It is 30 August 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:
- Extended SAF-VAT with updated logical structure
- Draft of the new holding law proceeded by the Sejm
- Request for CJEU’s preliminary ruling: Article 306 of Directive 112 and consolidators buying and re-selling accommodation services
- Recognizing deploy of the purchased IT systems as R&D works under Article 4a(26-28) of the CIT Act
- Prerequisites for classifying bitcoin trading as business activity for VAT purposes
Extended SAF-VAT with updated logical structure
The Ministry of Finance presented an updated draft of the logical structure of the JPK_V7M(2) and JPK_V7K(2) files to enable adjusting IT systems to the introduced changes. The new version of the logical structure was developed based on tax consultations with the business community and reflects all the amendments introduced between 1 July 2021 and 1 January 2022.
Draft of the new holding law proceeded by the Sejm
A draft bill amending the Polish commercial companies code and certain other acts was published on the Sejm’s website. According to the explanatory statement, the bill is intended to introduce into the Polish regulatory framework provisions on holding law, which, in essence, are to govern private law relations between the parent company and its subsidiaries, taking into account the interests of creditors, members of the governing bodies and minority partners (shareholders) of the subsidiary, equip supervisory boards with tools enabling more effective corporate supervision, as well as dispel doubts raised by entrepreneurs. The essential part of the new provisions is to enter into force 6 months after publication of the act in the Polish Journal of Laws.
Request for CJEU’s preliminary ruling: Article 306 of Directive 112 and consolidators buying and re-selling accommodation services
On 26 August 2021, the Supreme Administrative Court (case file I FSK 329/18) requested CJEU to give a preliminary ruling on whether Article 306 of Council Directive 112 should also apply to taxable persons being hotel consolidators purchasing and re-selling accommodation services to other entities conducting business activities, in situations where such transactions are not accompanied by any auxiliary services. The case at hand related to a company willing to determine whether the sale of accommodation services, not accompanied by any auxiliary services, initially bought in its own name from other taxable persons, should be subject to VAT as a travel service under the special margin scheme set forth by Article 119 of the VAT Directive. The court of first instance ruled that such services enter into a broader travel service category and as such should be taxed in line with the VAT margin scheme.
Recognizing deploy of the purchased IT systems as R&D works under Article 4a(26-28) of the CIT Act
In its ruling dated 25 August 2021 (case file II FSK 138/19), the SAC stated that activities consisting in finding additional possibilities of using available software and IT systems in a new and innovative way cannot be entered into the R&D category, since the purpose of the actions taken is to improve the company's business. Implementation of innovative software enhancing the company's operations in the areas indicated in the application and improving the company's competitiveness compared to other enterprises in given industry is not equal to undertaking R&D activities.
Prerequisites for classifying bitcoin trading as business activity for VAT purposes
In its ruling of 19 August 2021 (case file I FSK 590/18), the SAC pronounced itself on the possibility of classifying bitcoin trading as business activity for VAT purposes. According to the Court, a natural person placing a several dozen orders over a period of two years, which resulted in several thousand bitcoin purchase and sale transactions, does not conduct business under the VAT Act. This is because such activities enter into own asset management through making individual investments.