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Draft amendment to the ordinance on the exclusion of the obligation to collect lump-sum corporate income tax

On December 1, 2023, a Draft Regulation of the Minister of Finance amending the Regulation on Exclusion of the Obligation to Collect Lump Sum Corporate Income Tax was published on the website of the Government Legislation Center.
Tomasz Śliwiński
Senior TAX Specialist

The purpose of the regulation amendment

The draft regulation by the Minister of Finance aims to extend until the end of 2024 exemptions from the obligation to apply the pay & refund mechanism in withholding tax concerning payments made through so-called technical payers for the payment of receivables from securities recorded in securities accounts or collective accounts exceeding the amount of PLN 2 000 000.

The new regulations are set to enter into force on January 1, 2024 and will extend the suspension of the aforementioned regulations by the end of 2024.

The technical payer

Technical payers are entities that maintain securities accounts or omnibus accounts. The obligation to apply the MPR through a technical payer was first exempted by regulation which took effect on July 1, 2022. The exemption was subsequently extended by a decree on December 28, 2022, with effect until December 31, 2023.

The Ministry of Finance indicates that the renewed extension of the exemption in question is related to the difficulties of payers in determining whether there are connections between entities and whether the receivables acquired by the taxpayer exceeded the threshold of PLN 2 000 000.

During the suspension period, statutory changes were and are to be prepared to define the tax collection, which would be adapted to the actual knowledge of the participants in this process and their ability to determine the conditions for the connection and the amount of the receivable.

Additional changes

The entry into force of the regulation also results in the suspension of informational obligations for entities making payments through securities accounts or collective accounts. These obligations involve providing information to entities managing securities accounts or collective accounts about exceeding the amount of PLN 2 000 000  and information about the existence of at least a 7-day relationship between them and the taxpayer prior to making the payment.

Due to the actual impossibility of applying the provisions regarding the use of the pay & refund mechanism in relation to technical payers, further suspension of the application of regulations should be considered beneficial.

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