We present our summary of the most important tax events at the turn of August and September 2019. The announcement of a balanced state budget for 2020 (revenues and expenditures at the same level) makes the fiscal aspirations of the Ministry of Finance even more important. Two judgments of administrative courts, important from the perspective of CIT and VAT, also deserved a separate place in our last News Flash article.
How far do they reach, who and from when will be covered by the new tax law regulations, are summarized below, among others.
Submission of APA application – recommended especially until December 31st
- Draft law on the settlement of disputes concerning double taxation and the conclusion of advance pricing agreements already after the first reading in the Parliament;
- Submitting an APA application within the above deadline will exclude restrictions under Article 15e of the CIT Act (limit on the costs of intangible services).
- Submission of an application, organization of an initial meeting with the Ministry of Finance, completion of documents.
- Detailed confrontation of the Company’s situation with the benefits of the APA.
White list of VAT payers
- On 1 September 2019, a list of VAT information became operational;
- The white list enables, among others, checking whether the contractor is an active VAT taxpayer and checking his settlement account number;
- The white list is intended to assist the taxpayer within due diligence;
- Sanctions as of 1 January 2020 in the event of payment to a counterpart amount exceeding PLN 15 thousand to another bank account.
- Verification of contractors with the white list – especially in the case of customers with whom we start cooperation.
- In case of payment, checking whether the bank account number on the invoice is the same as on the white list.
Changes in income taxes since January 2020
- Recognition of the CIT/PIT consequences of so-called bad debts and relief for bad debts;
- Obligation to report payment practices by the largest CIT taxpayers (capital groups and companies with income above EUR 50 million);
- Announced changes in withholding tax settlement.
- Preparation of an individualized scheme of changes coming into force on 1 January 2020, according to your business.
Reminder: mandatory split payment from 1 November 2019
- Mandatory split payment will cover transactions subject to VAT in Poland, with the value exceeding PLN 15,000;
- The mechanism will be applied to selected goods and services;
- Sanctions include a fine of 100% of the VAT value resulting from the invoice, if information about the transaction being subject to the reverse charge mechanism is missing.
- Analysis of transactions concluded by a Taxpayer – selection of goods/services subject to a split payment regime (MPP).
- Identification of duties with respect to the application of the MPP mechanism.
Support for the sale of premises and the limit under art. 15e of the CIT Act
- Exclusions from tax deductible costs referred to in Article 15e of the CIT Act (limit on costs of intangible services) do not apply to services supporting the sale of premises;
- Narrowing the open catalogue of services under the CIT Act, to which the limitation in the tax-deductible costs classification applies;
- Voivodship Administrative Court, verdict of 27/08/2019 (III SA/Wa 2004/18).
- Submitting a request for an individual tax interpretation to determine whether the costs of intangible services incurred by your Company are subject to CIT restrictions.
Deadline for submission of transfer pricing statements and information
- Obligation to submit a statement and a CIT-TP report within 9 months after the end of the tax year; for entities whose financial year is a calendar year, the deadline is 30 September;
- If the Taxpayer chooses new transfer pricing regulations – submitting the statement only by means of electronic communication;
- Ministry explanations on the elements, period and form of the statement.
- Identification of transfer pricing documentation duties, including mandatory information as required by law.
- Preparation of the transfer pricing documentation.
Uniform rules for the taxation of chain transactions and consignment warehouses
- Since January 2020, comprehensive changes in the rules of taxation of intra-EU trade in goods (implementation of the provisions of the EU Council Directive);
- Changes in intra-EU transactions (WDT and WNT), consignment warehouses, conditions of application of 0% rate.
- Advice on meeting new requirements for intra-EU trade, on the implementation of the ‘presumption’ of WDT’s performance.
- Informing about further progress of work on the draft law on amending the VAT Act.
VAT abuse clause – Supreme Administrative Court judgment
- An unreasonably fixed price of goods which does not reflect their real value must be treated as an abuse of tax law;
- In the described case: promotional kits (beer and baguette, vodka and citrus, coffee and cream);
- Supreme Administrative Court, 23/08/2019 (I FSK 1434/17).
- Verification of transactions concluded by the Company from the point of view of “artificial character” within the meaning of the VAT Act.