Legislation and practice – February in taxes

We present below a short summary of the most important changes in tax law and tax practice in February:

Legislation

• A draft act on state aid in saving for housing purposes was published on the website of the Government Legislation Center. It provides for some support instruments for natural persons, such as a savings bonus, income from interest on a dedicated account, or a loan subsidy.
• A draft act amending the Act on the exchange of tax information with other countries and some other acts was published on the website of the Government Legislation Center – implementation (of directive) DAC7 (reporting obligations of digital platform operators).
• The Council of Ministers adopted draft act amending the Polish VAT Act and the Act on National Tax Administration – implementation of EU regulations, an element of the package for combating VAT fraud in the area of e-commerce.
• A draft of Decree on extending the deadlines for performing certain obligations in the field of corporate income tax was published on the website of the Government Legislation Center – extending the deadline for submitting the CIT return and settlement for 2022.
• A modified draft act amending the Polish VAT Act (the introduction of the mandatory electronic invoicing – Pol. KSeF) was published on the website of the Government Legislation Center. The changes result from public consultations and include, among others disabling B2C invoices from the mandatory KSeF.
• The Act on the Family Foundation was published in the “Journal of Laws” (item 326) – the introduction of the institution of the Family Foundation.

Tax practice

Income taxes and transfer prices

• Conclusion of the so-called civil law silent partnership does not exclude the possibility of using the “Estonian” CIT (individual interpretation of the Director of the National Tax Information of 1^st February 2023, file reference number 0111-KDIB1-1.4010.806.2022.1.SG).
• Amicable payment for premature termination of the employment contract is a tax-deductible cost – judgment of the Supreme Administrative Court of 14^th February 2023, file reference number II FSK 1697/20.
• The costs of purchasing shares may constitute “operating costs” (not costs from capital gains) – judgment of the Supreme Administrative Court of 14^th February 2023, file reference number II FSK 1969/20.
• income from a free benefit related to a free guarantee, arises once at the date of the contract (individual interpretation of the Director of the National Tax Information of 8^th February 2023, file reference number 0111-KDIB1-1.4010.828.2022.1.AW).
• The provisions on the taxation of PIT of the joint undertaking are in accordance with the Constitution of the Republic of Poland – judgment of the Constitutional Tribunal of 15^th February 2023, file reference number SK 71/201/20.
• For the purposes of applying the relief on innovative employees, the CIT/PIT taxpayer and PIT remitter must be the same entity – the response of the Minister of Finance to the parliamentary question of 15^th February 2023 (file reference number DD8.054.1.2023).
• The costs of organizing sports classes for employees may be tax-deductible costs in CIT (individual interpretation of the Director of the National Tax Information of 14^th February 2023, file reference number 0111-KDIB1-2.4010.844.2022.1.EJ).
• Payment under a court settlement with partial liability for defectiveness is tax non-deductible – judgment of the Supreme Administrative Court of 22^nd February 2023, file reference number II FSK 1901/20.
• It is possible to use the so-called 50% tax deductible costs also when the remuneration is flat-rate, regardless of the number of works performed – the judgment of the Supreme Administrative Court of 22^nd February 2023, file reference number II FSK 1890/20.
• The costs of purchasing CO₂ emissions to cover own production are direct tax costs – individual interpretation of the Director of the National Tax Information of 20^th February 2023 file reference number 0111-KDIB1-3.4010.860.2022.2.JKU.
• The requirement to determine the “historical” tax costs in the field of selling the company’s shares (which arose from the transformation of a partnership) has only been in force from 2022 (judgment of the District Administrative Court in Gdansk of 14^th February 2022, file reference number I SA/Gd 955/22).

VAT

• In the event of opting out of the exemption and opting for VAT on financial services, the tax obligation arises on general terms, not on a cash basis – judgment of the District Administrative Court in Warsaw of 10th February 2022, file ref. number III SA/Wa 2455/22.
• The Supreme Administrative Court presented a panel of 7 judges with the question whether applying the security in the proceedings on the imposition of the so-called VAT sanctions, it is necessary to substantiate the taxpayer’s conscious participation in VAT fraud.

International taxes

• The Supreme Administrative Court ruled that the remitter paying a dividend to a foreign (EU) shareholder – for the purpose of applying the “withholding tax” exemption – must verify whether one is the beneficial owner of the dividend (Judgment of the Supreme Administrative Court of 1^st February 2023, file reference number II FSK 1588/20).
• Insurance services are not subject to WHT – judgment of the District Administrative Court in Poznan of 10^th  February 2022, file ref. number I SA/Po 580/22.

Other

• Division by separation of a company, motivated by the organization of the business and property structure, does not constitute tax avoidance – securing opinion of the Head of National Fiscal Administration of 10^th February 2023, file reference number DKP2.8082.8.2022.
• The Sejm passed an act amending the Labor Code – implementing the “work-life balance” directives and on transparent and predictable working conditions. The amendment includes i.a. important changes regarding holidays.
• Remote work and employee sobriety control – the act amending the Labor Code was published in the “Journal of Laws” (item 240).