Poland: Tax relief measures include extended filing, paying deadlines (COVID-19)

Poland: Tax relief measures include extended filing

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.


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Extended filing, paying deadlines

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.

  • The deadline for submitting the corporate income tax return on form CIT-8 and for paying corporate income tax for 2019 is extended for all taxpayers until 31 May 2020.
  • For taxpayers that realized only tax-exempt income or whose revenue consisted of revenue from work for public benefit (at least 80%), the deadline for submitting tax returns is extended until 31 July 2020.
  • The deadline for preparing and submitting information pursuant to agreements concluded with non-residents (ORD-U) that expire during the period from 31 March 2020 to 31 May 2020 are extended for up to five months after the end of the tax year. For taxpayers whose tax year ended within the period from 31 December 2019 to 31 January 2020, the deadline for submitting information on revenue derived by legal persons not having a seat or place of management in Poland is extended for up to five months after the end of the tax year.
  • The deadlines for financial reporting were also extended. The deadlines for preparing and approving the annual financial statements were extended by three months, and by two months for entities subject to the supervision of the Polish Financial Supervision Authority.

Tax relief legislation

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: 

  • Remitters of social security contributions that on 29 February 2020 employed less than 10 persons subject to social security contributions, provided that they were reported as remitters before 1 February 2020
  • Remitters of social security contributions conducting non-agricultural business activity paying social security contributions only for themselves, provided that they were operating before 1 February 2020 and that their revenue from business activity in the month to which exemption applies was not greater than 300% of the expected average wage for 2020

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: 

  • By 30 April 2020, the deductible amount is equal to 200% of the amount of the donation.
  • In May 2020, the deductible amount is equal to 150% of the amount of the donation.
  • From 1 June 2020 to 30 September 2020, the deductible amount is equal to 100% of the donation.

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: 

  • For certain tax advances collected in March and April 2020 on revenues; the date for the requirement to collect and remit advance payments of individual income tax will be 1 June 2020 (provided that the taxpayer has been subject to negative economic impact of COVID-19).
  • The deadline for the minimum commercial property tax payment for the period March-May 2020 is extended to 20 July 2020 (provided that the taxpayer has been subject to negative economic impact of COVID-19 in the given month and the revenue from business activity was lower by at least 50% compared to previous months).
  • The deadline for mandatory submission of new SAF-T files is extended from 1 April 2020 to 1 July 2020.
  • The deadline for the required entry of information by companies entered into the National Court Register (KRS) before 13 October 2019 to the Central Register of Beneficial Owners is extended to 13 July 2020.
  • The deadline for filling transfer pricing returns (on form TP-R) is extended until 30 September 2020; this applies for tax years starting after 31 December 2018 and ending before 31 December 2019.
  • The deadline for submitting a notification of payments made to an accounts from outside the so-called “white list” of VAT taxpayers has been extended from three days to 14 days.
  • The effective date of the new matrix of VAT rates has been postponed from 1 April 2020 to 1 July 2020.
  • The tax on retail sales has been deferred until 1 January 2021.
  • The deadlines for mandatory reporting of tax schemes will not start to run, and for any already running deadlines, will be suspended starting from 31 March 2020 until the date when the state of epidemic threat or the state of epidemic concludes, but in any event, no later than 30 June 2020.
  • Applications for binding rulings submitted and pending before the effective date of this legislation and applications for binding rulings submitted as of the legislation’s effective date until the date of when the state of epidemic threat or the state of epidemic is withdrawn are extended by three months (that is, the three-month deadline for issuing a binding ruling is extended by another three months).

KPMG observation

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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