It is 21 December 2020. We invite you to the next episode of the “Weekly Tax Review” prepared in cooperation with tax experts in KPMG in Poland.
In today's episode:
Considerations related to remote work allowance taxation
By way of the ruling of 15 December 2020 (case file 0115-KDIT2.4011.739.2020.1.RS), the Head of the National Revenue Administration Information Centre pronounced herself on the taxation of allowance paid out to compensate for the increased electricity and internet bills. Due to the coronavirus pandemic, the employer instructed their employees to work remotely. The employer considered paying out additional benefits in the form of an allowance, inter alia, for bearing increased electricity and heating consumption costs. The employees would not be required to calculate the expenses made. In the applicant's opinion, the provided benefit constituted income which, however, should be exempt from taxation pursuant to Article 21(1)(13) of the PIT Act. In the opinion of the authority, pursuant to Article 3(4) of the COVID-19 Act, benefits of such kind are exempt from taxation. In fact, the effect would be the same, because they will not be subject to any PIT advances.
Shield 6.0 published in the Journal of Laws
On 15 December 2020, the Act of 9 December 2020 amending the Act on Special Arrangements for the Prevention, Control and Management of COVID‑19, Other Infectious Diseases and the Resulting Emergencies, and Certain Other Acts (commonly referred to as "Shield 6.0") was published in the Polish Journal of Laws. The Act provides for a raft of support instruments for industries particularly affected by the COVID-19-induced crisis, such as food services, culture and entertainment (stage events, museums, film and photography industry), sport industry (gyms, fitness clubs, swimming pools, aquaparks and health resorts), retail sales sector (clothing shops and retail sale on stalls and markets), tourist industry (hotels, travel agents, tour operators, and tour guides), transport industry (coach companies, taxi drivers), educational sector and catering activities.
Under Shield 6.0, an employer:
- who, as of 30 September 2020, conducted business activity,
- who conducts a prevailing activity under one of PKD (Polish Classification of Activity) codes set out in the Act,
- whose revenue, within the meaning of tax regulations, earned from the prevailing activity in one of the three months preceding the month of submitting the application was lower, due to the COVID-19 pandemic, by at least 40 percent compared to the revenue earned in the previous month or in the corresponding month of the previous year,
- for whom there are no prerequisites to declare bankruptcy and who are not subject to bankruptcy or liquidation proceedings,
- who by the end of Q3 2019 were not in arrears with respect to public law liabilities,
New rules on WHT collection further suspended
On 17 December 2020, two draft decrees further suspending entry into force of the new rules on WHT collection in PIT and CIT until 30 June 2021 were published on the website of the Government Legislation Centre. Implementation of the new collection mechanism has already been rescheduled a couple of times. The entry into force of the new WHT rules in CIT has already been postponed four times, most recently until 31 December 2020. When it comes to PIT taxpayers, the new regulations remained applicable for six months, from 1 July 2019 to 31 December 2019, only to be ultimately suspended until 31 December 2020. Simultaneously, the Ministry of Finance announced that it is yet to present a draft amendment to the WHT provisions, aimed at alleviating the resulting requirements. According to the explanatory memorandum to the draft decrees, further suspension of the deadline is due to the exceptional circumstances of the legislative process related to the COVID-19 pandemic. The decrees are to enter into force on 31 December 2020.
Explanatory notes to Estonian CIT subject to consultation
The Ministry of Finance is in the process of developing a practical guide on the Estonian CIT scheme. Explanatory notes thereto will protect companies and have a binding force for the tax administration. Comments to the solution may be sent until 17 December. The main assumption of the model is that eligible CIT payers will not have to pay income tax until they decide to distribute the company’s earning.
Amendments to excise duties provisions passed by the Sejm
The tax authorities have already issued the first individual rulings on GTU (Goods and Service Group) codes used in the new SAF-T files. In the individual ruling no.0114-KDIP1-3.4012.576. 2020.1.JG, the authority stated that marking cosmetic products containing alcohol, e.g. after shave lotions or hand disinfectants, with the code GTU_01 is not necessary, since it applies only to products intended for consumption. In turn, in the individual ruling no. 0111-KDIB3-1.4012.904. 2020.1.WN, the authority confirmed that the code GTU_09 does not need to be used when selling drugs to domestic entities, because such transactions do not have to be reported to the Chief Pharmaceutical Inspector. The ruling also confirmed that waste storage and recycling services do not have to bear the code GTU_05, since it applies to the sale of waste and not its management.