It is 6 April 2021. 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:
- Expected extension of the Anti-Crisis Shield beneficiary group
- Draft bill on a fee on certain single-use plastic products
- Subsequent explanations concerning transfer pricing issued by the Ministry of Finance
- The Constitutional Tribunal’s ruling on the tax on real estate not used in business activity
- The draft general ruling on defining controlled transactions
- Amendments to the Excise Duty Act
Expected extension of the Anti-Crisis Shield beneficiary group
On 1 April 2021, Prime Minister announced the launch of a subsequent Anti-Crisis Shield, valued at approximatively PLN 30 billion. The measures announced include updating of the list of PKD [Polish Classification of Activities] codes entitling to reduced ZUS contributions and downtime benefit. According to the announcements, the scheme is to apply to a total of 60 industries, including 16 new ones, up to now not covered by the aid measures. Under the new rules, the aid will be granted to entities operating under the selected PKD codes, the list of which was updated on 31 March 2021. The draft amendments are to be published in the coming days.
Draft bill on a fee on certain single-use plastic products
The Ministry of Climate and Environment published a draft bill amending the Act on the Entrepreneur Duties to Manage Certain Waste and Product Fee. The bill was developed to support implementation of the Directive (EU) 2019/904 of the European Parliament and of the Council of 5 June 2019 on the reduction of the impact of certain plastic products on the environment. It introduces a fee on placing on the market and making available of single-use plastic products, such as cups for beverages, including their covers and lids, and food containers used for fast food for immediate consumption, collected and remitted by retailers, wholesalers and food outlets offering single-use plastic containers or products packed in single-use plastic containers. The rate will be fixed by way of a separate decree but will not exceed PLN 1 per one single-use plastic packaging. Moreover, the draft bill provides for the ban on placing on the market of any products made of oxo-degradable plastic, i.e. products which are non–recyclable (including cotton buds, single-use utensils, plates, straws, stirrers etc.). The new provisions would enter into force on 3 July 2021.
Subsequent explanations concerning transfer pricing issued by the Ministry of Finance
On 2 April 2021, the Ministry of Finance issued tax explanatory notes concerning transfer price adjustments and the comparable uncontrolled price method, in relation to the provisions entered into force on 1 January 2019. The explanations on transfer price adjustments deal with such issues as making adjustments in the context of arm’s length principle, the scope of the notion of transfer price adjustments under CIT and PIT Act, and conditions for making transfer price adjustments along with consequences of their non-fulfilment. In turn, explanations on comparable uncontrolled price method cover prerequisites for applying the comparable uncontrolled price method, variants of the CUP method, and comparison of the CUP method with other methods of determining arm's length prices.
The Constitutional Tribunal’s ruling on the tax on real estate not used in business activity
A written justification for the ruling of the Polish Constitutional Tribunal of 24 February 2021 (case file SK 39/19) on the tax on real estate not used in business activity was published in the Polish Journal of Laws. The justification states that any interpretation of Article 1a(1)(3) of the Act on local taxes and charges which treats the real property as connected with business activity just because of the fact that its owner conducts business operations shall be deemed unconstitutional. The ruling pertains directly to individuals conducting business activity who at the same time own real property, which is not, in fact, used for the purposes of such business activity, but may also impact the scope of taxation of real estate owned by entrepreneurs being legal persons.
The draft general ruling on defining controlled transactions
The Ministry of Finance published a draft general ruling on providing definition of controlled transactions, evoked in CIT and PIT provisions. In the draft, the Ministry indicated, inter alia, that the definition should primarily provide that controlled transactions rely on activities of an economic nature that must be identified on the basis of the actual behaviour of the parties and the conditions of which have been set or imposed as a result of the relationship. Only if the above-specified requirements are met, the activities can be categorized as controlled transactions. Moreover, in the draft it was stated that transactions such as dividend pay-out in companies, payments from the partnership’s profits or additional contributions constitute activities performed by economic operators on their own account and pursuant to the applicable rules, with partners having no influence of the payment amount, and as such do not constitute controlled transactions, meaning that they are relieved of the documenting obligation.
Amendments to the Excise Duty Act
On 30 March 2021, the Polish Sejm passed an act amending the Act on Excise Duty and certain other acts. The purpose behind the amendments is to tighten up the trading market for denatured alcohol, energy products or raw tobacco, eliminate irregularities in the taxation of passenger vehicles and adapt Polish law to EU regulatory framework. Furthermore, the amending act imposes a 5-year validity period for Binding Excise Information (up to now issued without the time limitation). It also provides that excise duty returns and excise duty record will be kept and submitted only in electronic form, from 1 July 2021 and 1 January 2022, respectively. The act is now to be signed by the President with the expected entry date being 1 May 2021.