Legislation and Practice – September in taxes and business law

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

Legislation

• The Council of Ministers has adopted a draft act on compensatory taxation of constituent entities of international and domestic groups – the introduction of a Global Minimum Tax in Poland (as part of the so-called “Pillar 2” initiative). Now the project will be dealt with by the Sejm.
• The Sejm has adopted an act amending the Personal Income Tax Act and certain other acts – the introduction of the so-called “cash-basis” PIT.
• A Decree amending the Decree on reduced rates of tax on goods and services has been published in the “Journal of Laws” (item 1399) – 0% VAT on donations of construction materials for flood victims.
• A Decree on the extension of certain deadlines provided for in the provisions of the tax law in connection with the flood in September 2024 has been published in the “Journal of Laws” (item 1390).
• A Decree amending the Decree on reduced rates of tax on goods and services has been published in the “Journal of Laws” (item 1381) – 0% VAT on donations to flood victims.
• The Ministry of Finance has proposed an auto-amendment to the regulations on SAF_CIT. According to the Ministry’s proposal, it will be possible to postpone certain obligations through a decree.
• The Council of Ministers has adopted a draft act amending the Polish VAT Act and certain other acts – implementation of EU Directives No. 2020/285 and 2022/542 (including the application of the subjective exemption due to the level of turnover for EU taxpayers).
• A draft Act amending the Polish VAT Act and the Excise Duty Act and certain other acts has been published on the website of the Government Legislation Centre – including the extension of the reverse charge mechanism with respect to gas or energy, as well as changes in the application of rates for certain goods.

Practice in taxes

Income taxes and transfer pricing

• A non-arm’s length transaction between members of a tax capital group results in its dissolution by virtue of law, even if its subsequent correction is carried out – judgment of the Supreme Administrative Court of 3 September 2024, file reference number II FSK 815/24.
• The landlord’s expenses in terms of adapting to the tenant’s needs (with the fit-out mechanism) may constitute indirect tax costs – judgment of the Supreme Administrative Court of 3 September 2024, file reference number II FSK 1486/21.
• Lease rent for trademarks (in private property) may be settled with a lump sum income – judgment of the District Administrative Court in Wroclaw of 4 September 2024, file reference number I SA/Wr 310/24.
• Goodwill created by way of datio in solutum cannot be equated with goodwill created by purchase, and as a result it cannot be subject to depreciation under the provisions of the Polish CIT Act – general interpretation of the Minister of Finance of 9 September 2024, file reference number DD5.8203.5.2023.
• A holding company in which a listed company is a shareholder is not obliged to establish its connections with “tax haven” entities for the purposes of applying the exemption within a Polish holding company – judgment of the District Administrative Court in Warsaw of 18 September 2024, file reference number III SA/Wa 1529/24.

VAT

• The taxpayer is entitled to deduct input tax on CSR expenses. These expenses affect, for example, its image as a stable contractor or the motivation of employees – judgment of the District Administrative Court in Lodz of 4 September 2024, file reference number I SA/Łd 433/24.
• Import of transport services may be settled as import of continuous services – judgment of the Supreme Administrative Court of 9 September 2024, file reference number I FSK 1786/20.
• EU regulations do not preclude national legislation providing that the amount of value added tax (VAT) deposited in a separate VAT account held by a supplier with a banking institution may be used only for limited purposes, namely, in particular, to pay VAT due to the tax authority or to pay VAT indicated on invoices received from suppliers of goods or service providers – judgment of the Court of Justice (EU) of 12 September 2024,  ref. no. C-709/22 (Syndyk Masy Upadłości A vs Director of the Tax Administration Chamber in Wroclaw). The case revolved around the issue of the receiver’s rights to the bankrupt’s VAT account.

International Taxes

• If an employee provides remote work to a foreign entity from a private apartment in Poland, in a permanent and organized manner, this leads to the establishment of a permanent establishment (of the employer) in Poland – individual interpretation of the Director of the National Tax Information of 4 September 2024, file reference number 0114-KDIP2-1.4010.364.2024.2.MW
• Article 22 sec. 4 of the Polish CIT Act does not provide for the condition of the statute of the recipient of the dividend as the beneficial owner for the application of the participation exemption in WHT – judgment of the District Administrative Court in Warsaw of 12 September 2024 (file reference number III SA/Wa 1527/24).

Other

• The new version of the Decree on the minimum wage (for 2025) assumes higher values – PLN 4,666 (instead of PLN 4,626) and PLN 30.5 per hour (instead of PLN 30.2 per hour). 
• The assumptions for the draft act on artificial intelligence systems – implementation of the principles necessary to implement the EU AI Act – have been published on the website of the Government Legislation Centre.
• A draft amending the Polish Act on the Management System for Emissions of Greenhouse Gases and Other Substances and Certain Other Acts has been published on the website of the Government Legislation Centre – implementation of the principles resulting from the implementation of the CBAM into national legislation.