax returns for personal income tax payers based on information from remitters, data provided by the taxpayer in the tax return for the previous year (e.g. the KRS number of the public benefit organisation, to which they contributed 1 percent of tax resulting from the prior year return) and data contained in the own registers of the Head of KAS (e.g. the amount of tax advances paid during the tax year by the taxpayer) and other state registers (e.g. Social Security Institution (ZUS) with regard to the amounts of social security and health insurance contributions paid, as well as in the PESEL register in connection with data for purposes of applying the child relief deduction).

In 2019, KAS will prepare and make available in electronic form the PIT-37 and PIT-38 declarations (for the returns submitted for 2018). Starting from 2020, PIT-36 and PIT-36L declarations will also be added to the returns filled out by KAS.
 

Solidarity levy

Another novelty that taxpayers will face starting from 2019 is the solidarity levy introduced by the Act on the Solidarity Fund for Persons with Disabilities.

The aforementioned provisions introduce into the PIT Act a new tax in payable at a rate of 4 percent on the surplus of total income above PLN 1 000000 obtained in the tax year, to which the taxation rules set out in Article 27, Article 30b, Article 30c and Article 30f of the PIT Act apply, reduced by the amount of social security contributions and the amounts referred to in Article 30f section 5 of the PIT Act (i.e. amounts reducing the taxable base for the income of a controlled foreign company).

The income referred to above includes income taxed according to the progressive tax scale (rates of 18 and 32 percent), e.g. from employment contracts, civil law contracts, business activities (including those subject to the 19 percent tax rate) and income from capital gains (e.g. from the sale of securities or shares).
Income to which the new levy applies does not include income subject to flat-rate tax (e.g. interest and dividend income).

The taxpayer will be obliged to pay the solidarity levy by 30 April of the year following the tax year. What is important to note, is that the taxpayer will also be obliged to submit an additional declaration on the amount of the solidarity levy for the tax year.
 

Taxation of income from virtual currencies

As of this year revenues from trading in virtual currencies will be classified as capital gains in accordance with Article 17 of the PIT Act. This source of income will not be combined with other capital gains for tax purposes, however. Income from virtual currency trading will also be classified as capital gains even if the taxpayer receives it in the course of their business activity. As a result of adopting the above rules, a loss incurred in trading in virtual currencies cannot be offset against the taxpayer's other income, e.g. from the sale of shares, or from business activity.

Changes in rules on the sale of real estate

The changes introduced in the regulations enable a larger number of taxpayers to take advantage of the so-called housing relief by extending the period set for making housing expenditures from two to three years.

Moreover, the new regulations specify that the ownership right or a specific property right should be acquired by the statutory deadline in order for the expenses incurred for own housing purposes to be included in the so-called housing relief.

In the case of disposal sale of real estate or property rights acquired through inheritance, the five-year period is counted from the end of the calendar year in which the acquisition or construction of this real estate or property right by the testator took place. As a reminder: until the end of 2018, it was the date of death of the testator, i.e. the date on which the right of ownership passes to the heirs.

According to the new regulations, the tax-deductible costs in the case of a sale of real estate and property rights acquired through inheritance include documented costs of acquisition/construction of real estate by the testator, as well as debts and inheritance burdens, including legitim claims. A taxpayer may deduct debts and inheritance burdens incurred both before and after obtaining income, as well as after filing the PIT-39 tax return.
 

Copy of certificate of tax residence

The amended regulations also allow for the use of a copy of the certificate of residence in order to confirm the taxpayer's place of residence for tax purposes.

To make this possible, the copy must not raise any doubts, and the value of the payment to a non-resident must not exceed PLN 10 000 per taxpayer per year.

Copy of certificate of tax residence

The amended regulations also allow for the use of a copy of the certificate of residence in order to confirm the taxpayer's place of residence for tax purposes.

To make this possible, the copy must not raise any doubts, and the value of the payment to a non-resident must not exceed PLN 10 000 per taxpayer per year.

The amended regulations also allow for the use of a copy of the certificate of residence in order to confirm the taxpayer's place of residence for tax purposes.

To make this possible, the copy must not raise any doubts, and the value of the payment to a non-resident must not exceed PLN 10 000 per taxpayer per year.

Spouses, as well as single parents, may enjoy a preferential regime for tax settlements even if they file an amendment to their annual return after 30 April of the year following the year to which the return relates. Until the end of 2018, filing past the deadline resulted in the loss of the right to the preferential treatment.
 

Authors:

Mateusz Kobyliński, Partner in the Tax Advisory Department in the Global Mobility Services (PIT) team at KPMG in Poland

Grzegorz Grochowina, Manager in the Tax Advisory Department in the Global Mobility Services (PIT) team at KPMG in Poland
 

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