We present below a short summary of the most important changes in tax/business law and practice in March.
Legislation
- The Decree amending the Decree on reduced rates of tax on goods and services was published in the “Journal of Laws” (item 387) – introduction of an 8% rate for cosmetic services.
- The Sejm passed Act amending the Accounting Act and certain other acts – the obligation to publicly disclose the income tax report by country. The document was sent to the Senate.
- The Council of Ministers has adopted a draft act amending the Act on the Social Insurance System and certain other acts – the so-called “contribution holidays”.
- The assumptions for the act amending the Tax Ordinance Act and the Act on Liability for Breach of Public Finance Discipline has been published on the website of the Government Legislation Centre – the rules of taxation of overpayments modified after the judgment of the Court of Justice of the European Union (CJEU).
Tax Practice
Income taxes and transfer pricing
- A change in the legal form of a company subject to the “Estonian” CIT does not lead to the loss of the right to apply this tax regime if the company still meets the requirements for its application after the transformation – individual interpretation of the Director of the National Tax Information of 8 March 2024, file reference number 0111-KDIB1-2.4010.45.2024.1.END.
- Expenses for team-building events in the field of co-workers (B2B) are not tax-deductible costs – judgment of the Supreme Administrative Court of 12 March 2024, file reference number II FSK 759/21.
- Undistributed profit generated by partners in a civil partnership and taxed with PIT, contributed to a limited liability company and separated on its capital, is not subject to re-taxation upon its distribution – judgment of the Supreme Administrative Court of 14 March 2024, file reference number II FSK 808/21.
- The sale of shares through tax-free exchange of shares, transformation and liquidation of a company constitutes tax avoidance, to which the GAAR clause may be applied – judgment of the District Administrative Court in Warsaw of 20 March 2024, file reference number III SA/Wa 2481/23.
- Performing remote work in a location outside the employer’s registered office gives (as a rule) the right to increased tax-deductible costs in PIT – individual interpretation of the Director of the National Tax Information of 22 March 2024, file reference number 0115-KDIT2.4011.70.2024.2.KC.
VAT
- EU legislation precludes national legislation under which a taxpayer is deprived of the right to deduct input VAT on the grounds that the amount of VAT-taxable transactions made by that taxpayer at a later stage of turnover was deemed insufficient – judgment of the Court of Justice of the EU of 7 March 2024, file reference number C-341/22.
- It is possible to adjust the VAT due on consumer sales, but the tax authority may raise the allegation of unjust enrichment of the taxpayer (this is to be assessed by the national court) – judgment of the Court of Justice of the EU of 21 March 2023, file reference number C-606/22.
- The buyer has the right to deduct input tax even if he receives a VAT invoice issued unjustifiably outside the National e-Invoicing System (Pol. KSeF) – individual interpretation of the Director of the National Tax Information of 21 March 2024 (file reference number 0112-KDIL1-3.4012.3.2024.2.KK).
- The Supreme Administrative Court has referred a question of law to the Court of Justice of the European Union – it concerns the compliance with EU law of the principle of VAT exemption for non-commercial imports of goods only if the recipient is located in Poland (decision of the Supreme Administrative Court of 26 March 2024, file reference number I FSK 812/20).
International Taxes
- Intermediation services are not subject to WHT under the Polish CIT Act – judgments of the Supreme Administrative Court of 20 March 2024, file reference number I SA/Gd 1099/23 and I SA/Gd 1100/23.
- A German cooperative cannot be treated on an equal footing with a company, so the “participation exemption” in withholding tax cannot be applied – judgment of the Supreme Administrative Court of 20 March 2024, file reference number II FSK 934/21.
Other
- Resolution No. 18/2023 of the Accounting Standards Committee on the adoption of the Position of the Accounting Standards Committee on the measurement of fair value for the purposes of accounting for mergers using the acquisition method was published in the “Official Journal of the Minister of Finance” (item 23).
- The provision of services by sellers of goods is not subject to retail sales tax – judgments of the Supreme Administrative Court of 12 March 2024, file reference number I FSK 1839/23, I FSK 1840/23, I FSK 740/22.
