The tax authority has provided tax relief in the form of extensions of the deadlines for filing annual corporate tax returns and remitting corporate tax payments, and legislation has been enacted to provide tax relief in response to the coronavirus (COVID-19) pandemic.
Extended deadline for filling corporate income tax returns, making tax payments—The Ministry of Finance on 27 March 2020 issued a regulation that extends the deadlines for submitting corporate income tax returns for 2019 income (losses) and for paying tax by certain corporate taxpayers.
Legislation has been enacted providing tax relief measures in response to the COVID-19 pandemic. Among the tax relief provisions are the following items:
Tax loss carryback—Corporate and individual taxpayers can offset tax losses incurred in 2020 against taxable income declared in their 2019 income tax returns, subject to a ceiling of PLN 5 million loss; the offset rules are available only with regard to taxpayers whose revenue in 2020 will be lower by at least 50% (when compared to revenue in 2019).
Opt-out option for “small taxpayers” on tax advances in a simplified form—Small taxpayers who in 2020 paid advances (estimates) of corporate income tax and individual income tax by means of a simplified form can opt out of making further advance payments during the tax year.
Social security contributions—There are exemptions from having to pay social security contributions for the period from 1 March 2020 to 31 May 2020, if applications are filed by:
The application for exemption from the obligation to remit social security contributions is to be submitted by 30 June 2020, either on paper or as an electronic document signed with a qualified electronic signature, a trusted signature or a personal signature, using the information profile created in the IT system of the Polish Social Security Administration.
Exemption from bad-debt relief—An exemption is provided from the requirement to increase the debtor's taxable base by payables that have not been paid or settled in any other form in 90 days measured from the date of expiration of settlement periods falling in 2020, provided that in the given settlement period, the taxpayer suffered negative economic consequences of the COVID-19 pandemic and the income was at least 50% lower than income in the corresponding period in the previous tax year.
Tax incentives for donations made in response to COVID-19—During the legislative process, changes were made to the provisions relating to tax incentives provided to support the fight against the COVID-19 pandemic. Current measures provide for income tax deductions (for corporate taxpayers and individual taxpayers) regarding donations made to health care providers in response to the COVID-19 pandemic, from 1 January to 30 September 2020 (the proposed draft would have allowed deductions throughout all of 2020). Under the enacted provisions, the deductible amount depends on the timing of the donation. For instance, donations made:
Moreover, taxpayers can claim a one-time tax depreciation write-off from the initial value of fixed assets purchased in order to produce goods used to address the COVID-19 pandemic (such as protective masks or respirators). Taxpayers will also be allowed to deduct qualifying costs of research and development (R&D) aimed at developing products necessary to counteract the COVID-2019 pandemic.
Temporary stay of “prolongation fee” and default interest—There is a temporary stay of the “prolongation fee” (the amount imposed in the event of deferral or payment in installments of taxes and ZUS contributions due) for the period starting 1 January 2020, provided that an application is submitted during the state of epidemic threat or the state of epidemic and within 30 days from the end of the pandemic emergency.
The Minister of Finance also was given authority by the legislation to issue a regulation that allows for relief from imposition of default interest on tax arrears (with the regulation specifying the type of tax, the territorial scope of the interest relief, the period in which the relief remains in force, and the target group of taxpayers) with regard to the duration of the state of epidemic threat and the state of epidemic due to the COVID-19 pandemic.
Voluntary disclosure, individual income tax—Filing the annual individual (personal) income tax return and settling the related tax liability after the statutory deadline, but no later than by 31 May 2020, will be treated as filing a voluntary disclosure statement, and the tax authorities will not initiate any legal proceedings against the individual taxpayer and will discontinue any pending ones.
Suspension of all procedural and court statute of limitations—During the COVID-19 pandemic, the statute of limitations for all procedural and judicial deadlines for matters pending in the judicial and administrative courts, as well as administrative proceedings, tax audits, and customs audits will not begin to run and any tolled statute of limitations will be suspended.
Postponement of other deadlines—There are other deadline postponements such as:
One measure not included in the enacted legislation is an exemption from imposition of the stamp duty (tax) on loan agreements. The draft version of the legislation has proposed an extended date of 31 August 2020 for entrepreneurs whose financial liquidity deteriorated in respect of the negative economic consequences of the COVID-19 pandemic. During the legislative process, this measure was removed.
Read an April 2020 report [PDF 247 KB] prepared by the KPMG member firm in Poland
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