Legislation and practice – January in taxes

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

Legislation

• The Decree on the exclusion of the obligation to collect flat-rate corporate income tax (item 2852) was published in the “Journal of Laws” – an updated catalogue, especially with regard to the so-called technical payers.
• The new Decree on public aid granted to certain entrepreneurs for the implementation of new investments (item 2861) was published in the “Journal of Laws” – modified regulations on the rules of support.
• The Decree amending the Decree on the conditions for determining and the method of reimbursement of the costs of using passenger cars, motorcycles and mopeds not owned by the employer for business purposes (item 5) was published in the “Journal of Laws” – increasing the rates of the “mileage allowance”.
• The Council of Ministers adopted draft acts ratifying the double tax treaty with Brazil.
• The Council of Ministers adopted draft act amending the VAT Act (the so-called “SLIM VAT 3” package).
• The President signed the act amending the Labor Code – i.a. regulating the issue of remote work. Regulations on remote work are to come into force 2 months after the publication of the amending act in the “Journal of Laws”. We wrote about the changes: HERE.
• The Sejm reviewed the Senate’s amendments to the Family Foundation Act. The act was submitted to the President for signature.

Tax practice

Income taxes and transfer prices

• It is the taxpayer, not the tax authority, who is obliged to reconstruct the destroyed documentation regarding tax costs (Judgement of the Supreme Administrative Court of 17^th January 2023, file reference number II FSK 1281/20).
• The so-called relief for increasing sales can only be used by entities that actually manufacture products. It cannot be used by taxpayers who commission this process to subcontractors (judgment of the District Administrative Court in Bialystok of 18^th January 2023, file reference number I SA/Bk 497/22).
• The DAC in Poznan, in its judgment of 11^th January 2023, ruled that transfer pricing regulations also apply to taxpayers who settle in the form of the “Estonian” CIT.
• The remuneration for the redemption of shares may be treated as a hidden profit in the “Estonian” CIT, unless the redemption concerns profits earned before choosing this form of taxation (individual interpretation of the Director of National Tax Information of 5^th January 2023, reference number 0114-KDIP2-2.4010.10.2022. 1.IN).
• Securities owned by an individual fall within the scope of the so-called exit tax (“exit tax”) – individual interpretation of the Director of National Tax Information of 3^rd January 2023 (reference number 0115-KDIT1.4011.697.2022.1.MR).
• The operating costs of passenger cars are also limited when they are settled by means of depreciation (Judgement of the Supreme Administrative Court of 24^th January 2023, file reference number II FSK 1450/20).
• Recovery of part of the liquidated fixed assets does not generate income from free of charge benefits (Judgement of the Supreme Administrative Court of 20^th January 2023, file reference number II FSK 1510/20).
• The university is not exempt from tax on income from buildings (Judgement of the Supreme Administrative Court of 19^th January 2023, file reference number II FSK 1393/20).

VAT

• The sole shortage protocol is not enough to prove the lack of guilt and to maintain the right to deduct VAT – judgment of the Supreme Administrative Court of 10^th January 2023, file reference number I FSK 1615/18.
• The Ministry of Finance does not provide for a reduction of the VAT rate to 5% for the catering and hotel industry (response to parliamentary question No. 38224 of 25^th January 2023, reference number PT1.054.1.2023).

Other

• Companies-members of a tax capital group may ask the Director of National Tax Information about their previous tax interpretations – judgment of the Supreme Administrative Court of 11^th January 2023, file reference number II FSK 1241/22.
• The tax base of the ICA in excise tax on cars may be subject to adjustment for subsequent discounts – judgment of the Supreme Administrative Court of 12^th January 2023, file reference number I GSK 442/19.
• The Supreme Administrative Court once again ruled on the possibility of issuing individual interpretations on MDR (judgments of 11^th January 2023, file reference number II FSK 1236/22 and II FSK 1238/22).
• From 2^nd January 2023, new services were made available on the PUESC (Platform of Tax and Customs Electronic Services) – e.g. electronic submission of applications for the issuance, change or withdrawal of excise tax permits (such as running a tax warehouse or purchasing excise goods as a registered consignee.
• From 17^th January 2023, the new mileage allowance rates for 1 kilometer of vehicle mileage are as follows: for a passenger car with an engine capacity of up to 900 cm3 – PLN 0.89, and for a passenger car with a cylinder capacity of more than 900 cm3 – PLN 1.15. The new rate for a motorcycle is PLN 0.69, and for a moped – PLN 0.42.
• The Council of Ministers adopted a draft amendment to the Labor Code – implementation of the directives on “work-life balance” and on transparent and predictable working conditions. The amendment includes i.a. important changes regarding holidays.