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

• The assumptions for the draft act amending the Act amending the Act on Value Added Tax and Certain Other Acts have been published on the website of the Government Legislation Centre – confirmation of the mandatory postponement of the KSeF until 2026, simplifying changes.
• The Act amending the Personal Income Tax Act and certain other acts has been published in the Journal of Laws (item 1593) – the introduction of the so-called “cash PIT”.
• The Council of Ministers adopted a draft act amending the Act on health care services financed from public funds – exclusion of income and tax-deductible costs from the sale of fixed assets from the basis for the assessment of the health contribution of entrepreneurs.
• The Council of Ministers adopted a draft act amending the Act on Packaging and Packaging Waste Management – including the postponement of the deposit system until October 2025.
• The Senate introduced amendments to the Act amending the Act on Value Added Tax and certain other acts – the so-called SME package. Now the act was sent back to the Sejm.
• The Decree on the abandonment of the levy of income tax on the amounts from property insurance received in connection with the removal of the effects of the flood of September 2024 has been published in the Journal of Laws (item 1551).
• The Decree on the abandonment of the levy of income tax on the lump-sum tax on corporate income in connection with the removal of the effects of the flood of September 2024 has been published in the Journal of Laws (item 1550).
• The Council of Ministers adopted a draft act amending the Agricultural Tax Act, the Local Taxes and Fees Act, the Forest Tax Act and the Stamp Duty Act – in particular: introducing changes to the definition of the terms “structure” and “building”, changes to the taxation of multi-car garages in residential buildings.
• A draft act on artificial intelligence systems has been published on the website of the Government Legislation Centre – provisions facilitating the implementation of the provisions of the EU AI Act.
• The Council of Ministers adopted a draft act amending the Accounting Act and certain other acts – implementation of Directive 2022/2464 and CSRD (the changes are to concern non-financial reporting and raising the financial thresholds for defining entities from the SME sector).

Practice in taxes

Income taxes and transfer pricing

• A “zero-emission” merger of “sister” companies does not generate income for the acquiring company – judgment of the District Administrative Court in Warsaw of 3 October 2024, file reference number III SA/Wa 1425/24.
• Division of a company by spin-off in order to organize the asset structure does not constitute tax avoidance – clearance opinion of 7 October 2024, file reference number DKP2.8083.1.2024.
• It is the date of adoption of the resolution on the distribution of profit that determines the application of the rate in the “Estonian” CIT – judgment of the District Administrative Court in Gdansk of 9 October 2024, file reference number I SA/Gd 620/24.
• Granting a loan constitutes a hidden profit in the “Estonian” CIT, regardless of the issue of economic justification or the arm’s length nature of its terms – judgment of the Supreme Administrative Court of 9 October 2024, file reference number. II FSK 797/24.
• Entrepreneurs’ winnings in competitions should be accounted for in the source of business activity in PIT – judgment of the Supreme Administrative Court of 10 October 2024, file reference number II FSK 92/22.
• In a situation where the right to depreciation cannot be exercised by a taxpayer who is the owner of a building/residential unit, it is reasonable to assume that capital expenditures incurred by a taxpayer who is not the owner of such a building/residential unit are also not subject to depreciation – reply of the Minister of Finance to parliamentary question no. 4865 of 10 October 2024, file reference number DD2.054.20.2024.
• The B+R relief cannot be settled if the results of scientific research are used by the B+R activities of another entity – judgment of the Supreme Administrative Court of 17 October 2024, file reference number II FSK 125/22.
• Refund of an in-kind contribution in the same form and amount does not trigger the application of taxation under Article 14a of the CIT Act – judgment of the Supreme Administrative Court of 17 October 2024, file reference number II FSK 133/22.

VAT

• “Should Articles 167, 168(a) and 178(a) of the VAT Directive and the principles of fiscal neutrality, effectiveness and proportionality be interpreted as precluding a national provision, such as Article 86 sec. 10b point 1 of the Polish VAT Act, from which it follows that a taxable person may not exercise the right to deduct input VAT in the return submitted for a period of time, in which he met the substantive conditions for exercising this right, if he has not yet received an invoice during this period – despite the fact that he received the invoice before submitting this declaration?” – a question referred for a preliminary ruling by the Supreme Administrative Court to the Court of Justice of the European Union (order of 2 October 2024, file reference number I FSK 169/21).
• Making the device available to the contractor solely for the purpose of performing tooling work does not deprive the contractor of the right to deduct input VAT – judgment of the Court of Justice of the European Union of 4 October 2024, file reference number C-475/23.
• Creating a company in order to maintain the VAT exemption may be considered an abuse of law – judgment of the Court of Justice of the EU of 4 October 2024, file reference number C-171/23.

International Taxes

• The principle of resolving discrepancies in the interpretation of its provisions based on the English text in the Polish-Swedish double taxation treaty obliges the Polish tax remitter to comply with Article 11 sec. 1 and 2 of the treaty on the basis of the English version, regardless of the official correction of the error – resolution of the Supreme Administrative Court composed of seven judges of 28 October 2024,  file reference number II FPS 1/24.

Other

• Electric bicycles provided to employees (for the purpose of commuting to work) are subject to contributions – interpretation of the Social Insurance Institution (ZUS) of 14 October 2024, file reference number DI/100000/43/839/2024.
• Buildings classified in the land and building register as residential, intended for rent, as part of the business activity conducted by the real estate tax payer (landlord), in the part in which they serve to meet the housing needs of tenants, should be treated as residential buildings or parts thereof referred to in the real estate tax regulations – resolution of the Supreme Administrative Court composed of seven judges of 21 October 2024, file reference number. III FPS 2/24.
• In the legal status in force since 1 March 2017, the tax authority of the first instance, granting the order of immediate enforceability of a decision issued by the head of the customs and tax office, is the head of the tax office competent for the party resolution of the Supreme Administrative Court composed of seven judges of 28 October 2024, file reference number II FPS 2/24.
• Since 1 October this year, a centralised hotline of the National Tax Administration (KAS) has been operating. Employees of tax offices and the National Tax Information Service (KIS) will be available at the numbers of one nationwide KAS hotline: (+48) 22 330 03 30 – for calls from mobile phones and 801 055 055 – for calls from landline phones.