Under Labour Code Art. 6720 §6, the rules for remote work set forth in the agreement or policy should address the following issues:
Under Labour Code Art. 6724, the employer must:
In the case of remote work, the following will also be required on the part of the employer:
If remote work is performed on the basis of agreement upon conclusion of the employment contract, the written notice of employment conditions referred to in Labour Code Art. 29 §3 should also specify the organizational unit to which the employee’s workstation is assigned and indicate the persons responsible for cooperation with the employee and authorized to conduct an inspection at the site where remote work is performed.
If remote work is performed on the basis of agreement concluded during the course of employment or based on the employer’s instruction, the employer will have to provide the aforementioned notice to the employee, in paper or electronic form, no later than the date when the employee begins performing remote work.
The definition of remote work is set forth in Labour Code Art. 6718: remote work is work consisting of performance of the employee’s duties wholly or partly at the employee’s place of residence, agreed in each instance by the employee and the employer, using means of communication at a distance.
Remember:
The decision to perform remote work may be taken:
A change from stationary work to remote work may be made at the initiative of the employer or the employee. This possibility exists both upon conclusion of the employment contract and during the course of employment.
Remote work at the employer’s instruction:
The employer can assign remote work in the following instances:
The employee must confirm, in a declaration on paper or electronically, that he or she has the proper space and technical conditions to perform remote work.
Important! The employee’s declaration that he or she has the proper space and technical conditions to perform remote work must be submitted immediately prior to issuance of the instruction.
Employee’s request for remote work:
An employer must grant a request for remote work submitted by:
Important! The employer’s refusal to allow remote work must be justified in the situation, where remote work is not possible for reasons of work organization or the type of work performed by the employee. The employer must notify the employee of the reason for refusal to grant the request in writing or electronically within 7 days after the employee submits the request.
The new regulations also provide for “occasional remote work.” Remote work may be performed occasionally, at the employee’s request made in writing or electronically, for a duration not exceeding 24 days within the calendar year.
Reimbursement of costs of occasional remote work: the employer can reimburse the employee for costs directly connected with such work. Under the Personal Income Tax Act, the reimbursed costs will not be taxed as the employee’s income.
Inspection of the performance of occasional remote work, and compliance with occupational health and safety regulations and data protection procedures, is conducted under rules agreed with the employee. This solution was introduced because the rules for performance of occasional remote work will not be specified in workplace policies.
If remote work was agreed during the course of the employment relationship, either party may submit a binding request, in paper or electronically, to restore stationary work.
The parties will agree on the date for restoring the prior working conditions, but no longer than 30 days after receipt of the request. If the parties cannot agree on the date, the prior working conditions will be restored 30 days after receipt of the request.
Important! The employer cannot make a binding request to cease remote work and restore the prior working conditions in the case of the following employees performing remote work at their own request:
However, even in these cases, remote work can be ended if work can no longer be performed remotely due to the organization of the work or the type of work performed by the employee.
The most important change compared to the previous version is the introduction of an obligation for the VAT payer making the payment for a structured invoice via direct debit or transfer order, or another payment instrument enabling the transfer of funds, to provide the invoice identification number or the collective identifier identifying the invoices in KSeF.
So far, in bills introducing mandatory KSeF, the aforementioned obligations only concerned situations in which a payment was made in the split payment mechanism.
This obligation will apply to all VAT taxpayers registered in Poland for VAT purposes (including foreign entities).
According to the draft law, this obligation will enter into force on January 1st, 2025.
No other significant changes were made to the draft, however, obligations related to a KSeF failure were made more precise.
You can read the draft amendment of the Act on the Parliament website.
Previous periods of employment are included in the six-month seniority period, which means that if an employee worked 4 months at another company before applying for parental leave, but did so under a contract of employment, they are entitled to such a leave.
According to Article 186 § 2 and § 3 of the Labor Code, the dimension of parental leave is:
Each parent or legal guardian is entitled to an exclusive right to one month of parental leave within a 36-month leave entitlement period. This right cannot be transferred to the other parent or legal guardian. If one parent or guardian has exercised this right, the leave can last for a maximum of 35 months.
Both parents or guardians of the child can simultaneously go on parental leave, but it should be noted that the total duration of parental leave cannot exceed the maximum limit specified in §2 and §3 of Article 186 of the Labor Code.
A parent of a child is entitled to up to 36 months of parental leave if:
The application in paper or electronic form must be submitted no less than 21 days before the start of the leave. The employer is obliged to grant the employee's request.
If the application is submitted after the deadline, the employer shall grant parental leave no later than 21 days from the date of the application’s submission.
The application can also be withdrawn no later than 7 days before the scheduled start of the leave by submitting a statement to the employer in paper or electronic form.
A parent who wishes to cease their ongoing parental leave may do so at any time, meaning they can return to work from one day to the next, but with the employer's consent or by providing prior notice to the employer, no later than 30 days before the intended date of resuming work. (Article 1863 of the Labor Code).
During parental leave, an employee has the right to take up paid employment with their current or another employer, or engage in other activities, if it does not prevent them from personally caring for the child.
However, if it is determined that the employee has permanently ceased to provide personal care for the child, the employer shall summon the employee to report to work on the date specified by the employer, no later than 30 days from the date of receipt of such knowledge and no earlier than 3 days from the date of the summons. In such a case, we are dealing with the termination of parental leave before the predetermined date.
According to Article 1868 § 1 of the Labor Code, an employer may not terminate or dissolve an employment contract during the period from the date on which an employee eligible for parental leave applies for:
Employer termination of the contract is permissible only in the event of bankruptcy or liquidation of the employer, as well as when there are justifiable reasons for terminating the employment contract without prior notice due to the employee's fault.
In cases where an employee submits a request for parental leave more than 21 days before the start of using parental leave or reduced working hours, the prohibition of contract termination and notice of termination of employment begins to apply 21 days before the start of the leave or of the reduced working hours.
On April 18th, 2023, the Finance Minister's Decree of March 30, 2023, on records kept by members of a VAT group was published in the Government Journal under item 727. The regulations apply to a narrow group of taxpayers such as the VAT group, or in fact its members, and will go into effect on July 1st 2023.
Since January 1st, 2023, another type of VAT payer has been operational in the Polish legal order - the VAT group. Pursuant to current regulations, a VAT group may be created by financially, economically and organizationally related entities.
The institution of a VAT group is voluntary and depends on the decision of the entrepreneurs forming the group. As Article 8c(1) of the VAT Law indicates, the supply of goods and services made by a member of a VAT group to another member of the same VAT group is not taxable.
As a result of the introduction of the provisions for the new JPK_GV logical structure (1) on July 1st, 2023, members of a VAT group will be required to send records to the tax office with jurisdiction over the VAT group representative by electronic means of communication, for monthly periods, by the 25th of the month following each month. The record will be prepared and submitted separately by each member of the VAT group, in the scope of supplies and services provided to other members of the VAT group. The need to provide such records will also occur in the absence of transactions for the supply of goods or services between members of the VAT group in a given settlement period.
The published regulation specifies the detailed scope of data contained in the records and the method of presenting data in the records, taking into account the need to counteract tax evasion or avoidance by the VAT group, control of the obligations of the VAT group by the tax authority, and the technical and organizational possibilities of keeping the records by the members of the VAT group.
The new records of the JPK_GV structure (1) will need to contain the following data:
In addition, these records may include:
You can read more about the aforementioned regulations and appendix on the method of indicating data in the records, under the following link.
Entrepreneurs should pay particular attention to changes in tax law ensuing from cancelling the state of epidemic emergency.
The obligation of reporting tax schemes other than those of a cross-border nature, i.e., so-called national schemes, has been in suspension since March 31st, 2020. The planned cancellation of the state of epidemic emergency on July 1st, 2023, means that the suspension period of MDR reporting deadlines will cease 30 days after lifting the state of epidemic emergency.
If the draft regulation enters into force, the obligation to report national schemes will return. Taxpayers will have to settle their reporting obligations for the last 3 years.
Important: Failure to comply with the MDR obligations is subject to sanctions, which may amount to as much as PLN 33.5 million. Therefore, taxpayers should analyze transactions which took place during the period when the reporting deadlines were suspended.
We invite you to become acquainted with reporting tax schemes (MDR).
Applicable regulations provide that in case of residency certificates with no expiry date, in relation to which the period of the next 12 months expires during the state of epidemic emergency, or during the state of epidemic announced in regard to COVID-19, the tax remitter is obliged to take such a certificate into account when collecting tax within the duration of these states and for a period of 2 months after their cancellation.
In effect of canceling the state of epidemic emergency on July 1st, 2023, from September 1st, 2023, payers will not be able to take into account residence certificates without a validity period after twelve months from the date of their issuance.
Additionally, during the state of epidemic emergency announced in connection with COVID-19, and for 2 months following its cancellation, the condition of obtaining a certificate of residency by the payer from the taxpayer is also fulfilled when the payer has the taxpayer’s certificate of residence covering the years of 2019 or 2020, along with the taxpayer's statement as to the validity of the data contained therein.
Important: After 2 months following the cancellation of the state of epidemic emergency, payers using certificates covering 2019 or 2020 should obtain current residency certificates.
Until the state of epidemic emergency is lifted, the deadline for issuing individual interpretations has been extended by 3 months. The Director of the National Tax Information should issue individual interpretations without undue delay, no later than within 6 months from the date of receipt of the application.
Revoking the state of epidemic threat will result in the restoration of standard deadlines resulting from the Tax Ordinance. Hence, tax authorities will be obliged to issue an individual interpretation without undue delay, no later than within 3 months from the date of receipt of the application.
We would like to remind you that if the buyer makes a payment for an invoice issued by an active VAT payer with the value equal to or exceeding PLN 15,000 to an account other than that included on the date of the transfer order in the list of entities referred to in Art. 96b sec. 1 of the VAT Act (the so-called white list of VAT payers), the buyer has no right to include such an expense in their tax deductible costs. Furthermore, the buyer is jointly and severally liable with the seller for the VAT liability.
However, the buyer has the option of avoiding negative consequences if they submit a ZAW-NR notification to the relevant tax office within the specified period.
During the state of epidemic emergency and the state of an epidemic announced in connection with COVID-19, the deadline for submitting the notification to ZAW-NR has been extended to 14 days from the date of ordering the transfer.
As a result of lifting the state of epidemic threat on July 1st, 2023, the standard 7-day deadline for submitting a notification on the ZAW-NR form will apply.
The current regulations provide for various simplifications withing the scope of transfer pricing, i.e.:
Cancellation of the state of epidemic threat will result in taxpayers being deprived of the right to use these simplifications.
Pursuant to Art. 57 § 1 of the Tax Ordinance, in decisions on the deferral of the tax payment deadline or spreading the payment of tax into installments, and in decisions on the deferral or spreading into installments the payment of tax arrears together with interest for late payment, or interest on unpaid tax advances, a prolongation fee is determined on the amount of tax or tax arrears.
The provisions of the acts related to COVID-19 indicate that during the period of epidemic threat or within 30 days following its cancellation, the extension fee is not determined.
If the state of epidemic threat is canceled, the extension fees in the decisions above (i.e., decisions issued based on Article 67a § 1 pt. 1 or 2 of the Tax Ordinance) will be determined anew.
The provisions of the PIT Act and CIT Act specify that tax deductible expenses do not include contractual penalties and compensation for damages and defects of delivered goods, or of services provided; as well as delays in delivering goods free of defects, or delays in removing defects in goods, or in services provided.
Laws introduced in connection with COVID-19 indicate that the aforementioned provisions do not apply to paid contractual penalties and damages, if the defect of the delivered goods, performed works and services, as well as the delay in the delivery of goods free of defects or the delay in the removal of defects in goods or performed services, arose in connection with the state of epidemic threat or the state of epidemic announced due to COVID-19.
Revoking the state of epidemic emergency on July 1st, 2023, would exclude the possibility of including contractual penalties and compensation for damages or defects in goods delivered, or services provided, as well as delays in delivering goods free of defects or delays in removing defects in goods, or performed services, as tax deductible costs.
We will keep you informed about the progress of work on the draft regulation on canceling the state of epidemic threat and related changes in tax law.
The use of new software solutions increasingly poses the challenge of correctly identifying the emergence of a tax liability for VAT on granted licenses.
Correct recognition of tax liabilities in the case of computer software licenses is extremely important. Late identification of such tax obligations - and thus delayed reporting of transactions in the JPK_VAT register - gives rise to negative financial and tax consequences such as tax arrears and the necessity of paying interest by the entity granting such a license. On the other hand, recognizing the tax obligation on granted licenses too soon entails negative effects on the buyer's side, as this moment, along with the received invoice, determines the right to deduct input tax.
By granting a license, a software provider transfers the rights to use computer software under specified conditions and for a specified time. The license can be granted for a fixed or indefinite period. It should be emphasized that a license implies that the software’s copyright remains with the licensor, who continues to be the owner of the program and merely grants the opportunity to use the software to another person or entity.
According to Art. 8(1)(1) of the VAT Act, the provision of services is understood as any provision for a natural person, legal person or organizational unit without legal personality, which does not constitute a supply of goods within the meaning of Art. 7, including the transfer of rights to intangible assets, regardless of the form in which the legal transaction was made.
The granting of a license for computer software is treated as a provision of services under the VAT Act. It is another way in which the recipient obtains the right to an intangible asset. The supplier transfers the right to use the software, i.e., places the software at the disposal of the recipient with the right to use it.
This topic has undergone various interpretations by the tax authorities over the years. In the past, licensing was treated as an ongoing service. The moment when the tax obligation arose depended on the payment periods agreed upon by the parties of the contract. This approach was applied until the Supreme Administrative Court expressed its opinion in the judgment of September 5, 2017 (file reference number I FSK 2319/15). At that time, the adjudicating panel agreed with the position that the transfer of a license cannot be perceived from the point of view of continuous services - regardless of whether the license is issued to the buyer for an indefinite period or for a predetermined period. The Supreme Administrative Court held that the service is already provided at the moment of completion of all works that enable the customer to use the license. Importantly, payment by instalments also does not affect the moment when the VAT obligation arises, as it is only a form of settlement of the service accepted by the parties of the transaction. In view of the above, in the opinion of the courts, and currently also in the opinion of the tax authorities, the tax obligation should be recognized in accordance with general principles.
According to Art. 19a(1) of the VAT Act, the tax obligation arises at the moment of delivery of goods or performance of services. This is the general principle of taxation of goods and services.
The nature of the service determines the actual moment of their performance. Determining the moment of service performance when granting a software license is therefore dependent on the date of service performance, i.e., the terms of the concluded contract.
In the context of the granting of a license, it is the purchaser who obtains the right to use the software upon fulfilling conditions described in the agreement, i.e., upon the transfer of this right. Therefore, in a situation where the granting of a license takes place on a specific date specified in the contract, e.g. on the date of signing the contract or on the date of transferring the software or license keys, the tax obligation for the granting of the license arises on that date, on the date of signing the contract or on the date of transferring the software or license keys, respectively. Subsequent instalment payments for the granted license are not considered.
In economic transactions, there are also frequent cases where the granting of a license for computer software is conditioned by making an earlier payment confirming the purchase of the license and acceptance of the terms of its use. In this case, the tax obligation will arise upon receipt of payment in relation to the amount received in accordance with Art. 19a(8) of the VAT Act.
*Confirmation of the aforementioned positions can be found in individual interpretations issued by the Director of the National Tax Information, under reference number 0114-KDIP4.4012.28.2018.1.AS dated March 8, 2018, under reference number 0113-KDIPT1-2.4012.323.2019.1.SM dated September 9, 2019, as well as in the interpretation under reference number 0113-KDIPT1-2.4012.35.2022.3.PRP issued on April 19, 2022, confirming the emergence of a tax liability in accordance with Article 19a(1) of the VAT Act in the case of acquiring software licenses from a foreign entity.
The proposed changes will require some entrepreneurs to make significant adjustments within their companies.
Pursuant to the planned legislative package, invoices will have to be issued electronically. Member states can request an exemption from the mandatory application. However, electronic invoicing cannot be avoided for intra-community EU transactions. From 2024, a customer's consent will no longer be required to issue an e-invoice for domestic transactions, whereas now the customer can still opt for a paper-based invoice. The directive also changes the definition of an electronic invoice, which must be issued, forwarded and, of course, received in a structured electronic form enabling its automatic and electronic processing. It will be mandatory to indicate the bank account number, the payment deadline and the serial number of the correction invoice on the structured invoice.
As for intra-community transactions - if the buyer is liable to pay the tax - the invoice must be issued within two days. Technically, these invoices will also have to be uploaded to national tax authorities which will forward them to a common EU database. This means that the data of a transaction concluded on Monday should appear in the EU database no later than on Wednesday.
These changes are significant due to the fact that currently, companies - not only in Hungary – are obliged to fulfill this invoicing obligation within 15 days from the month of a transaction’s completion. Providing data about the transaction within two days is necessary even if the invoice is not issued within the deadline. In accordance with the above, collective invoicing will also cease. Frequent sales invoices cannot be issued together once a month.
Transparency would be fully served if the recipient also filled out the data in the same way, but there is no information yet on activities on the recipient's side. In parallel with the above, among other things, the community aggregate reporting obligation (A60) will also be abolished.
The goal of these changes is to desist some forms of tax fraud, especially VAT fraud. Nonetheless, putting the new rules into practice will not be easy, even in the case of law-abiding companies.
Since January 2023, the minimum monthly wage in Polandis 3490 PLN gross. This amount will increase to 3600 PLN gross by the 1st of July
The newly introduced minimum wage will affect:
1. Minimum benefit base – the base benefit amount cannot be lower than the minimum wage for a given calendar year, reduced by social security contributions financed by the insured individual.
In 2023, the minimum benefit base for sick leave will amount to:
2. Amount of idle time pay– an employee is owed renumeration during downtime, calculated in considering their individual pay grade, specified as an hourly or monthly rate. In cases when such an element of renumeration was not distinguished while discussing employment terms, idle time pay amounts to 60% of renumeration. In any case, the amount of this renumeration cannot be lower than the minimum wage.
3. Maximum amount of severance pay which may be paid out to employees – in cases where the employment relationship is terminated for reasons not attributable to the employee.
The amount of severance pay cannot exceed the fifteenfold of the minimum wage, established by separate provisions, effective on the day when the employment relationship is terminated.
4. Limiting the amount of severance payments during epidemics – Article 15g of the Anti-Crisis Shield provides that if, during the period of an epidemic emergency or a state of epidemics declared due to Covid, the employer experienced a decrease in economic turnover or a significant increase in the burden on the wage fund; the amount of severance pay; compensation or other monetary benefit paid by such employer to an employee in connection with the termination of an employment contract, if the regulations provide for the obligation to pay the benefit; may not exceed 10 times the minimum wage.
5. Amount of night shift differential pay– employees performing night shifts are entitled to bonus renumeration for each hour worked at night, amounting to 20% of the hourly rate whicharises from the minimum wage, established by separate provisions.
The indexation rate changes per quarter for employees opting for rehabilitation benefits. The indexation amount of the sickness benefit basis for the next quarter is announced by the Chairman of the Social Insurance Institution (ZUS) via the Polish Monitor, no later than on the last day of each quarter.
Indexation of the base rate for sickness benefits is performed after a 6-month benefit period, with sick pay taken into consideration, if the payment of benefits is to be continued. Indexation consists of increasing the base rate of sickness benefits by the percentage increase of average monthly renumeration for previous quarters.
In 2023, the coefficient value amounts to 20,83 for employees for whom vacation time equivalents are paid out. As for part-time employees, this coefficient is proportionally reduced.
With the start of the new year, an employer should summarize leave taken last year and subsequently add new limits for the new year. With the 1st of January, an employee earns the right to a new paid leave limit of 20 or 26 days per year. Employees in their first year of employment at a company have a limit of 1/12th of the leave they are entitled to when starting a new year. Employees receive this 1/12th with each passing month of employment.
Pursuant to Labor Code art. 168, leave unused within the period set in art. 163 of the Labor Code (i.e., within the limit established in the holiday plan or after consulting with the employee) should be provided to the employee no later than by September 30th of the following calendar year.
Holiday plans: The Labor Code sets forth an obligation of creating holiday plans by employers with a functioning workplace trade union organization, which has not abandoned or repealed the creation such a plan. In this case, most employers are not obliged by labor law to create a formal document referred to as the „holiday plan.” Art. 163 of the Labor Code explains that in cases where there is no obligation of creating such a „holiday plan,” the employer sets the dates of holiday leave individually, after agreement with their employee.
An employer is obliged to give each employee 4 days of leave on dates specified by the employee themselves (art. 167 of the Labor Code). All employees are entitled to such leave during each single year, in the same amount of 4 days. Leave on demand which is not used by the employee within a given calendar year turns into normal overdue leave. The days of this leave lose their specific characteristic of leave on demand with the end of each calendar year. In each subsequent year, an employee acquires the right to 4 days of leave on demand.
Pursuant to Labor Code art. 188 § 1, during a single calendar year, an employee raising at least one child who is not over 14 years of age is entitled to leave for 16 hours or two days, while retaining the right to renumeration.
A declaration on the intent (or lack thereof) to benefit from these parental rights may be submitted by the employee at any time. Usually, this document is provided to the employer at the beginning of employment, or right after childbirth.
There is no need to submit this document to the supervisor for each calendar year. It can be submitted only once. When changing the decision to benefit from these lawful privileges, it is sufficient to submit a new declaration. The employer may adopt a rule of submitting such a declaration with the beginning of the new year.
Important
The issue of recognizing an entity as a payer of Social Security contributions is associated with various consequences of a formal nature. What’s decisive in this case is the employment status as of November 30th of the previous year.
If, by November 30th, the following amount of people applied to health insurance:
| 20 people or less | Over 20 people |
| The Social Insurance Institution (ZUS) will be the benefits payer for the next year | Benefits will be paid by the employer (benefits: sick pay, care allowance, maternity allowance, compensatory allowance, rehabilitation benefits) |
Changes in the number of people applied to health insurance that took place after Nov. 30th in a given year (or after the first month in which the contributions payer made their first application of people to health insurance), do not have any effect on previously granted authority for determining eligibility to paying out benefits.
At the beginning of the new year, work time for the new year should be verified, and a work time schedule should be established. It is also necessary to verify how working time accounting periods have been regulated in the wok regulations.
According to Labor Code Art. 129 § 4, creating a work time schedule is not required, if:
Important
• an employee’s working time schedule results from labor law, from a notice on working time systems and schedules, or from the employment contract.
• work is performed in a task-based system.
• at the employee’s written request, the employer applies a flexible or individual working time schedule.
Timesheets are not deemed necessary within a „rigid” worktime schedule, where workdays and hours are known in advance and fundamentally remain unchanged. Such a schedule primarily exists in the so-called basic work time system, which involves working 5 days a week while maintaining an 8-hour daily norm, and Saturdays (usually) being free due an established five-day work week.
Timesheets, even in a basic work time system, may prove necessary when introducing shift-based work. Also, hiring a part-time worker with uneven working time distribution requires the creation of such a schedule. The foundation for planning work time for such an employee is a correctly established work time scope (proportionally to the full/part-time contract performed by the employee), applicable during a given work time accounting period.
Each holiday occurring within the work time accounting period, and occurring on a day other than Sunday, shortens the scope of working time by 8 hours. According to this provision, for each non-working holiday which occurrs on a Saturday, an employer must indicate a non-working day for their employees on an alternative date. In 2023, the Polish holiday which occurs on a Saturday is on November 11th -National Independence Day.
An employee should submit this document when commencing employment but may also submit it later at any given moment during the year. Once submitted, PIT-2 remains valid for subsequent tax years until it is revoked or withdrawn by the employee.
Since 2023, the group of taxpayers who can submit the PIT-2 form has been expanded. Currently, the PIT-2 form may be submitted not only by employees on employment contracts, but also contractors (contract of mandate, contract for specific work), people undergoing graduate practice, student internships, managers on contracts.
Employers with fewer than 50 full-time employees are exempt from the obligation to create the ZFŚS. On the other hand, employers with at least 20 employees and less than 50 employees with trade unions are obliged to create the Company Social Benefits Fund, if the company's trade union organization submits a request to this effect.
An employer who wants to resign from the Company Social Benefits Funds (ZFŚS) and from the payment of holiday benefits, is obliged to introduce the appropriate provisions into workplace documentation:
In cases where there is no collective agreement, nor the obligation of implementing renumeration regulations, information about resigning from ZFŚS and paying out holiday benefits should be delivered to employees in a manner that is customary within a workplace no later than January 31st. It is also crucial for employees be informed about this fact during each calendar year.
Pursuant to art. 21 of the Act on Vocational and Social Rehabilitation and Employment of People with Disabilities, contribution to PFRON must be paid by employers who hired at least 25 people in full-time equivalents. The requirement of employing people with disabilities in accordance with a fixed indicator arises with 25 FTEs, and if an employer does not reach this indicator, there is a requirement of making contributions to PFRON. This indicator is 6%, or 2% in some instances.
The obligation to submit the report concerns corporate income taxpayers, whose:
Public entities that are medical entities are exempted from submitting the report.
The report on payment terms in commercial transactions contains:
The only way to submit the report is in electronic form.
Important
Failure to submit the report is punishable by a fine of up to PLN 5,000. In case of failure to submit the report on time, all members of the management board shall be held responsible.
Should you be subject to the above reporting obligations, we will be happy to assist you in this regard.
VAT warehousing may constitute a significant simplification of VAT collection and settlement, particularly for entities operating in the area of international trade of goods. This procedure provides for the application of the 0% VAT rate for goods entering a VAT warehouse.
Supply of goods and intra-Community acquisition of goods subject to the VAT warehousing procedure shall be subject to taxation at the rate of 0% VAT. The supply of goods subject to VAT storage procedure shall be subject to taxation at the 0% VAT rate if all of the following conditions are jointly met:
The provision of services in a VAT warehouse, directly related to the stored goods, e.g. sorting, reloading, packaging, maintenance of goods in proper condition or temperature, conservation of goods, and other services shall also be subject to taxation at the 0% VAT rate.
"VAT warehouse" shall mean a customs warehouse as referred to in Article 242(1) of the Union Customs Code (Type I customs warehouse) - excluding excise goods (excise goods will not be subject to the VAT warehouse procedure), operated by a "VAT warehouse operator" who has been granted a VAT warehouse license. I. VAT warehouse records.
A registered VAT taxable person who has been active for at least 12 months will be entitled to use the VAT warehouse procedure, once he has been granted authority to use the procedure.
Goods declared for the VAT warehousing procedure and entered into the procedure will be deemed to be covered by the procedure.
Goods supplied at the retail stage and goods consumed (including those intended for consumption) in a VAT warehouse may not be placed under the VAT warehouse procedure.
The goods shall be declared for the VAT warehouse procedure by the taxable person authorized to use the procedure.
The VAT warehouse procedure shall be terminated when the taxable person declares the termination of the procedure and the goods are removed from the VAT warehouse.
The VAT warehouse procedure shall also be terminated:
The notification of terminating the VAT warehouse procedure triggers the obligation to pay the VAT due on the goods previously subject to the procedure. The person who causes the goods to cease to be subject to the VAT warehousing procedure will be liable to pay the VAT. In principle, this will be the taxable person - the owner of the goods - who declares the termination of the VAT warehousing procedure and removes the goods from the VAT warehouse.
The VAT due on the termination of the VAT warehousing procedure will be calculated in the declaration (return) on the termination procedure and paid directly to the tax authority at the time of terminating the procedure.
The VAT paid on the termination of the VAT warehousing procedure will, in principle, constitute input tax for the taxpayer and will be deductible in the JPK_VAT with the declaration.
Alternatively, the termination of the VAT warehousing procedure will be able to be fully accounted for in the JPK_VAT with the declaration (output and input tax). In this case, the removal of goods from the warehouse will require the provision of security for the payment of VAT.
The VAT taxable base in the event of terminating the VAT warehousing procedure shall be the value of the taxable base of the supply of goods or intra-Community acquisition of goods to which the 0% tax rate was applied when the goods were placed under the VAT warehousing procedure. The taxable base will be increased by the value of any services provided in a VAT warehouse, subject to a 0% rate.
The final solution will be presented by the Ministry of Finance at a further stage of work on the amendments.
Deadline for preparing the Local File - by the end of the 10th month following the end of the fiscal year.
Deadline for preparing and submitting transfer pricing information (TPR form) - by the end of the 11th month following the end of the fiscal year.
Deadline for submitting the Local File by the taxpayer at the request of the tax authority - 14 days.
Important dates in 2023 - for companies with a fiscal year coinciding with the calendar year
| 31.03.2023 | Deadline for preparing the Master File for 2021 Submission of CIT-8 (transfer pricing adjustment information) Submission of ORD-U (be aware of possible exemptions) Submission of CBC-P (for 2022) |
| 31.10.2023 | Deadline for preparing the Local File and benchmark/ compliance analyses |
| 31.11.2023 | Deadline for submitting TPR form (with a market-price clause - no need to submit a statement as in previous years) |
| 31.12.2023 | Deadline for preparing the Master File and submission of CBC-R for 2022 |
Preparation of the TP statement as a separate document was abolished and the modified content of the statement was transferred to information on transfer pricing (TPR-C/TPR-P). The new TP-R forms (containing the statement) are not yet available.
In the submitted statement, the taxpayer will declare that the local transfer pricing documentation has been prepared in accordance with the actual state, and the transfer prices covered by the documentation are determined on terms that would be agreed upon between unrelated entities.
The taxpayer is obliged to submit the TPR form to the competent Head of the Tax Office, and not to the Head of the National Revenue Administration as it was before.
The TPR form with a market-price clause should be signed by the head of the entity, and in case the entity is headed by several members, by a distinguished person who is part of the management body. It is not permissible to sign this information through a proxy, except for a proxy who is a lawyer, legal adviser, tax advisor or statutory auditor.
TP-R is submitted on the basis of data contained in the local documentation, if the taxpayer was obliged to prepare the documentation.
Who is responsible for submitting the TP-R form?
The proxy must have the power of attorney to sign the declaration submitted by means of electronic communication UPL-1.
important
No obligation to submit ORD-U form for taxpayers who are obliged to submit TPR form and do not carry out transactions with tax havens.
From January 1st, 2023, the reference to indirect transactions has been removed (due to their complete elimination). At the same time, a new exception was added in relation to Art. 11k of the CIT Act.
The provision (submission of an ORDU) does not apply to entities obliged to prepare information on transfer pricing, excluding entities obliged to prepare information on transfer pricing that carry out controlled transactions in a given tax year, referred to in Art. 23 in sec. 2a of the PIT Act or art. 11k sec. 2a of the CIT Act.
The obligation to submit an ORD-U arises in the case of:
In the case of an entity whose related entity has its registered office in a tax haven and with which it enters into mutual controlled transactions, this entity cannot take advantage of the exemption and will be required to submit both the TPR and the ORD-U.
Possibility of refraining from preparing a comparative analysis for a specific group of entities
The amendment assumes the possibility of not preparing benchmark and compliance analyses for:
Micro-entrepreneur - an entrepreneur that met all of the following conditions in at least one of the last two financial years:
Small entrepreneur - an entrepreneur that met all of the following conditions in at least one of the last two financial years:
These amounts are converted into polish zlotys at the average exchange rate announced by the National Bank of Poland on the last day of the financial year selected to determine the status of the entrepreneur.
In the case of controlled transactions with an entity which has its place of residence, registered office or management board in the territory or in a country applying harmful tax competition or a foreign permanent establishment located in the territory or in a country applying harmful tax competition, the documentation threshold is:
The catalogue of exemptions from the obligation to prepare local file documentation has been expanded for:
The exemption will apply to re-invoices, provided that when making them:
The tax authority has the right to examine the market value of transactions between related parties regardless of the question of whether the obligation to prepare transfer pricing documentation arises.
Important
According to the introduced changes, the value of the transaction is:
The transaction value should not include VAT if it is neutral for the taxpayer.
If this tax is not neutral, the value of the transaction should include it.
Important: in the case of taxpayers who do not have the full right to deduct VAT, the thresholds will be lowered.
The arm's length condition will be met in the case of gratuitous/partially paid services, when the market revenue on this account is recognized.
The obligation to confirm the transfer pricing adjustment in the tax return has been waived.
It is allowed to use an accounting document (and not only a statement) to confirm that the adjustment was made by the other entity.
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The company inquired whether after it’s merger pursuant to art. 44c of the Accounting Act in 2021, it may, as of 2022, opt for lump-sum taxation on income of capital companies (Estonian CIT), by submitting in 2021 a notification on the intent to enter the Estonian CIT regime while meeting all conditions of the CIT Act, and without reason for the exclusion from this method of taxation. The tax authorities claimed that the company which plans to merge in 2021 with a limited partnership undergoes the exemption referred to in art.28k sec. 1 pkt. 5 letter a of the CIT Act, i.e. the company many not enter the Estonian CIT system in 2021.
The company contended that the transitional provision of Art. 9 of the Act from November 29, 2020, amending the Corporate Income Tax Act and several other acts, which does not contain the condition implying that taxation on income should start in 2021, should be applied in their case. Hence, it is wrong to assume that the condition for opting for Estonian CIT is both the submission of the ZAW_RD in 2021, and the taxation of income with a lump sum on income of capital companies during 2021.
In matters raising interpretation doubts, it is worth referring the case in the form of a request for individual intepretationns, or for consideration by administrative courts.
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The regulations indicate new deadlines for settling and paying tax:
Additionally, on March 21, 2023, the Regulation of the Minister of Finance from February 16, 2023, amending the Regulation on tax information (Journal of Laws 2023, item 422) came into force, thereby extending the deadline for submitting information to the tax authority on agreements concluded with non-residents (i.e., the ORD-U form) for the previous three months after the end of the tax year for which the form is submitted for up to eleven months. This concerns taxpayers whose tax year began on January 1, 2022.
Consequently, the deadline for submitting the ORD-U form is November 30, 2023.
Pursuant to the Act amending the Corporate Income Tax Act and certain other Acts from October 7, 2022 (Journal of Laws 2022.2180), the obligation to prepare the ORD-U form will not apply to entities obliged to prepare TPR-C information based on art. 23zf sec. 1 of the PIT Act and art. 11t sec. 1 of the CIT Act, unless they contain controlled transactions with entities from so-called tax havens, or with foreign establishments located in the territory or in a country applying harmful tax competition.
Unfortunately, the Minister of Finance did not decide to extend deadlines for settlements consistent with the following:
The deadline for submitting the aforementioned information is March 31, 2023.
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Essential information emerging from the new draft:
You can read the draft here.
In practice, Article 15(6) of the CIT Law excluded amortization of buildings for tax purposes in case of real estate companies which value buildings at what is known as fair value, and thus do not amortize them for balance sheet purposes. Such an interpretation has been confirmed by the Director of the Tax Chamber in numerous individual interpretations issued in 2022.
In the individual interpretation issued on April 25, 2022 sig. 0111-KDIB1-1.4010.107.2022.2.MF the Director of the Tax Chamber claimed: “Since the value of the amortization allowance in the case in question reaches "0", as the Company does not depreciate the asset under the accounting regulations, then - given the wording of the legal standard in question, the Company is not entitled to recognize amortization allowances on fixed assets included in Group 1 of the Classification as deductible expenses under the amended provision of Article 15(6) of the CIT Law.”
Important: In consequence of introducing this provision, real estate companies which have not changed the method of real estate valuation do not include amortization allowance on the initial value of property as tax deductible costs.
In the first weeks of February, the first rulings of the Provincial Administrative Court in this matter were issued. As it turns out, the Provincial Administrative Courts in Warsaw and Poznan disagreed with the interpretation of the provision made by the the Director of the Tax Chamber (rulings: sig. III SA/Wa 1788/22, III SA/Wa 2755/22, III SA/Wa 2756/22, sig. I SA/Po 752/22 and sig. I SA/Po 789/22, I SA/Po 790/22, I SA/Po 795/22).
Contrary to the tax authorities, the Provincial Administrative Court decided that the tax depreciation restrictions do not apply to those taxpayers who value property at fair value for balance sheet purposes (they do not make amortization allowance for balance sheet purposes). This means that real estate companies which have chosen this method of presentation and valuation of assets, may perform amortization write-offs from real estate on rules applicable from the 31st of December 2021.
Given the number of individual interpretations and the relatively wide range of entities that may be affected by the restriction on depreciation for tax purposes, more Provincial Administrative Courts rulings can be expected in the near future. It should be expected, however, that the issue will ultimately be decided by the Supreme Administrative Court.
Favorable judgments of the Provincial Administrative Courts give hope for a favorable ruling of the Provincial Administrative Courts, and then a positive decision for taxpayers before the Supreme Administrative Court.
Accordingly, real estate companies that did not depreciate buildings for tax purposes in 2022 can expect a favorable ruling before the Provincial Administrative Court in their own case.
Should you need to discuss this topic, please contact:
Download PDF file here.
The directive is the latest instrument of the European Union for combatting VAT fraud. The new directive is closely tied to the CESOP Regulation (Council Regulation (EU) 2020/283 of 18 February 2020 amending Regulation (EU) No 904/2010 as regards measures to strengthen administrative cooperation in order to combat VAT fraud).
The CESOP Regulation provides for creation of a Central Electronic System of Payment information (CESOP) for the EU, to which member states will provide data concerning payees and payment transactions.
This solution supplements the VAT E-Commerce Package introduced in 2021 and is one of the European Commission’s measures to combat VAT fraud in e-commerce.
As a reminder, the VAT E-Commerce Package, which was introduced in Poland in July 2021:
To tighten the VAT E-Commerce Package, the Commission took steps to enable the monitoring of cross-border payments, with the aim of minimizing VAT abuses in e-commerce.
Member states are not in a position to independently obtain information from third parties (e.g. payment service providers) needed for control of cross-border suppliers of goods and services subject to VAT, ensure proper application of the VAT e-commerce regulations, and solve the problem of VAT fraud in the e-commerce sector. Thus cooperation between member states is vital.
Directive 2020/284 was adopted to provide a legal basis enabling the collection of this data. The member states are required to implement the directive by the end of 2023.
This data will be submitted by providers of cross-border payment services to the national system in the form of an xml file, prepared in the manner specified by the XSD scheme. Then the file will be forwarded to the Central Electronic System of Payment information (CESOP).
Payment service providers located in the EU will be required to maintain and submit records after the end of each calendar quarter if both of the following conditions are met:
The record-keeping obligation applies to payment service providers within the meaning of the Payment Services Directive (2015/2366—PSD2), or a natural or legal person benefiting from an exemption under Art. 32 of PSD2.
Payment service providers are thus defined for this purpose (under the relevant sections of PSD2) as:
Important! The record-keeping obligation does not apply to payment service providers located outside the territory of the European Union, as these entities are not covered by PSD2. For purposes of complying with the record-keeping obligation, it should be recognized that a payment service provider is located in a member state if its BIC or other identifying code corresponds to that member state.
Not all payment services will be reported under this scheme. The only payment services that will be subject to reporting are those leading to a cross-border transfer of funds to payees (or payment service providers acting on their behalf), when the payer is located in a member state and the payee is located in another member state or in a third country (domestic payments will not be covered by the new regulations).
The payment service provider will have to keep records on each payee, in order to provide the records to the tax administration, only when the total number of payments received by a payee exceeds the threshold of 25 payments in a calendar quarter.
The VAT Directive sets the rules which payment service providers must apply to determine the location of payers and payees. These rules do not refer to determination of the place of taxation (e.g. registered office or residence), but to the location of payees and payers for the purpose of applying the record-keeping obligation.
A payer is deemed to be located in the territory of the member state corresponding to the IBAN of the payer’s payment account or any other identifier which unambiguously identifies, and gives the location of, the payer. In the absence of such identifiers, the payer’s location is based on the BIC of the payment service provider acting on behalf of the payer (or other code identifying the institution). The same rules apply to determining the location of the payee.
The records to be kept by payment service providers shall contain information identifying the payment service provider and the payee, the details of the cross-border payments received by the payee (e.g. amounts and dates), and any related payment refunds.
Payment service providers are required to keep these records for a period of three years from the end of the year in which the payment was made.
The records shall be made available no later than the end of the month following the end of the quarter to which the information pertains, using a standard electronic form. As a rule, the payment service provider will submit the records in the member state where it has its registered office.
Nevertheless, year after year, with further changes in regulations, the importance of properly fulfilling the documentation obligation grows. What is there to look out for in terms of transfer pricing in 2023? According to amendments in the Fiscal Penal Code, entrepreneurs will face new sanctions for a failure to comply with documentation obligations concerning transfer pricing. These changes implement higher fines for the lack of documentation or its incorrect preparation.
The legislator has increased sanctions in the Fiscal Penal Code for not fulfilling transfer pricing obligations. The sanctions apply to such actions as:
For this type of offence, the taxpayer is liable to a fine of up to 720 daily rates. Late preparation of transfer pricing documentation is subject to a fine of up to 240 daily rates. Stricter sanctions are aimed at disciplining taxpayers into complying with obligations arising from transfer pricing regulations.
Pursuant to the applicable provisions of the Fiscal Penal Code, whoever fails to submit transfer pricing information to the competent tax authority (in a TPR form) or, upon submission, provides data inconsistent with the local transfer pricing documentation or with the actual state, is subject to a fine of up to 720 daily rates. Anyone who, contrary to the obligation, submits information after the deadline is subject to a fine of up to 240 daily rates.
In case of a minor act, the authority may impose a fine for a fiscal offence.
Important: Please note that from 2023, taxpayers will no longer submit a separate statement on the preparation of transfer pricing documentation and on the arm's length nature of prices - it will be merged with the TPR form (previously it was a separate document). You can read more about changes in transfer pricing in 2023 in this article.
Fines are levied by imposing a penalty amounting to multiple daily rates. These are regulated by Art. 23 § 3 of the Fiscal Penal Code, according to which a daily rate cannot be less than 1/30th of the lowest monthly salary, nor can it exceed its four-hundredfold.
From January 1st 2023, the minimum gross salary in Poland increased from PLN 3010 to
PLN 3490. In consequence, with the beginning of 2023, the daily rate oscillates between
PLN 116,33 and PLN 46 533,33 (in 2022 it oscillated between PLN 100,33 and PLN 40 133,33).
Fines for crimes and offenses related to transfer pricing documentation are as follows:
Important: From 2023, the taxpayer is obliged to submit the TPR form (for 2022) to the competent head of the tax office, and not to the head of the national revenue administration as it was before.
Information on transfer pricing (including the statement contained therein) is signed by the head of the unit, i.e., a member of the management board or other governing body, and if the entity is managed by a body with multiple members - a designated person who is part of this body. The information cannot be signed by a holder of the power of attorney, with the exception of a holder of the power of attorney who is a solicitor, legal counsel, tax advisor or statutory auditor. Designating someone who comprises the multi-member entity to sign information on transfer pricing does not free other members of that body from liability for a failure to submit such information.
In case of a failure to submit the TPR form, or providing data that is inconsistent with the local transfer pricing documentation or with the actual state (or failure to submit it on time), these people are subject to penal fiscal liability specified in Art. 80e of the Fiscal Penal Code in the wording effective from 1st January 2022.
In the case of failure to prepare local transfer pricing documentation (or failure to submit it on time), failure to attach group documentation or preparation of transfer pricing documentation inconsistent with the actual state, fiscal penal liability referred to in Art. 56c of the Fiscal Penal Code in the wording applicable from 1st January 2022, may be incurred not only by persons who are members of the management body of the entity, but also by persons dealing with the company's financial matters (e.g. chief accountant).
It results from Art. 9 § 3 of the Fiscal Penal Code, according to which tax crimes or fiscal offenses are the responsibility of the perpetrator, but also the one who, on the basis of a legal provision, decision of the competent authority, contract or actual performance, deals with economic matters, in particular financial matters, of a natural person, legal person or an organizational unit without legal personality.
The sanctions specified on the basis of the provisions of the Fiscal Penal Code are not the only ones that a taxpayer may face for a failure to comply with the documentation obligation.
Additional tax liabilities (for the company) are regulated in Art. 58b and 58c of the Tax Ordinance and may have three different rates:
Pursuant to the provisions, if the taxpayer completes the incomplete tax documentation within the time limit indicated by the authority, not longer than 14 days, the condition for lack of documentation is waived. However, this documentation must be complete and meet all formal requirements specified by the legislator.
What’s important, an additional tax liability cannot be imposed on a natural person who is responsible in this case for a fiscal crime or fiscal offence.
If you have any questions or concerns regarding listed information, please contact us!
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As assured by the Ministry of Finance, the draft includes solutions which simplify and expedite VAT settlement.
Changes include:
The planned changes to the SLIM VAT3 package are set to enter into force on April 1, 2023.
You can read the entire bill here on the Government Legislation Center website.
The beginning of a year is the moment when taxpayers not only begin to annex contracts, but also make their first analysis of transfer pricing adjustments.
Transfer pricing adjustment is an adjustment which consists of making a transaction marketable on the date of its conclusion. The reason for the adjustment is the need to compensate for the expected level of profitability due to the existence of previously unforeseeable circumstances. Making a transfer pricing adjustment must be preceded by specific circumstances that could not be foreseen when planning transfer prices for a given year. These circumstances include:
The occurrence of COVID-19, as well as its aftermath, does not automatically mean that there are grounds for making transfer pricing adjustments to all controlled transactions. Only an individual examination of each controlled transaction will help in determining whether we are dealing with a transfer pricing adjustment.
According to the statutory definition - a structured invoice (hereinafter also: e-invoice),
is an invoice in electronic form, issued via the National e-Invoice System (KSeF), with an assigned number to identify the invoice in the system.
In practice, e-invoices are new types of invoices, which do not have a traditional form
(paper or electronic file, such as PDF). These invoices have the form of a file in XML format, generated in accordance with the logical structure published by the Ministry of Finance - the so-called XSD Scheme. An e-invoice is issued by sending it to the KSeF, which verifies its formal correctness and, after positive validation, assigns it a unique number.
It is the assignment of this number that is tantamount to: the issuance of an invoice entering legal circulation, at which point it also becomes available for download by the recipient.
Important
In practice, e-invoices are produced in the aforementioned electronic form through the taxpayer's financial and accounting software, which should also provide the ability
to send the invoice to KSeF. Sending and downloading of e-invoices is provided by
a publicly available API.
Under the proposed regulations, VAT taxpayers with a registered office or permanent place of business in Poland will be required to issue invoices in structured form.
The Ministry of Finance announced changes to KSeF assumptions in the following regard:
These regulations are scheduled to come into force on July 1st, 2024, but it is highly recommended to adjust your organization to these requirements as of today.
KR Group supports its current and future clients in these preparations, offering both substantive and technological support.
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