It is 5 July 2021. We invite you to the next episode of the “Weekly Tax Review” prepared in cooperation with tax experts in KPMG in Poland.

Solutions to bring capital back to Poland and changes to transfer pricing rules in pre-consultation

On 28 June 2021, the Ministry of Finance announced that it launched pre-consultations on a draft bill amending the PIT Act, CIT Act, and certain other acts, which is also to bring a raft of amendments to the transfer pricing rules. The proposed amendments are part of the new stimulus plan dubbed the Polish Deal. The draft bill provides, inter alia, for introducing an income tax relief for taxpayers moving to Poland, an incentive in form of a lump-sum on foreign revenue aimed at individuals moving their place of residence to Poland, a capital repatriation scheme and a tax allowance for taxpayers working for science, culture and sport (a CSR allowance). In terms of transfer pricing, the draft bill is to bring elimination of the statement on transfer pricing documentation and the arm's-length nature of the transfer pricing applied as a separate document to include it in the transfer pricing report (TPR), so that the taxpayer is required to submit only one form, as well as extension of the deadline for submission of the Local File to 14 days at the tax authority’s request.

Entry into force of the new WHT collection mechanism postponed again

On 30 June 2021, the new decrees of the Minister of Finance providing for further postponement of entry into force of the new WHT collection mechanism in CIT and PIT, until 31 December 2021, came into force. Importantly, according to the information coming from the Ministry, legislative work on the amendments to the provisions on the new withholding tax collection system it is almost done. It is assumed that a comprehensive amendment to the WHT collection mechanism regulations is to be passed by the end of 2021.

Amendments to VAT regulations introduced on 1 July 2021

On 1 July 2021, a suite of amendments to the VAT Act came into effect. The amendments were introduced in the context of the VAT e-commerce package, which brings changes to the VAT collection scheme and a raft of enhancements to VAT settlements in cross-border e-commerce between companies and consumers (B2C).

Other amendments relate to the use of SAF-T. Under the new regulations, entities submitting JPK_V7 files are, inter alia, relieved of the obligation to mark split payment transactions with the “MPP” designation. In turn, they will be required to apply new markings introduced along the VAT e-commerce package. Moreover, clarifications were made to designations relating to groups of goods and services (GTU). The list of entities required to record turnover by means of online cash registers also got extended. Importantly, starting from 1 July 2021, companies willing to make sales via the new TAX-FREE system (the use of which becomes mandatory as of 1 January 2022) may register on the PUESC [Electronic Services Portal of the Customs Service] portal to indicate all places in which the sales and tax refunds under the TAX-FREE procedure will take place.

Planned amendments to excise duty regulations

The Ministry of Finance announced a suite of draft amendments to the excise duty regulations, aimed at implementing the provisions of three EU directives (namely, Council Directive (EU) 2019/2235, Council Directive (EU) 2020/262, and Council Directive (EU) 2020/1151). The amendments relate primarily to the general excise duty collection rules, including digitization of the intra-Community movement of products subject to excise duty which have been released for consumption in the Member State of dispatch (outside the duty suspension procedure for excise goods) by covering it with Excise Movement and Control System (EMCS), introduction of regulations aimed at harmonizing excise and customs procedures in connection with the entry into force of the Union Customs Code, and introduction of new rules aimed at ensuring coherence between the electronic Administrative Document (e-AD) and the import or export customs declaration. The essential provisions contained therein are expected to enter into force in February 2023.

New type of business entity: simple joint – stock company

On 1 July 2021, provisions introducing a new type of legal entity, i.e. simple joint-stock company, came into effect. Under the new rules, a simple joint-stock company can be established by one or more individuals for any legally authorized purpose. It can be registered in person or online (within 24 hours). The minimum company share capital will amount to PLN 1. Under a simple joint-stock company, it will be possible to make contribution in the form of work or services for the company. Moreover, the company's assets can be taken over by a single designated shareholder. Importantly, the founders can choose from among dualistic (the management board supervised by a supervisory board) or a monistic (a board of directors) governance structure. The monistic management structure based on a board of directors has been previously unknown in Polish law.

Extended deadlines for applying preferential real estate tax treatment

On 29 June 2021, the amendment to the Act of 2 March 2020 on specific solutions related to preventing, counteracting, and combating COVID-19, other infectious diseases and the resulting crisis situations came into force. One of the changes brought about by the amendment is the possibility to extend deadlines for providing preferential real estate tax treatment (including granting tax exemptions or extending the deadline for payment of instalments) by municipalities to selected groups of entities, non-governmental organizations, and other entities conducting public benefit activities, suffering from deteriorated financial liquidity due to the pandemic. 

No tax on the redeemed part of the PDF subsidy granted under the Financial Shield

During a press conference held on 29 June 2021, Prime Minister, Mateusz Morawiecki, announced that the government is to abandon collection of tax on the redeemed part of the subsidy granted by the Polish Development Fund under the Financial Shield stimulus package. The solution would apply to micro-, small, medium-sized, and large enterprises. The resulting benefits for business are estimated at around PLN 8-10 billion. For some time now, information on abandonment of tax on the redeemed part of the subsidy has been emerging, inter alia, in the context of the Convergence Program, yet it is the first time this measure has been officially announced by the Prime Minister.