Poland

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Return to homepage  |  Last updated: 30 September, 2020

On 18 March 2020, the government presented economic measures in response to the coronavirus (COVID-19) pandemic, and among those measures are tax-related proposals. The Minister of Finance announced that the tax on retail sales would be deferred until the end of the year.

On 21 March 2020, the government submitted a preliminary Anti-Crisis Shield for consultation and on 25 March 2020, the Office of Competition and Consumer Protection (UOKiK’s) issued Anti-Crisis Shield proposals for consideration.

On 31 March 2020, the Polish Parliament adopted the package of legislative laws related to Anti-Crisis Shield, which was subsequently signed by the President. The majority of new regulations entered into force on 1 April 2020

On 8 April 2020, the Polish Sejm adopted an additional package of legislative laws related to Anti-Crisis Shield. On 17 April 2020 the act was approved by the Polish Sejm and on the same day signed by the President.

Also on 8 April 2020 the Polish Government announced a new Anti-crisis program called the Financial Shield which was subsequently approved by the parliament and signed by the President on 17 April 2020.

On 30 April 2020 the Polish Sejm adopted the Anti-Crisis Shield 3.0., a new support program that extended the application criteria of the antecedent Anti-crisis Shields. On 15 May 2020, the act was signed by President.

On 11 June 2020 the Financial Shield was ultimately approved by EC.

On 24 June 2020, the Act on subsidization of interest on bank loans granted to entities affected by COVID-19 and simplified arrangement approval proceedings due to COVID-19, commonly referred to as Anti-Crisis Shield 4.0, came into force.

On 21 July 2020, EU leaders agreed on a recovery plan (Recovery and Resilience Facility) and a Multiannual Financial Framework for 2021-2027. To benefit from the plan, the Member States must prepare Country / National Recovery Plans. In the beginning of August 2020, the Government launched a call for projects under the National Recovery Plan.

On 11 August 2020, the Act on granting public aid to rescue or restructure entrepreneurs came into force.

On 16 September 2020, the Government announced a new strategy of tax and regulatory simplifications to help attract investments to Poland and to support domestic business in development along with foreign expansion. It was presented under a working name of “Poland: the economic center of Europe”. The details are to be presented at the turn of September and October 2020.

On 17 September 2020, EC presented guidelines for drawing up national plans for reconstruction – as part of European Recovery and Resilience Facility – and the Government started to assess the projects submitted under the National Recovery Plan. The Government assumes that the first draft of the National Recovery Plan will be submitted to EC on 15 October 2020.

On 21 September 2020, European Commission approved the proposed Financial support for tourism industry . Its value is estimated at ca. EUR 193 m.

On 22 September 2020, the President signed the bill commonly referred to as the Anti-Crisis shield for tourism industry or Anti-Crisis Shield 5.0. The provisions of the bill will come into force on 15 October 2020.

Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.

Anti-Crisis Shield proposals issued by the Office of Competition and Consumer Protection (UOKiK’s) on 25 March 2020

• The President of the Office of Competition and Consumer Protection (“UOKiK”) is actively combating the economic effects of the COVID-19 pandemic in Poland and proposes solutions that are intended to protect consumer interests and counter abusive practices on the market. The key proposed solutions relate to the following actions:
• Proposed new price control tools imposing price and margin ceilings on certain products important for society and new accompanying sanctions:
  • up to PLN 5 million for violating the prohibition on applying prices or margins above the respective ceiling;
  • up to 10% of the annual turnover for repeated or large-scale infringements.
• UOKiK also proposed amendments to the so-called “Crisis Act” – the Act of 2 March 2020 on extraordinary measures aimed at preventing and combating COVID-19:
  • Based on the proposed regulations, the Minister of Health in consultation with the Minister of Development and the Minister of Agriculture and Rural Development will be authorized to issue ordinances imposing maximum prices or maximum margins on wholesale and retail sales of goods and services that are critical for the protection of human health, safety or for household expenses.
  • According to the draft, using prices or margins above the ceiling will be punishable by fines in a range from PLN 5,000 to PLN 5,000,000.
  • Additionally, the UOKiK is to be authorized to impose penalties of up to 10% of the turnover in the preceding financial year on entrepreneurs who repeatedly infringe price and margin ceilings, do so with respect to various goods or services, or infringe them on a large scale.
  • Penalties for procedural infringements, such as refusing to provide the information requested by the UOKiK President, frustrating or hindering inspections, may amount up to 5% of the annual turnover but no more than PLN 50,000,000.
• UOKiK also proposed a temporary reduction in the maximum level of non-interest costs on consumer loans; the amount of non-interest costs should not exceed 5% on loans with maturity of less than 30 days and 15% plus 6% for each year of the term for loans with maturity of more than 30 days.
• The current draft does not include the working proposal made earlier by UOKiK that consumers should be permitted to suspend the performance of a consumer loan or mortgage loan, which would release consumers from the obligation to make payments under such loans, and no interest or other fees would be charged in respect of the suspension period.

Regulations concerning all lease agreements – effective until 30 June 2020

• Extension of lease agreements concluded for a fixed period, which would expire after the shield enters into force,
• Prohibition to terminate tenant’s lease agreements or to increase the rent.

Leasing of property from public resources

Lease of premises owned by the State Treasury or local government units include, among others:

• a simplified procedure for cancelling or deferring rents, or enabling their payment in instalments,
• a simplified procedure for individual withdrawal of rent claims,
• the possibility for local government bodies (e.g. municipal councils) to adopt resolutions on the general grant of allowances, debt cancellation and waiver of debt recovery.

Additionally, the newly adopted Ani-Crisis Shield stipulated:

• Industrial Development Agency (ARP) will obtain from the Polish government up to PLN 1.7 billion through transfer of newly issued treasury securities
• The funds obtained by Industrial Development Agency will be primarily used to create a mechanism for refinancing lease contracts concluded by entrepreneurs, dedicated primarily to the transport sector and liquidity loans enabling support for the day-to-day operations of the companies with a 15-month grace period.
• Availability of loans for micro-enterprises that do not employ employees. To submit for the loan relief, the micro-company will have to operate for 3 months from the date of the loan. The estimated total value of loans available will amount to approximately PLN 9.6 billion of which up to PLN 8.7 billion may be forgiven.
• Reliefs in the repayment of the loans granted by BGK under the loan program „First Business - Startup Support”, including:
  • suspension of repayment of principal and interest installments for a period not longer than 6 months,
  • extension of the grace period by an additional period of up to 6 months,
  • extension of the repayment period by an additional period of up to 12 months,
  • reducing the interest rate on loans to 0% per annum for a period not exceeding 12 months.
• The option of renegotiating the terms of the bank loans by all entrepreneurs, regardless of their size
• Funds received by entrepreneurs in relations to preventing COVID-19 will be secured against enforcement (under civil proceedings, court bailiff or administrative enforcement).
• Availability of government's grants will also be available to companies established between 1 February and 1 April this year.

On 19 June 2020, the Polish Sejm adopted the Anti-Crisis Shield 4.0 -  a new support program under the Anti-Crisis Shield

On 22 June, the act was signed by the President.

Below are selected changes adopted under Anti-Crises Shield 4.0 by the Sejm in respect of taxes, social security and other public charges:

• Time-constrained legal provisions against takeover to protect Polish companies against buyout by investors from outside of Europe and the OECD;
• Budgetary support for local governments;
• Facilitations with regards to tender procedures;
• Subsidisation of interest on bank credits for companies, granted from the State Treasury;
• Credit holidays for those who have lost employment or their main source of income after March 13th;
• Support for maintaining jobs by adjusting the work market to the challenges posed by COVID-19;
• Tax aids, including the right to write off donations granted to, among others, homes for single mothers, dormitories, shelters for the homeless or social welfare homes.

Anti-takeover laws

New regulations are adopted to protect Polish companies against hostile takeovers due to the worsened economic circumstances triggered by the COVID-19 epidemic which may translate into particularly low valuation of companies.

The new rules for controlling buyout of companies will remain binding for at least 2 years. Transactions involving the purchase of a large number of shares (i.e. at least 20%) in such companies will be inspected by the President of the Office of Competition and Consumer Protection. The protection will apply to businesses whose revenue on the territory of the Republic of Poland has exceeded EUR 10 million during either of the two fiscal years preceding the buyout.

The regulation covers the businesses which play a key role in maintaining public safety, order and health, such as, for instance:

• conducting business activity related to: electrical energy, gasses, fuels, telecommunications, food processing, pharmaceuticals, chemicals and fertilisers, explosives, weapons and ammunition as well as technological products indented for military or police use;
• developers of software used in basic social services, such as: energy, fuels, water supply, cash supply, card payments, hospitals, prescription drug sales, transport and food supply;
• public companies.

In addition, the regulation introduces the groundwork for exchanging information on international investments between the EU Member States and the European Commission through a contact point.

Budgetary support for local governments

Security measures for local governments include the following solutions, among others:

• Between June and December of 2020, doubling of the share of districts, including mayoral cities, in the income generated though the management of State Treasury's real estate. Now, they will receive every second zloty instead of every fourth zloty.
• Introducing the possibility of including the factual decrease in tax income (from PIT, CIT, local taxes in 2020: property tax, farming tax, forestry tax, transportation tax, stamp duty, tax on civil law transactions, healthcare and local tax) in the imbalance in the current budget of the local government units as a result of COVID-19.
• In 2020, relieving the fiscal rule limiting the extent of debt by the amount of factual decrease in tax income (catalogue of taxes as indicated above), due to the COVID-19 epidemic.
• Introducing the possibility to postpone the payments made by the local government units with above-average tax income to the State Treasury. The instalments of the tax paid on the basis of the Act of 13 November 2003 on income of local governments for June and July of 2020 may be paid by the cities in equal portions between August until December of 2020. For instance, the total amount of two instalments of the tax due by the city of Wroclaw (tax due for June and July), i.e. PLN 15,514,367.00, or Warsaw (tax due for June and July), i.e. PLN 201,463,392.67, may be paid in equal portions between August and December of 2020.
• Increasing the flexibility of utilising the funds from the tax on alcoholic beverages in 2020. The financial assets under the fund may be allocated towards counteracting and limiting the consequences of COVID-19.
• In 2020, introducing the possibility of earlier payments of the instalments for education, levy, countervailing and regional parts of the general subvention, which will improve the liquidity of local governments. Under the general subvention, the cities will receive the following funds, for instance: Cracow: PLN 80,153,038.87, Gdynia: PLN 21,926,365.56, and Komorniki: PLN 2,435,789.77

Facilitations with regards to tender procedures

Polish government allowed for an easier implementation of tender procedures during the COVID-19 epidemic to improve the situation of public procurement contractors.

New regulations allow to decrease the costs related to the participation of contractors in tender procedures, and to improve their financial liquidity at the stage of executing a public contract.

The following measures were introduced in order to assist in achieving that purpose:

• Abolishing the duty to request an obligatory guarantee in the case of tenders of an estimated value exceeding the EU limits.
• Introducing an obligation to pay the remuneration in parts or to issue advance payments in the case of public contracts concluded for a longer duration.
• Reducing the permitted amount of performance guarantee.
• Limiting the possibility to deduct contractual penalties from contractor's remuneration or other liabilities, and the possibility for the orderers to satisfy their claims from the performance guarantee.
• Supplementing the regulations providing for the possibility to make amendments to the contracts in response to the events caused by the COVID-19 pandemic. In the event where COVID-19 had a negative impact on correct execution of the agreement, both parties shall be obliged to introduce amendments to the public contract.

Nearly PLN 0.6 billion from the State Treasury for interest subsidies

Polish government will make it possible for all business owners who suffered from the effects of COVID-19 to receive credit with interest lowered by government subsidies. This solution is introduced in response to the increased demand for working capital credits, resulting from the risk of losing financial liquidity by companies. The total amount allocated to the subsidies amounts to PLN 565 million, which according to the estimates - shall enable to generate credits in the total amount of PLN 32 billion.

• Banks will grant credits to entrepreneurs who have experienced the negative impact of COVID-19; the interest on the credits will be subsidised by BGK from the State Treasury. In the current year, the total amount allocated from the State Treasury for that purpose will amount to PLN 296 billion, while in the next year - over PLN 271 million.
• These credits will be provided by banks which will enter into an agreement with Bank Gospodarstwa Krajowego. BGK will publish the list of the banks on its website. In order to execute the Act, BGK will establish an Interest Subsidy Fund.
• The recipients include entrepreneurs as well as entities running activity in primary agricultural production.
• These credits will be available to businesses regardless of their size; however the size of a business will dictate the total amount of support:
  • a) an entrepreneur from the SME sector will receive a subsidy constituting a portion of the interest due to the bank corresponding to 2 percentage points
  • b) others - in the total amount of 1 percentage point.

The maximum aid for an entrepreneur granted under this instrument, i.e. the subsidy to be obtained, shall not exceed the equivalent of EUR 800 thousand expressed in PLN. The credit contracts may be signed until 31 December 2020.

The subsidies will be paid out for a period of up to 12 months after concluding the subsidised credit agreement.

Credit holidays

New regulations are giving the right to suspend credit payments for a total period of 3 months, without accruing interest or other fees. The new regulations will cover individuals who have lost their employment or their main source of income after 13 March 2020.

The mechanism included in the Act provides for the following possibilities:

• Suspension of the need to pay off consumer loans, mortgages as well as credits as defined in Article 69 of the Act of 29 August 1997 - Banking Law, both with regards to the principal amount and the interest. During that period, the lender will be prohibited from taking any other payments, except for the insurance premiums for insurance contracts related to the credit agreement.
• The agreement may be suspended for a maximum of 3 months. The crediting period, as well as all the periods provided for in the credit agreement shall be extended by the suspension period.
• In the event that a borrower has several loans of the same type (i.e. two credits indexed to CHF) granted by a single lender, the borrower shall have the right to receive subsidy to only one of the loans.
• The suspension of the credit agreement will be provided to the consumers who have lost their employment or their main source of income after 13 March.
• The solution presented in the Act will pertain to credit agreements concluded before 13 March 2020, if the end of the crediting period defined in the agreements falls after 6 months following 13 March 2020.

Special purpose Act on support for businesses affected by COVID-19 epidemic

One of the primary objectives of the Special purpose Act on support for companies due to COVID-19 epidemic relates to employment protection. The key measures implemented by the State in this respect enters into force from 1 April 2020 and comprise inter alia:

• Subsidies for employee remuneration costs and social security contributions for the enterprises in the event of a decline in sales revenues due to COVID-19 epidemic. The enterprise will be eligible for subsidy if the decline in sales revenues will amount to:
  • not less than 15% - calculated as the ratio of total sales revenues in the following two months period after Jan 2020, to the total sales revenues from the corresponding 2 months of the previous year (i.e. 2019); or
  • not less than 25% - calculated as the ratio of total sales revenues in any given month in the period after Jan 2020 compared to the turnover from the previous month.
• The subsidy may be granted due to:
  • economic downtime (i.e. when an employee does not work for reasons not related to the employee). The employer will receive a subsidy in the amount of 50% of minimum wage plus social security contributions up to three months period and will be obliged to pay a 50% of base remuneration to given employee (however not less than 100% minimum wage),
  • reduction of employee's working time by 20%, but not more than to half time. The salary of such an employee may be subsidized up to half of the salary, but no more than 40% of the average monthly salary from the previous quarter plus social security contributions up to three month period. The remuneration paid after the working time reduction may not be lower than the minimum wage.
• Additional subsidies for employee remuneration costs and social security contributions for micro, small and medium-sized enterprises for up to 3 month period, in the event of a decline in total sales revenues in the following two months of 2020 compared to the total sales revenues from the corresponding 2 months of 2019, in the amount of:
  • 50% of minimum wage plus social security contributions per employee, if the decline in sales revenues amounted to 30%,
  • 70% of minimum wage plus social security contributions per employee, if the decline in sales revenues amounted to 50%,
  • 90% of minimum wage plus social security contributions per employee, if the decline in sales revenues amounted to 80%.

Applications for co-financing of salaries and insurance premiums of employees from the Guaranteed Employee Benefits Fund may be submitted up to 30 days from the date of recalling the state of epidemic threat or state of epidemic.

• Exemption from social security contributions for up to 3 months period for owners of micro-enterprises (employing up to 9 people) established before Feb 2020 and self-employed people with income below three times the average wage, registered before Feb 2020.
• Payment of a “work suspension benefit“ in the amount of approx. PLN 2,000 for employees working based on a civil law contracts and self-employed (if they were active before Feb 2020); in the case of self-employed persons, income in the month preceding the month of submitting the application for “work suspension benefit“ must fall by at least 15% compared to the previous month. The benefit is also granted to self-employed persons who suspended their activities after Jan 2020.

(In general the deadline passed, however there will be option to received an overpayment return beginning from 20 September 2020)

• The employer affected by COVID-19 epidemic will be able to reduce the employee's daily uninterrupted rest time from the current 11 hours to 8 hours (with an obligation to provide an employee with equivalent rest within 8 weeks), and to reduce the weekly rest period from 35 to 32 hours.

(Beginning from 20 September there will be options to receive an overpayment return)

On 8 April 2020, the Polish Sejm adopted an additional package of legislative laws related to Anti-Crisis Shield (so-called Shield 2.0) for which on 17 April 2020, Polish Sejm approved additional amendments proposed by the Polish Senate and the act entered into force on the next day.

The key changes related to employment issues comprised:

• Exemption of 50% from social security contributions for up to 3 months period for owners of enterprises employing from 10 to 49 people (previously granted to micro-enterprises only)
• Social cooperatives and sole proprietorship will be exempt from the social security contributions regardless of their number of employees or revenues, respectively
• Payment of a “work suspension benefit“ may be granted up to three times (previously one-off support). Next payments may be granted in the months following first payment, provided that financial situation of the beneficiary has not improved.

Anti-Crisis Shield 4.0 -

• Specifying the rules for remote work.
• Allowing the employer to send an employee on overdue leave during the pandemic even without the employee’s consent.
• Allowing to terminate non-compete agreements during the state of epidemic emergency or epidemic. Employers, principals, and orderers will receive the authority to unilaterally terminate non-compete agreements binding after the expiry of the legal relationship.
• Limiting - to the total amount of 10 Times - the minimum wage (therefore up to PLN 26,000), severance pays and damages in the event of cancelling employment, civil contract or other service agreement. This solution may be used only in companies which strongly experience the effects of the economic crisis caused by the coronavirus in the form of a decreased turnover (by at least 15% within 2 consecutive months, or by 25% in relation to a corresponding month in the previous year) or a substantially increased burden on the remuneration fund.
• During the COVID-19 epidemic, the possibility to suspend some of the obligations related to the Company Social Benefits Fund and other social funds in agreement with trade unions, in the event that the employer experiences a specific decreased turnover or a substantially increased burden on the remuneration fund. This solution shall be used only in the companies which strongly experience the effects of the economic crisis caused by the coronavirus in the form of decreased turnover (by at least 15% within 2 consecutive months, or by 25% in relation to a corresponding month in the previous year) or a substantially increased burden on the remuneration fund.
• Waiving the obligation to follow collective work agreements or remuneration regulations which specify pay deductions for the Company Social Benefits Fund in excess of the statutory amount or other social and living benefits during COVID-19, in the event that the employer experiences a specific decreased turnover or a substantially increased burden of the remuneration fund.
• One of the key proposals included in the Draft Shield 4.0 is the possibility to obtain a subsidy from GEBF without the need to cover employees with reduced working time or downtime (the period of non-performance of duties). In such cases, the co-financing will be granted up to the half of their remuneration, however not exceeding 40% of the total monthly remuneration. Nevertheless, the co-financing will not be granted for employees whose remuneration exceeds 300% of the average monthly remuneration.
• Allowing to decrease working hours or covering an employee with economic idle time in the event of a significant burden on the employer’s remuneration fund due to the COVID-19 epidemic. In the case of employees covered by economic idle time, the employer shall provide them with remuneration decreased by up to 50%, however, it shall not be lower than the minimum wage, considering the working hours. In turn, the employee’s working time may be decreased by a maximum of 20%, however not lower than 0.5 FTE, provided that the employee’s remuneration shall not be lower than the minimum wage considering the working hours prior to the decrease. That will be possible in companies which strongly suffer from the effects of the economic crisis caused by the coronavirus, due to a significant increase of the burden on the remuneration fund. In addition, the employer shall reach an agreement with the trade unions in order to have the right to introduce the idle time or decreased working hours.
  

The regulation pertains solely to the entrepreneurs whose employment costs exceed 30% of the revenue. Lowering working hours or covering an employee by economic idle time shall apply for up to 6 months. That means that such instruments may be used for up to 6 months after the entrepreneur’s revenue started to rise to the previous level. It is crucial to give entrepreneurs time to recover from the losses induced by the crisis while maintaining increased elasticity. However, that state shall not be imposed for longer than 12 months after the state of epidemic or of epidemic threat have been called off.

• Amendments related to the so-called idle time benefit. In the case of employees who conduct business activity and are covered by additional insurance from other sources (such as partial employment), the Act on social insurance scheme provides the right to voluntary insurance. Such persons shall not be excluded from receiving the idle time benefit. After the amendments are introduced, the self-employed persons who are simultaneously hired by another employer will have the right to receive the idle time benefit. Such entrepreneurs will have the right to file up to three individual applications to receive the benefit.

Customs audits

• Suspension ex officio or on request:
  • Tax proceedings or inspections;
  • Customs inspections.

Suspension may also be introduced by the Minister of Finance in a regulation specifying the territorial scope of suspension, types of proceedings and inspections as well as the period for which suspension occurs. The basis in this case will be the period of validity of the epidemic threat or epidemic status and the effects caused by them.

The suspension period is not included in the dates of proceedings and inspections.

Duty relief

• Exemption from customs duty and reduction of the VAT rate to 0% for delivery of:
  • Medical devices;
  • In-vitro diagnostic medical devices;
  • Laboratory glassware and laboratory apparatus;
  • Medicinal products and active substances;
  • Disinfectants;
  • Specialized diagnostic tests;
  • Personal protection equipment.
• If they are intended for purposes related to combating SARS-CoV-2 virus and donated to:
  • Material Reserves Agency;
  • Central Base of Sanitary and Anti-Epidemic Reserves;
  • Entities performing medical activities entered in the relevant list.
• It is also necessary to conclude a written agreement between the taxpayer and this entity, which will determine how the goods will be used
• The reduced tax rate may be used for the delivery of goods made in the period from 30 January until the date of revocation of the epidemic state announced in connection with SARS-CoV-2 virus infections in the territory of the Republic of Poland.

Export restrictions

• Exportation of personal protective equipment outside the European Union requires a permit. This applies to items such as:
  • safety glasses and helmets,
  • mouth and nose protection equipment,
  • protective clothing.
• Obligation to notify the Voivode no later than 36 hours before the intention to export or dispose outside the territory of the Republic of Poland of:
  • TYVEK suits,
  • masks type FFP2 / FFP3,
  • shoe covers (footwear)
• Obligation to notify the Main Pharmaceutical Inspector of the intention to export products included in the list of medicinal products, foodstuffs for particular nutritional uses and medical devices threatened by the lack of availability on the territory of the Republic of Poland.

Customs simplifications

• Possibility to use simplified declarations without prior authorization.
• Facilitation with regard to temporary admission of goods to counter the effects of SARS-CoV-2 virus.
• Possibility to extend the limit for re-exporting the goods under temporary admission.
• Possibility to extend the deadline for presenting the settlement of the special procedure.
• Simplification of the rules for using the short form of the application for authorization (application for authorization based on the customs declaration).
• Possibility of temporary storage of goods for longer than 90 days by obtaining a new permit for customs storage.
• Possibility to use a paper copy or electronic version of the certificates of origin.

Main sources of information

• Information on the activities of the customs authorities in relation to the COVID-19 epidemic
• Act of 31 March 2020 (PDF 1.4 MB)

• Recovery plan : National / Country Recovery Plan
• Budget : EUR 57 m
• Announcement : 1Q 2021
• Main orientations : Healthcare, Education, Digitazation of public services, Infrastructure and comunication, New technolgies, Ecology, Power engineering.

Key Measures

• On 21 July 2020, EU leaders agreed on a recovery plan (Recovery and Resilience Facility) and a Multiannual Financial Framework for 2021-2027. For the purpose of the EU Recovery and Resilience Facility, the Member States must prepare Country/National recovery plans.
• Under the Facility for Reconstruction and Increasing Resilience, Poland will have EUR 57 billion available for grants and loans.
• In the beginning of August, the Government launched a call for projects under the National/Country Recovery Plan.
• During this phase, the Government received 1,198 projects (till 24 September 2020).
• 18 September 2020 marks the beginning of the second phase of the Plan, during which, the Government will analyze and choose projects to enter the Plan.
• First draft of the Plan is to be submitted to EC by the end of the 2020.

Sectors/Industries/Areas affected

• So far, the details have not been revealed, however the Plan is to include 4 areas:
  • a resilient society (healthcare, education),
  • a resilient country (digitization of public services, infrastructure and communication),
  • resilient economy (skills, new technologies),
  • resilient environment (buildings, power engineering).
• Budget for the recovery plan should amount up to EUR 23.1 billion in the form of grants and EUR 34.2 billion in the form of loans.

Resilient society

• Activities in this area include digitization of processes in health care, investments in health infrastructure and equipment of facilities, training of medical staff and social care and piloting the operation of the National Oncological Network.
• The entire population of the country will benefit from the projects in this area.

Resilient country

• Activities in this area include amendment of procedures relating to investment and construction processes along with spatial development, merging and modifying databases to shorten and facilitate the time of accessing information and communication between offices, as well as between the office and the client or the citizen or entrepreneur. They also relate to construction and renovation of facilities that will improve the delivery of public services.
• The projects in this area will be used by citizens and residents of the country, entrepreneurs and offices - both at the national and local level.

Resilient economy

• Activities in this area include development of human resources for the green and digital economy, creating opportunities and conditions for the development and improvement of skills necessary to strengthen social capital, social inclusion, economic growth and achievement of a high quality of life, as well as actions related to ICT, low-carbon technologies and AI.
• The entire society, offices and entrepreneurs will benefit from the changes related to digitization and the development of new technologies. The digital economy will be more competitive, modern and open to the challenges that the future will bring.

Resilient environment

• Activities in this area include preparation of regulations for the development of new planning schemes, renovation and construction of buildings, support for thermal modernization of existing buildings, etc. They also include promotion and development of renewable and low-carbon energy sources, replacement of heating / energy sources in buildings and infrastructure investments, along with promotion of the circular economy.
• The results of the projects should include reduction of low-stack emission, CO2 emissions, reduction of energy poverty, improvement of the aquatic environment and protection and restoration of ecosystems and biodiversity. It will be important to increase the energy efficiency of individual sectors, as well as to promote and disseminate modern and environmentally friendly solutions. The projects will promote thermal modernization, renewable energy sources, and support the circular economy. They should also contribute to education and promotion of behavior conducive to the rational use of environmental resources.

Coronavirus – extraordinary changes in court proceedings and the system of justice

• The Ministry of Justice has issued recommendations restricting the activity of courts and announced introduction of extraordinary changes in the law regarding court proceedings, time limits defined by substantive law and the system of justice. The new solutions are a response to the coronavirus spread.

Announcement by the Ministry of Justice on emergency legislation for the system of justice of 19 March 2020.

The Ministry of Justice has presented assumptions for the draft amendments to the Act of 2 March 2020 on extraordinary measures for preventing, counteracting and combating COVID-19, other infectious diseases and emergencies caused by them. The draft amendments and the explanatory memorandum were submitted to the Ministry of Development, which coordinates works related to the amendment of the above-mentioned law.

Extraordinary changes in court proceedings and the system of justice – main assumptions

• Suspension of all limitation periods defined by substantive and procedural law

Non-commencement or suspension of limitation periods:

• Time limits provided for by the civil law, whose observance is necessary for the grant of legal protection in court
• Limitation periods for criminal offences and for execution of sentences for criminal offences, fiscal offences and petty offences, and in proceedings in petty offences cases
• Procedural and court time limits in court proceedings, including administrative court proceedings, enforcement proceedings, criminal proceedings, penal and fiscal proceedings, proceedings in petty offences cases, administrative and enforcement in administration cases, as well as time limits in other proceedings conducted under the act.
• Support for commercial companies and cooperatives further amendments are aimed at enabling the governing bodies of cooperatives, housing communities and commercial law companies whose members may be quarantined. The amendments introduce the possibility to vote in writing or by means of distance communication.
• Official list of urgent cases the amendment specifies in detail the type of cases which are considered urgent and in which, exceptionally, hearings may be held. These include cases involving minors, domestic violence or pre-trial detention
• Support for the courts under the amendment there is a possibility of delegating the performance of urgent tasks to another court and simplifying the procedures for delegating judges to another court.
• More penalties executable in electronic surveillance the draft also provides for amendments to the executive penal code, which significantly extends the use of the electronic surveillance system (ess). It is proposed to increase the upper limit of sentences or the amount of imprisonment, which determines the possibility of serving a prison sentence in the electronic surveillance system to 18 months (currently ESS is used for sentences of up to one-year imprisonment).

Announcement of the Ministry of Justice of 12 March 2020 on the operation of courts

• On 12 March 2020 the Ministry of Justice issued an announcement on the organisation of the work of courts: it is recommended that all hearings and public hearings scheduled from 13 to 31 March 2020 be postponed, except for the most urgent cases.
• Practical implementation of the recommendations is subject to a decision of the court president. According to publicly available information, the courts generally follow the Ministry’s recommendations: on websites of most courts it was announced that all hearings and public hearings, except for the most urgent cases, were cancelled. In many courts, the possibility to use the reading room of court files has also been limited and limitations have been introduced in the operation of the Customer Service Office and the administration office.
• Apart from the above limitations, courts operate without changes, thus, it is possible to file claims, exchange pleadings, etc. The change in the organization of courts’ work does not apply to proceedings in which no hearings are held, including registration and perpetual usufruct proceedings. Administrative proceedings also remain outside the scope of changes.

List of urgent cases

• The Ministry of Justice has provided the presidents of the courts with the so-called list of urgent cases, which are recommended to be tried in the emergency mode and excluded from the orders concerning the cancellation of hearings and meetings with the parties. These include, among others, cases related to the following:
  • Application and extension of provisional detention
  • Imposition of a protective measure in the form of a stay in a secure hospital
  • Applicability of the statute of limitations with reference to the punishability of the act or the execution of a sentence
  • Execution of a european arrest warrant
  • Hearing a person for the purpose of securing evidence, or in a situation where there is a threat that it will not be possible to hear a certain person at a trial.
• In commercial matters, in principle, all hearings are to be cancelled.
• The presidents of the courts may decide on other cases requiring urgent consideration.

What does cancellation of hearings mean in practice?

• The principle of open proceedings and the related obligation to conduct a hearing is one of the main principles of Polish procedural law. Most cases, including virtually all cases of greater importance, are obligatorily heard at a trial.
• The inability to hold hearings means that all civil, criminal and administrative cases in which the hearing is mandatory, i.e., the vast majority of cases, will be heard late. The court will be able to issue ordinances or orders in closed session in these cases, and the parties will be able to exchange pleadings, but it will not be possible to complete the proceedings – until the hearing is carried out and closed.
• According to public statements of the court presidents, hearings that are currently being cancelled will not be considered first in the future, but will be moved to the end of the queue – they will probably take place no sooner than a few months from the resumption of normal court work.

Other procedural effects brought about by the epidemic

• In the event where the above changes to the law announced by the Ministry of Justice on 19 March 2020 enter into force, all limitation periods and procedural dates will be suspended by virtue of law.
• In addition, there are arguments for considering that the state of epidemic emergency is a force majeure event, which entails the following effects:
  • Suspension of limitation period for claims due to force majeure
  • The limitation period for claims does not start and the commenced limitation period is suspended when, due to force majeure event (epidemic), the entitled person cannot enforce such claims in the court (article 121 sec. 4 of the civil code)
  • Permissibility of applying for reinstatement of the procedural time limit.
• If a party to court proceedings without its fault (e.g. due to illness, quarantine, inability to return to the country, limited functioning of the post office, etc.) did not complete the procedural activity within the time limit, they may apply for reinstatement of a missed deadline. The application for reinstatement of the deadline must be submitted within 7 days of the cessation of the obstacle that caused the default, and simultaneously a procedural activity must be carried out.
• The provisions of Shield 3.0 postponed the deadlines for proceedings from May 24 this year. Only the provisions which extended the deadline for issuing a binding ruling by at least 3 months were not changed.

Act on granting public aid to rescue or restructure entrepreneurs, commonly referred to as “New Chance Policy”

• On 11 August 2020, the Act on granting public aid to rescue or restructure entrepreneurs came into force.
• The aim of the act is to enable granting of state aid for rescuing and restructuring enterprises in difficulties in the form of financial support and reliefs in the execution of administrative fines.
• The aid will be provided in the form of three support programs:
  • Rescue aid - in the form of a returnable loan to enable business activity for the period necessary to develop a restructuring or liquidation plan. Rescue aid may be granted for a period not exceeding 6 months.
  • Temporary restructuring support - in the form of an interest-bearing loan limited to the amount necessary to continue operations in the period for which the support was granted, but not longer than 18 months. The aid is aimed at enabling the entrepreneur to run a business for the time necessary to implement restructuring measures. It is limited to SMEs, under the aid scheme approved by the European Commission.
  • Aid for restructuring - intended for entrepreneurs who would not be able to bear the restructuring on their own, but who developed a plan for it, including all activities aimed at restoring the entrepreneur's profitability. Restructuring aid is aimed at implementing this plan. Restructuring aid, contrary to the previous support means, may be granted in various forms, i.e. loans taking up stocks or shares in the increased share capital or participation in increasing the share capital by increasing the nominal value of the existing shares or stocks taking up bonds changes in deadlines for loan repayment to the entity granting the restructuring aid the conversion of a loan, granted as rescue aid, into shares or stocks of the entrepreneur. It should be emphasized, however, that restructuring aid may not be used to finance new investments, unless the new investment is necessary for the entrepreneur to regain long-term ability to compete on the market.
• the aid is returnable and cannot be discharged.
• PLN 120 million from the state budget will be allocated for support under the New Chance Policy for 10 years. Additionally, this pool will be supplied with funds from the Covid fund in the minimum amount of PLN 600 million.
• the call for applications started on 24 September 2020 and is still going on.

New strategy of the Polish Government

• On 16 September 2020, the Government announced a new strategy of tax and regulatory simplifications to help attract capital to Poland and support domestic business in development along with foreign expansion, presented under a working name of “Poland: the economic center of Europe”.
• The first pillar of the strategy are to be regulations for Poles who have assets or hidden income abroad. Such investors will be offered by the Polish Government a certain type of abolition, i.e. the Voluntary Disclosure Program. This solution allows an individual to return to the country with all their property without the risk that the tax office will initiate tax avoidance proceedings. The offer is valid for a certain period, e.g. a year. The condition is that the individual pays a levy and invests money in specific areas, such as innovation or research.
• Another element is the establishment of regulations for the creation of family foundations in Poland. Today, there is a legal loophole in this area, which prompts some companies to register such a private foundation abroad, even if the goal is not to avoid paying taxes in the country.
• The next initiative concerns a lump-sum tax on foreign earnings. The idea relies on the preparation of a simple tool for taxing foreign income of new tax residents. If the entrepreneur decides to transfer to Poland with the levy, they will pay a lump sum of PLN 300k or 100k on the income earned outside the country. In the latter case, the condition is to invest the tax equivalent in the desired social areas.
• The key element of the strategy is to introduce the status of a strategic investor into Polish law. A strategic investor will be able to count on the so-called VIP passport, i.e. a simplified path of administrative proceedings. A strategic investor may become an entity that will incur expenditures of at least PLN 1 billion or will carry out an investment that will result in at least 1,000 jobs or a project worth less than PLN 1 billion but involving over 3,000 employees in Poland (converted into full-time jobs).
• The strategy also provides for the already announced tax relief for robotization and the so-called Estonian CIT (under certain conditions the moment of taxation of the company's profits can be shifted to the moment they are distributed) or the relief on prototypes of products previously unknown on the market and those that stand out, for example, with above-average performance compared to those already available, and relief for debut on the stock exchange. These will be simple, clear and standardized rules for tax deductions for IPO costs (court, notary, stock exchange and other fees) up to 125%. costs incurred.
• The details will be revealed at the turn of September and October 2020.

Anti-Crisis shield for tourism industry

• On 22 September 2020, the President signed the bill commonly referred to as the Anti-Crisis shield for tourism industry or Anti-Crisis Shield 5.0. The provisions of the bill will come into force on 15 October 2020.
• The act introduces three forms of support provided by ZUS to representatives of the tourism, stage arts and exhibition industries:
• a) Downtime benefit -The right to the downtime  benefit was granted to entrepreneurs who mainly operate as tourist agents (if they experienced a downtime in conducting business activities as a result of COVID-19 and they are not subject to social insurance for any other reason, unless they are subject to retirement and disability pension insurance for non-agricultural business activity) and tourist guides (if they experienced a downtime in conducting business activities as a result of COVID-19, suspended non-agricultural business activities after 31 August 2019, provided that the activity is seasonal and in 2019 it was performed for a period not longer than 9 months). The downtime benefit is due in the amount of 80% of the minimum remuneration for work determined on the basis of the provisions on the minimum remuneration for work in force in 2020 and can be granted no more than three times. If the benefit has already been paid out three times, an entity cannot apply for it anymore.
• b) additional downtime benefit may be granted to entrepreneurs for which the predominant type of business activity is:
  • 1) tourist transport,
  • 2) staging and performing in theater, opera, ballet and circus performances,
  • 3) running escape rooms, houses of fear, discos, electronic games salons, beaches, fairs,

if they obtained income from this activity in the calendar month preceding the month of submitting the application, lower by at least 75% compared to the income obtained in the same calendar month in 2019 and have previously used a downtime benefit (received at least one benefit).

The additional downtime  benefit is due in the same amount as the previously paid benefit and can be granted no more than three times.

• c) exemption from paying contributions for July, August and September 2020 - It will be available to payers from the tourism and hotel sector, as well as the organization and service of fairs, conferences and exhibitions (based on the code of the predominant activity of the entrepreneur according to the Polish Classification of Activities (PKD) 2007) if they:
  • were registered as contribution payers before 30 June 2020.
  • the income from this activity within the meaning of tax regulations, obtained in the first calendar month for which the application for exemption from paying contributions is submitted, was at least 75% lower than the income earned in the same calendar month in 2019.
  • settlement declarations and personal monthly reports will be submitted for the months indicated in the application by 31 October this year at the latest,
  • the application for exemption from paying due contributions will be submitted no later than 30 November this year.

Main sources of information

• Poland: Tax relief in response to coronavirus (COVID-19)
• The Chancellery of the Prime Minister
• Government of Poland
• Journal of Laws of the Republic of Poland
• The Polish Development Fund Group
• Government of Poland
• The Chancellery of the Prime Minister
• Government of Poland
• The bill adopted by the lower chamber of the Polish parliament on March 28, 2020
• Regulation of the Minister of Finance of March 25, 2020
• Information about public aid to rescue or restructure entrepreneurs
  • The New Chance Policy
  • https://twitter.com/AgencjaRozwoju/status/1309120410877939731
• Information about ant-crisis shield for tourism industry

Measures to ease the lockdown

• Schools and universities in Poland are closed. Lessons and classes are not held on the premises, but via the Internet using e-learning platforms. Remote lessons are carried out according to the specified rules until May 24, 2020 For stores with a service area of less than 2000 m2: 4 people for one cash desk. So, if there are 2 cash desks in a store, there can be 8 customers in the store at once. For stores with a service area larger than 2000 m2: 1 person per 15 m2 of the area. Valid: from 20 April until rescinded.

Main sources of information

• The bill adopted by the lower chamber of the Polish parliament on March 28, 2020
• Regulation of the Minister of Finance of March 25, 2020

Tax: Katarzyna Nosal-Gorzen – knosal@kpmg.pl / Legal: Dariusz Dobkowski – ddobkowski@kpmg.pl
Restructuring: Alina Woloszyn – awoloszyn@kpmg.pl
Transaction Services: Jacek Kulpinski – jkulpinski@kpmg.pl