It is 26 July 2021. We invite you to the next episode of the “Weekly Tax Review” prepared in cooperation with tax experts in KPMG in Poland.

“Fit for 55” package announced by the European Commission

On 14 July 2021, the European Commission adopted the “Fit for 55” package, a suite of proposals to make the EU policies fit for reducing net greenhouse gas emissions by at least 55 percent by 2030. The package is to bring, inter alia, a new Carbon Border Adjustment Mechanism (CBAM), which will put a carbon price on imports. CBAM will impose a levy on imports of certain goods in carbon-sensitive sectors like cement, electricity, fertilizers, iron and steel, aluminium, from non-EU countries, if such goods or products made thereof are imported into the EU Customs Union. Before importing such goods or products, the importer will have to submit, under a special procedure, an application for an authorization to import them into the territory of EU Customs Union, and then purchase a special certificate, the cost of which will be determined by reference to the weekly average price of carbon permits auctioned by governments under the EU ETS. The new levy is to become applicable on 1 January 2023.

Redeemed part of the subsidy granted under the Financial Shield: no tax but with costs maintained

On 20 July 2021, the decree of the Minister of Finance, Development Funds and Regional Policy on exempting income (revenue) earned from the redeemed part of the subsidy granted by the National Development Fund under the Financial Shield schemes from tax came into force. The decree provides for the waiver of tax on the value of the redeemed part of the subsidy granted under the Financial Shields of the Polish Development Fund and will apply to income (revenues) obtained by the scheme beneficiaries from 1 June 2021 to 31 December 2022. Importantly, in the announcement published on the National Revenue Information Service’s website, Deputy Minister of Finance, Jan Sarnowski, declared that the waiver on tax on revenue from the redeemed PDF subsidy will not impact classification of the subsidized costs and that the subsidized costs will be classified as tax-deductible costs in line with general principles. This means that the expenses covered by the subsidy constitute tax-deductible costs if they meet the general conditions to be classified this way, in line with the applicable tax acts.

Current state of a parliamentary work on the packaging fee

In response to a parliamentary inquiry no. 24728, Secretary of State at the Ministry of Climate and Environment, Jacek Ozdoba, provided details on the state of work on the new packaging fee. The inquiry related mainly to how the new levy will impact municipality budgets. The Ministry reminded that the draft bill amending the Act on Packaging and Packaging Waste and certain other acts is currently elaborated within the Ministry and has not yet been made available to the public, therefore some draft regulations, also at later stages of legislative work, may still be modified. Consequently, at present, it is still impossible to provide detailed information on such issues as the percentage share of funds from the packaging fee or the criteria for their distribution, yet it is the Ministry’s intention to allocate the majority of funds obtained in this way to municipalities for the waste management purposes. The allocation criteria will, however, definitely include the results achieved by municipalities on waste recycling and preparation for reuse. The Ministry also declared that no transitional solutions are currently planned within the extended producer responsibility for packaging system.

TPR-C (3) and TPR-P (3) interactive forms now available

An updated interactive form for providing transfer pricing information by legal entities, TPR-C (3), is now available on the Tax Portal of the Ministry of Finance. The form has been updated to reflect the requirements of the decree of the Minister of Finance of 21 December 2018 on transfer pricing documentation related to corporate income tax and it is to be applied to submit information on transfer prices for the tax year beginning after 31 December 2019. An interactive form for submitting information on transfer pricing dedicated to natural persons, TPR-P (3), has also been unveiled.

Delayed implementation of the Czech e-commerce package to impact Polish companies

The Czech government delayed the implementation of EU regulations introducing e-commerce package provisions into the domestic regulatory framework, the deadline for which was set before the beginning of July this year. The delay affected Polish businesses selling goods to Czech customers or owning warehouses in the Czech Republic, from where the gods are dispatched to other Member States. Polish sellers may submit registration applications under the OSS procedure to declare sales to the Czech Republic, in line with the Czech VAT rate, and settle the tax due with the Polish tax office. Czech authorities, however, have no formal tools to accept the VAT collected in this way from the Polish tax office and to recognize the settlement as correct. The Czech government made a special announcement, according to which, taxpayers may apply the EU regulations until the package implementation process is completed. However, entrepreneurs who decide to sell their goods to the Czech Republic during the transitional period will still run the risk of their settlements not being approved by the Czech tax authority.

Completing the MPP and SW fields in SAF-T will not be treated as an error

On 1 July 2021, a decree of the Minister of Finance amending the decree on the detailed scope of data provided via tax returns and VAT records came into force. The amended provisions must be taken into account when submitting the SAF-T for July 2021, with the deadline falling on 25 August 2021.

One of the amendments brought by the decree is that the obligation to fill the “MPP” and “SW” fields has been waived. The aforementioned fields, however, are still present the JPK_V7M and JPK_V7K forms, since the Ministry of Finance has not yet adjusted them accordingly, with the new schemas becoming available at the beginning of next year. Fortunately, taxpayers who fail to adapt their financial and accounting systems to the new regulations or fill the SPM and SW fields by mistake will not suffer any consequences, since in reply to a press inquiry, the Ministry of Finance confirmed that the completion of the SW and SPP fields in JPK_V7M and JPK_V7K will not be treated as an error. Thus, in such situations, no adjustments are required from the taxable person’s part.

Possibility of applying GAAR to be assessed via clearance opinion and not an individual ruling

In its ruling dated 16 July 2021 (case file II FSK 2478/18), the Supreme Administrative Court concluded that the provisions aimed at tax authorities that define their obligations or rights related to the tax proceedings conducted may not be the subject of individual rulings. The case at hand related to the application for issuing a tax ruling, in which the company inquired if the planned merger meets the conditions for being excluded from revenues and whether this exclusion may be limited by any regulations, including, inter alia, General Anti Avoidance Rule (GAAR) provisions. In the opinion of the tax authorities, supported by the Supreme Administrative Court, such an issue should be the subject of a request for a clearance opinion, and not an individual ruling.