Legislation and Practice – October in taxes and business law

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

Legislation

• A draft decree amending the decree on the types of notices that do not require a signature or stamp by the user of the e-Tax Office has been published on the website of the Government Legislation Centre – e-forms submitted by the e-Tax Office.
• A draft decree on authorizing selected units of the National Fiscal Administration to perform tasks of the Head of the National Fiscal Administration in the field of counteracting tax avoidance has been published on the website of the Government Legislation Centre.
• A draft decree amending the decree on the detailed scope of data contained in tax returns and records in the field of value added tax has been published on the website of the Government Legislation Centre – adapting SAF_VAT to the requirements related to the mandatory e-invoicing (Pol. KSeF).
• A draft decree on exemptions from the obligation record sales with the use of cash registers has been published on the website of the Government Legislation Centre – extension of the exemptions from the fiscalisation obligation for 2024.
• Decree on the detailed scope and methods of implementation of certain tasks of the Agency for Restructuring and Modernisation of Agriculture  was published in the “Journal of Laws” (item 2351) – providing assistance to certain producers of fruit or vegetables in connection with, among others, weather damage.
• Decree amending the decree on the transfer of certain cases within the scope of the activities of the Director of the National Fiscal Information, the President of the Social Insurance Institution and the President of the National Social Insurance Fund (KRUS) to other district administrative courts has been published in the “Journal of Laws” (item 2346) – the transfer of jurisdiction to the District Administrative Court in Opole with regard to complaints against binding information on rates, excise duty, tariffs and origin.

Tax Practice

Income taxes and transfer pricing

• The use of the SEZ exemption is possible only if the income is generated on the basis of assets acquired as part of the expenditure covered by the decision on support (individual interpretation of the Director of the National Fiscal Information of 2 October 2023, file reference number 0111-KDIB1-3.4010.465.2023.1.JMS).
• Article 15 sec. 1 of the Polish CIT Act does not constitute a form of an anti-avoidance clause – judgment of the District Administrative Court in Poznan of 3 October 2023, file reference number I SA/Po 448/23.
• A penalty for a delay in the provision of a service resulting from the late issuance of a permit by the authority may constitute a tax-deductible cost in CIT – judgment of the District Administrative Court in Bialystok of 4 October 2023, file reference number I SA/Bk 234/23.
• The IP Box relief may also be applied if the company purchases software fragments from other specialists – judgment of the Supreme Administrative Court of 5 October 2023, file reference number II FSK 870/22.
• Financing the transport of employees to work does not create income in PIT if specific benefits cannot be attributed to specific persons – judgment of the District Administrative Court in Wroclaw of 10 October 2023, file reference number I SA/Wr 906/22.
• The so-called “relief for young people” may be applied to a sponsorship agreement – individual interpretation of the Director of the National Fiscal Information of 10 October 2023, file reference number 0114-KDIP3-2.4011.672.2023.2.MN.
• PIT should not be charged on the distribution of profits from a limited liability company (formed as a result of the transformation of sole proprietorship) to the extent that they constitute PIT-taxable revenues under the sole proprietorship – judgment of the Supreme Administrative Court of 12 October 2023, file reference number II FSK 327/21.
• Reimbursement of expenses for the use of a private car by an employee for business purposes is taxable income in PIT, where the exemption may be applied only under the rules of Article 21 sec. 1 point 23b of the Polish PIT Act – judgment of the Supreme Administrative Court of 12 October 2023, file reference number II FSK 397/22.
• Expenses for cooperation with influencers fall within the scope of the expansion relief – individual interpretation of the Director of the National Fiscal Information of 16 October 2023, file reference number 0111-KDIB1-3.4010.391.2023.1.JKU.
• The market rent of real estate does not constitute a hidden profit in the “Estonian” CIT – judgment of the District Administrative Court in Lodz of 17 October 2023, file reference number I SA/Łd 513/23.
• Income of a family foundation from activities conducted through a civil partnership is subject to 25% (“sanction”) CIT – individual interpretation of the Director of the National Fiscal Information of 20 October 2023, file reference number 0111-KDIB1-2.4010.186.2023.2.EJ.
• A contractual penalty for a delay in the execution of works (independent of the taxpayer) may be a taxable cost in CIT – judgment of the Supreme Administrative Court of 24 October 2023, file reference number. II FSK 335/21.
• The taxable base in the tax on buildings (commercial real estate) is the initial value, not reduced by depreciation write-offs (judgment of the Supreme Administrative Court of 26 October 2023, file reference number II FSK 361/21). This is another ruling of this kind.
• The Ministry of Finance has published the templates of electronic documents TPR-C(5) and TPR-P(5) for 2022: https://www.podatki.gov.pl/ceny-transferowe/zmiany-w-prawie/publikacja-wzorow-dokumentow-elektronicznych-tpr-c-5-i-tpr-p-5-za-2022-rok/. At the same time, the Ministry of Finance announced an extension of the deadline for submitting TPR-P and TPR-C transfer pricing information for 2022 by 3 months (i.e. until the end of February 2024).

VAT

• The transfer of a tablet or smartphone to new subscribers is an element of a comprehensive service and should not be considered as a (separate) free transfer of goods – judgment of the Court of Justice of the EU of 5 October 2023, file reference number C-505/22.
• The application of different VAT rates to a beverage with milk depending on the place of purchase (restaurant or shop) is in line with EU law – judgment of the Court of Justice of the European Union of 5 October 2015, file reference number C-146/22.
• It is possible to prove the export of goods outside the EU with evidence other than official documents – for the purposes of the 0% VAT rate on the export of goods (judgment of the District Administrative Court in Gdansk of 10 October 2023, file reference number I SA/Gd 637/23).
• A taxpayer is removed from the register of active VAT taxpayers under the so-called STIR blockade by performing a material and technical action, not by an administrative decision (resolution of 7 judges of the Supreme Administrative Court of 23 October 2023, file reference number I FPS 3/23).

International Taxes

• On 17 October 2023, the EU list of non-cooperative jurisdictions for tax purposes was modified: Antigua and Barbuda, Belize and Seychelles were included and Costa Rica, the British Virgin Islands and the Marshall Islands were removed (the last 2 jurisdictions further included in the Polish list). The list is important due to the need to report tax schemes in respect of transactions with entities from such jurisdictions.
• The conditions for meeting the participatory exemption (WHT) on account of dividends can be applied not only to the direct but also to the indirect owner (as part of the look through approach concept) – judgment of the District Administrative Court in Warsaw of 17 October 2023, ref. no. Act III SA/Wa 1586/23.

Other

• A refusal to issue an advance tax ruling due to suspicion of tax avoidance may apply to benefits in a tax other than the one that is the subject of the application (judgments of the Supreme Administrative Court of 10 October 2023, file reference number III FSK 3235-3236/21).
• The Supreme Court will deal with the legal issue of whether a shareholder of a two-person company holding 99% of shares in a limited liability company is subject to the social security obligation – decision of the Supreme Court of 17 October 2023, file reference number III UZP 8/23.
• The provisions of the Local Taxes and Charges Act, to the extent that they result in the recognition that garages with separate ownership in residential buildings are taxed at the rate for other buildings (and not residential ones), are inconsistent with the Constitution of the Republic of Poland – judgment of the Constitutional Tribunal of 18 October 2023 (file reference number SK 23/19). However, the Tribunal postponed the expiry of these provisions until the end of 2024.
• The postponement by the Constitutional Tribunal of the expiry of the binding provisions on taxation of structures makes it impossible to challenge them during the postponement – judgment of the Supreme Administrative Court of 25 October 2023, file reference number III FSK 1042-1046/23.
• The Supreme Administrative Court refused to adopt a resolution on the principles of liability of management board members for the company’s tax liabilities – such an assessment should be made by ordinary adjudicating panels regarding specific facts, taking into account the evidence gathered in the case (decision of 30 October 2023, file reference number III FPS 2/23).