Legislation and practice – August in taxes and business law

We present below a short summary of the most important changes in tax/business law and practice in August.

Legislation

• The announcement of the Minister of Finance of 21 July 2023 on the upper limits of the quota rates of local taxes for 2024 was published in the “Polish Monitor” (item 774).
• An amendment to the VAT Act was published in the “Journal of Laws” (item 1598) – introduction of an obligatory e-invoicing (Pol. KSeF).
• The Act amending the Commercial Companies Code was published in the “Journal of Laws” (item 1705) – cross-border transformations of companies.
• The Decree amending the Decree on the use of the National System of e-Invoices was published in the “Journal of Laws” (item 1760) – issues of granting rights to the KSeF.
• The President signed the Act amending CIT and PIT Acts – the possibility of shortening the depreciation period of buildings and residential structures by taxpayers from the SME sector up to 5/10 years, depending on the level of unemployment in a given county (Pol. powiat).

Tax practice

Income taxes and transfer pricing

• The costs of accommodation of staff delegated abroad do not create income in PIT – judgments of the Supreme Administrative Court of 1 August 2023, file reference number II FSK 243/21, II FSK 270/21, II FSK 1246/21.
• Settlement under the “IP Box” regime is not applicable to all income from the sale of a product manufactured on the basis of a qualified right, but only to income from a qualified right, which is included in the sale price of the product – judgment of the Supreme Administrative Court of 2 August 2023, file reference number II FSK 175/21.
• Remuneration of staff for the time of leave or sick leave may constitute an eligible cost in the B+R relief – judgment of the Supreme Administrative Court of 3 August 2023, file reference number II FSK 185/21.
• “Property” agreements with influencers are barter agreements, creating income for the person ordering income in CIT, and the influencer’s benefit may be a tax cost – judgment of the District Administrative Court in Rzeszów of 3 August 2023, file reference number I SA/Rz 240/23.
• Income from own receivables under the factoring agreement should be reported in net value (i.e. excluding VAT). The tax cost should be determined in a similar amount (judgment of the Supreme Administrative Court of 8 August 2023, file reference number II FSK 211/21).
• The tax base for the so-called commercial real estate tax is not reduced by the amount of depreciation write-offs made – judgments of the Supreme Administrative Court of 9 August 2023, file reference number II FSK 213/21 and II FSK 214/21. This is another such position of the NSA in this regard.
• The general anti-avoidance clause (GAAR) may be applied to events before its entry into force, if the tax advantage arises already during the GAAR period – judgments of the Supreme Administrative Court of 22 August 2023 (file reference number III FSK 489-495/23).
• Submission of a notification on the choice of “Estonian” CIT taxation may be effectively made during the tax year only if the accounting books have been closed and if the financial statements have been previously prepared – judgment of the District Administrative Court in Warsaw of 29 August 2023, file reference number III SA/Wa 1335/23.

VAT

• The Ministry of Finance has released an updated API version of the National e-Invoicing System (KSeF) of the test environment, which supports the FA(1) and FA(2) logical structures: https://www.gov.pl/web/kas/api-ksef-dla-srodowiska-testowego-przystosowane-do-struktur-fa1-i-fa2.
• The Ministry of Finance informed that on 1 September 2023, the second version of the e-Invoice structure will come into force, which will remain unchanged until the implementation of the target solution.
• The organization of integration events in the scope also covering persons other than employees (such as members of their families) gives the right to deduct input VAT – judgments of the District Administrative Court in Wroclaw of 3 August 2023, file reference number I SA/Wr 154/23 and I SA/Wr 202/23.
• The contractor’s payment due to the lack of receipt of goods is not subject to VAT – individual interpretation of the Director of the National Tax Information of 11 August 2023, file reference number 0113-KDIPT1-2.4012.422.2023.1.JS.

Other

• The European Commission has adopted the first set of European Sustainability Reporting Standards. They will apply to sustainability reporting as early as 2024. It is the first set of 12 universal standards, consisting of: 2 cross-cutting standards and 10 thematic standards comprising 5 standards on environmental issues, 4 standards on social issues and 1 standard on management issues.
• The European Commission also adopted, on 17 August 2023, an implementing regulation to the CBAM mechanism – the manner of compliance by importers with obligations from 1 October this year (transitional period).
• Persons practising a profession related to professional secrecy (e.g. lawyers, legal advisors or tax advisors) are to be exempt from the need to report tax schemes – although they should instruct their clients in this respect. Such changes in EU law (directive) are announced by the European Commission.
• Naturally occurring sugars in beverages are not subject to the “sugar” levy – judgment of the Supreme Administrative Court of 23 August 2023 (professional secrecy III FSK 189/23). This is another such judgment in this regard.
• The government proposes to introduce a statutory regulation on franchising. Appropriate changes would be made to the Civil Code.