It is 14 June 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:
- Amended Decree on state aid granted to entrepreneurs for implementation of new investments
- CJEU’s ruling on the concept of fixed establishment for VAT purposes
- VAT credit carry forward does not expire
- Draft decrees on VAT e-commerce published by the Ministry
- Cashless taxpayer status for companies already in 2022
- Entry into force of the new WHT provisions postponed again
Amended Decree on state aid granted to entrepreneurs for implementation of new investments
On 9 June 2021, a draft amendment to the decree on state aid granted to entrepreneurs for implementation of new investments was published on the Government Legislation Centre’s website. The draft provides, inter alia, for lowering the capital expenditure threshold for companies involved with new investments and those willing to make reinvestments, regardless of the entity’s category, as well as extending the list of medium-sized cities losing their socio-economic functions, in connection with updates made to reflect the requirements of the Strategy for Responsible Development. The number of such cities is to increase from 122 to 139.
CJEU’s ruling on the concept of fixed establishment for VAT purposes
On 3 June 2021, the Court of Justice of the European Union issued a preliminary ruling (case file C 931/19) on how the concept of fixed establishment for VAT purposes should be defined. The Court stated that where a company has only technical resources (e.g. real property), yet it does not use any human resources enabling it to act independently, the criteria to consider that a taxable person has a fixed establishment are not satisfied. Consequently, a property which is let in a Member State does not constitute a fixed establishment within the meaning of Article 43 of Directive 2006/112/EC.
VAT credit carry forward does not expire
A written explanatory memorandum to the ruling of the Polish Supreme Administrative Court of 24 February 2021(case file FSK 126/20), according to which a taxpayer is entitled to carry forward their excess VAT credits to subsequent taxable periods and once the limitation period expires, the tax office may not challenge the amount of the excess tax charged over the due tax, was published last week. The SAC ruled that the Article 87(1) of the VAT Act, granting taxpayers the right to make a VAT credit carry forward, does not introduce any time limits, which means that once carried forward, an excess VAT credit becomes a tax liability component in the new settlement period.
Draft decrees on VAT e-commerce published by the Ministry
On 9 June 2021, the Ministry of Finance published two draft decrees specifying the rules of making VAT refunds as part of the new special procedures expected to enter into force on 1 July 2021 under the VAT e-commerce package, currently assessed by the Senate. The first draft decree is to amend the decree on applying for recovery of VAT charged in an EU country other than Poland. The latter is a draft of a new decree on the refund of VAT to certain entities and relates to foreign entities that apply for a VAT reimbursement in Poland.
Cashless taxpayer status for companies already in 2022
The Ministry of Finance announced a new Cashless Taxpayer Program intended for businesses which are principally involved in cashless transactions. Under the new scheme, two packages will be available, i.e. the SILVER Package, being a tax relief for buying an electronic payment terminal and handling cashless transactions, and the GOLD Package granting the status of a cashless taxpayer. The benefits provided to cashless taxpayers include a higher and time-unlimited relief for electronic payment terminal and accelerated VAT recovery within the EU (up to 15 days).
Entry into force of the new WHT provisions postponed again
On 11 June 2021, draft decrees postponing the entry into force of the amended WHT collection rules in PIT and CIT until the end of 2021 were published on the Government Legislation Centre’s website. As indicated in the explanatory memoranda to the drafts, further postponement is motivated by the COVID-19 pandemic and aims at protecting remitters from being subjected to additional obligations. In addition, the Ministry of Finance reminded that although it is currently working on amending the material provisions, it wishes to spare taxpayers the effort of adjusting to the new requirements during the pandemic.