It is 2 November 2020. We invite you to the next episode of the “Tax Weekly Review” prepared in cooperation with tax experts in KPMG in Poland.
In today's episode:
- Income tax amendments are almost here
- Slim VAT initiative adopted by the Cabinet
- Publication of the e-commerce VAT package
- Works on the Industry Anti-Crisis Shield are underway
- Amendments to the EMCS PL2 system
- 0% VAT for donations of portable computers and tablets to educational facilities
- The R&D relief with no effect on the solidarity levy
Income tax amendments are almost here
On 28 October 2020, the Lower House of the Polish Parliament adopted acts amending income tax schemes which, inter alia, extend CIT obligations to limited partnerships and introduce a solution dubbed "Estonian CIT". In the course of legislative work carried out by the Sejm, the act granting the status of CIT payer to limited partnerships was supplemented by the possibility of postponing the application of the provisions of the CIT Act by limited partnerships until 1 May 2021 (decisions in this regard will be made by the company). Furthermore, the definition of a real estate company has been modified and the provisions on the obligations of such a company acting as a tax remitter in the event of the sale of its shares have been clarified. Both amending bills were submitted for approval to the Upper House of the Polish Parliament.
Slim VAT initiative adopted by the Cabinet
On 28 October 2020, the Polish Council of Ministers approved the government bill amending the VAT Act and the Banking Act, introducing the Slim Vat package. The Act has been submitted before the Sejm. The bill provides for, inter alia, elimination of the obligation to obtain confirmation of receipt of a correcting invoice, extension of deadline for the export of goods to apply the zero percent rate by exporters from 2 to 6 months as well as using currency conversion rates for VAT purposes according to the rules applicable under the provisions on income tax. The bill also provides for introduction of an all-electronic TAX FREE billing system and supervision over the issued TAX FREE documents along with the VAT refunds obtained. New regulations are expected to enter into force on 1 January 2021.
Publication of the e-commerce VAT package
On 29 October 2020, a bill comprising a suite of amendments to the Polish VAT Act and certain other acts was published on the website of the Government Legislation Centre. The bill is to incorporate into the national law the EU provisions on the so-called "e-commerce VAT package", the aim of which is to tighten tax collection for cross-border electronic trade between entrepreneurs and consumers.
The bill includes a definition of intra-community distance selling of goods and distance selling of goods imported from non-EU countries, extension and amendment of the special procedure for telecommunications, broadcasting and electronically provided services (operating under the name of Mini One Stop Shop until the end of 2020) and exemption from VAT due on importation with a value of EUR 150 or below if the tax is declared and settled under the IOSS scheme introduced by the bill. The new provisions are also aimed at eliminating the current import exemption for low value goods with an intrinsic value below EUR 22 in the entire EU.New regulations are expected to enter into force on 1 July 2021.
Works on the Industry Anti-Crisis Shield are underway
On 27 October 2020, the first reading of the bill amending the Act on Special Arrangements for the Prevention, Control and Management of COVID‑19, Other Infectious Diseases and the Resulting Emergencies (the Industry Anti-Crisis Shield), was held at the sitting of the Lower House of the Polish Parliament. The bill includes a raft of amendments, among others providing for a downtime benefit and an exemption from social security contributions for businesses operating in industries that were gravely impacted by the new safety rules, or bearing important costs related to sanitary restrictions resulting in a decreased number of clients. The main criteria for receiving the support will be a decrease in turnover and operating under the appropriate primary PKD (Polish Classification of Activity) code. The bill was submitted to the Sejm's Commission for Social Policy.
Amendments to the EMCS PL2 system
On 28 October 2020, the bill amending the Act on Excise Duty and certain other Acts was submitted to the Lower House of the Polish Parliament. The bill provides for a raft of amendments to the Excise Movement and Control System (EMCS PL2), used for monitoring of the movement of excise goods (alcoholic products, energy products, or tobacco products) under duty suspension in domestic and intra-Community trade between the Member States of the European Union and in importation and exportation, including simplified rules for excise goods monitoring based on e-DD documents via EMCS PL2. New regulations are expected to enter into force on 1 February 2021.
0% VAT for donations of portable computers and tablets to educational facilities
A draft decree of the Minister of Finance, according to which it will be possible to re-introduce the possibility of temporarily applying the 0% VAT rate to donations of portable computers and tablets made to educational facilities, humanitarian, charity or educational organizations, as well as the operator of the National Educational Network and the authorities governing schools and institutions for further free-of-charge distribution to educational institutions, was published on the website of the Government Legislation Centre. Under the bill, it will be possible to apply the preferential VAT rate to donations made from 1 September 2020 to the date of recalling the state of epidemic announced due to COVID-19.
The R&D relief with no effect on the solidarity levy
On 23 October 2020, the Head of the National Revenue Administration Information Centre issued an individual ruling (ref. no. 0115-KDIT3.4011.516.2020.1.KR), under which deducting R&D qualifying costs from the tax base will not decrease the basis for calculating the solidarity levy. These costs were not listed in Article 30h(2) of the PIT Act, providing a closed catalogue of costs reducing the basis for calculating the solidarity levy.