Legislation and Practice – February in taxes and business law

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

Legislation

• The Act amending the Act on Tax on Goods and Services, the Act on Excise Duty and Certain Other Acts has been published in the “Journal of Laws” (item 222) – including the extension of the reverse charge mechanism with respect to gas or energy, as well as changes in the application of rates on certain goods.
• The Act amending the Excise Duty Act, the Public Health Act and certain other acts – including taxation of nicotine pouches and other nicotine products – has been sent to the President’s desk.
• The Act amending the Act on the Capacity Market and Certain Other Acts has been sent to the President’s desk – the deadline for small and medium-sized enterprises to submit forms on the granted de minimis aid has been extended from 28 February to 30 June 2025.
• The assumptions for the draft act amending the Tax Ordinance – including changes to the MDR and the statute of limitations on tax liabilities – have been published on the website of the Government Legislation Centre.
• The Sejm passed the Act amending the Tax Ordinance Act and certain other acts, including interest on overpayments after the CJEU/Constitutional Tribunal ruling from the date of the overpayment.
• The Act amending the Act on Counteracting Support for Aggression against Ukraine and Protecting National Security, the Act on the National Tax Administration and the Act on Counteracting Money Laundering and Terrorist Financing has been published in the “Journal of Laws” (item 172) – amendments to the “sanctions” Act.
• The Announcement of the Minister of Finance on the list of jurisdictions that have implemented the qualified principle of inclusion of income in taxation or qualified national equalization tax or meet the safe harbor requirements for qualified domestic equalization tax has been published in the “Polish Monitor” – it is worth mentioning that it is legally binding (e.g. the OECD list does not have such a value).

Practice in taxes

Income taxes and transfer pricing

• Partial reduction of the contribution in a limited partnership (pol. spółka komandytowa) is not taxable with PIT – judgment of the Supreme Administrative Court of 7 February 2025 (file reference number II FSK 592/22).
• British VAT should be treated in the same way as Polish VAT on the basis of CIT – judgment of the Supreme Administrative Court of 7 February 2024, file reference number II FSK 626/22.
• The distribution by a capital company formed as a result of the transformation of a sole proprietorship of profits earned before the transformation is not subject to (re)PIT taxation – judgment of the Supreme Administrative Court of 7 February 2025, file reference number II FSK 612/22.
• The issuance of shares as a dividend constitutes income from the capital source in CIT for the issuing company – judgment of the Supreme Administrative Court of 11 February 2025 (file file reference number II FSK 627/22).
• The free-of-charge establishment of a transmission easement does not create income from free of charge benefits to the entity to which it was granted – judgment of the District Administrative Court in Lodz of 13 February 2024, file reference number I SA/Łd 816/24.
• The method of settling foreign exchange differences in CIT can be changed retroactively (as part of the correction of the return) – judgment of the Supreme Administrative Court of 18 February 2025 (file reference number II FSK 878/23).
• Providing accommodation to contractors free of charge gives the right to deduct input tax – judgment of the District Administrative Court in Gdansk of 19 February 2025 (file reference number I SA/Gd 880/24).
• A contract of mandate, combined with the transfer of copyrights and the settlement of 50% of tax costs, does not give the right to settle the relief “for the young” – judgment of the Supreme Administrative Court of 26 February 2025 (file reference number II FSK 740/22).

VAT

• The Supreme Administrative Court asked the CJEU whether the donation of shares in an enterprise subsequently contributed to a partnership is subject to VAT exclusion as a sale of an enterprise (decision of 6 February 2025, file reference number I FSK 1641/21).
• The possibility of applying the exemption under Article 43 sec. 1 point 2 of the Polish VAT Act depends on whether the lack of deduction at the time of purchase is the result of the lack of VAT taxation of this transaction – judgment of the Supreme Administrative Court of 7 February 2025, file reference number I FSK 1566/21.
• Mutual settlements within a consortium are not taxed with VAT – change of the advance tax ruling of the Director of the National Tax Information of 10 February 2025, file reference number DOP7.8101.98.2024.AWCH.

International Taxes

• Employment of remote workers in Poland does not create a permanent establishment (PE) – judgment of the Supreme Administrative Court of 19 February 2025 (file reference number II FSK 609/22).

Other

• The Supreme Administrative Court has referred a question to the CJEU for a preliminary ruling on the treatment of a general partnership as a capital company within the meaning of the EU Directive 2008/7 – for the purposes of the tax on civil law transactions (on transformation; decision of 3 February 2025, file reference number III FSK 1234/22).
• Article 3(5) of Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions must be interpreted as meaning that the expression ‘otherwise expressly agreed in the contract’ precludes a contractual term setting a payment period of more than 60 calendar days from being fixed unilaterally by the debtor,  unless it can be established, taking into account all the contractual documents and conditions contained in this agreement, that the parties to this agreement have agreed to be bound by a specific condition – judgment of the Court of Justice of the EU of 6 February 2025, file reference number C-677/22.
• An extended panel of the Supreme Administrative Court will rule on the excise tax exemption for renewable energy – decision of the Supreme Administrative Court of 7 February 2025, file reference number I FSK 1519/21.
• On 26 February this year, the European Commission proposed a number of changes aimed at simplifying regulations, increasing competitiveness and unlocking additional investment opportunities. These changes concern, in particular, changes in the area of sustainability reporting (CSRD and EU taxonomy).
• As part of the proceedings regarding the liability of third parties for tax arrears, a member of the company’s management board should have the right to effectively challenge the findings of the tax authorities against the company, as well as have proper access to the files – judgment of the Court of Justice of the European Union (in a Polish case) of 27 February 2025, file reference number C-277/24.