- 17% PIT for all taxpayers from 1st October 2019?
- Small entrepreneurs without temporary VAT regulations
- Explanation by Ministry of Finance concerning reliefs on buying new cash registers
- Transfer pricing information, statement concerning local file preparation
- Ministry explains how to use IP Box relief
- There won’t be higher VAT rate on fruit drinks
- Business Breakfast – 18.09.2019 – VAT 2020
1. 17% PIT for all taxpayers from 1st October 2019?
On 31st July 2019 a draft law concerning inter alia PIT rate decrease (from 18% to 17%) had its first reading in Polish Parliament.
The decrease implies that when tax base does not exceed 85 528 PLN limit, a natural person is obliged to pay 17% PIT, whereas the excess will still be subject to 32% PIT.
As it turns out from the justification, it is the next step forward leading to decrease of tax wedge and reducing tax burdens for particular PIT taxpayers.
Decreased tax rate (17%) shall be applied for incomes obtained from 1st October 2019. What is also important, because of the date of entry into force of this regulation, annual tax settlement for year 2019 shall be done with application of a separate tax scale with the lowest rate of 17,75% – this information is included in temporary regulations.
2. Small entrepreneurs without temporary VAT regulations
On 1st September 2019 new regulation broadening the catalogue of taxpayers who will not have a right to a subjective exemption shall come in force (regulation is on the very last stage of processing). This exemption regards entrepreneurs whose net sales value in the preceding year did not exceed 200.000 PLN.
Excluded from the catalogue were the taxpayers making shipments of car vehicles’ or motorcycles’ parts, taxpayers delivering RTV and household appliances through internet or phone sale or any other form of sale which requires remote communication from the parties and also taxpayers dealing with debt collection, including factoring.
Changes concern particular categories of goods which are often exposed to tax frauds, tax avoidance, for example when new phones are being sold as second-hand ones.
3. Explanation by Ministry of Finance concerning reliefs on buying new cash registers
In tax explanations from 11th July 2019 “Relief on purchase of on-line cash registers” (https://www.podatki.gov.pl/media/5129/obja%C5%9Bnienia-podatkowe-z-11-lipca-2019-r-ulga-na-zakup-kas-rejestruj%C4%85cych-on-line.pdf) there is precise information included on which taxpayers will be able to deduct from VAT tax a relief – sum spent on a cash register. It is valid only by the purchase of an on-line cash register. Any other type won’t be taken into account. Deduction will amount to 90% of the net price, at the same time no more than 700 PLN (amount remained unchanged) – provided that the total amount due for the cash register is settled.
The explanations describe precisely how the given categories of taxpayers: active, flat-rate, exempted, obliged to cash registers’ exchange should use the relief.
Ministry of Finance explains which declaration ought to be used, what the deadline is, how to calculate the relief (also examples), which documents should be submitted.
In the case of the taxpayers obliged to cash registers’ exchange there are also indicated the entities concerned and period of time when it is required.
4. Transfer pricing information, statement concerning local file preparation
Within the end of the ninth calendar month after the end of the previous fiscal year, CIT taxpayers are obliged to submit documents concerning transactions with related entities.
First of the documents mentioned above is a transfer pricing information – it should be submitted on the new form, TPR (before these were CIT/TP and PIT/TP). Minister of Finance has recently published the structures of the electronic TPR documents reporting year 2019 – they are available on Ministry’s website: https://www.gov.pl/web/finanse/schema-tpr
The rule is, that CIT taxpayers will submit first TP information on TPR-C form for transactions made in 2019. Nevertheless, according to temporary regulations, if the taxpayer decides to prepare TP documentation for 2018 in accordance with regulation which are in force from 1st January 2019 then consequently TP information should also be submitted on the new TPR-C form.
The other document which should be submitted within the given deadline is a statement about preparing a local file. Subject statement should refer to controlled transactions which are encompassed by the obligation of local file documentation.
First statement in accordance with a new template (including statement about setting market values in transactions with related entities) needs to be submitted for year 2019 but in year 2020. Nevertheless, taxpayers have a right to choose which regulations they are more willing to comply with in reference to year 2018 – with these in force before 1st January 2019 or with the amended ones. Consequently, if the taxpayer chooses the amended regulations then they should also prepare and submit subject statement in accordance with a new form in reference to transactions from 2018.
5. Ministry explains how to use IP Box relief
On 15th July 2019 tax explanations concerning preferable 5% taxation of the incomes obtained by the taxpayers, created through intellectual property rights – so called IP BOX – were published. The preference is targeted at all PIT and CIT taxpayers leading their own business which is classified as a research and development activity and also taxpayers who obtain income from IP sources (patented or protected by another right) only if the income is subject to taxation in Poland. In the case of taxpayers noting income from R&D activity abroad, the possibility of using IP BOX preference is dependent on the way of this particular income’s taxation, taking into account the regulations established in a particular double taxation agreement between Poland and a country where the income is obtained.
From the quoted regulations it follows that the taxpayer cannot make use of B+R relief and 5% taxation by the same income but the taxpayer can take advantage of both B+R relief and the IP BOX but towards different categories of income.
In order to take advantage of the preferable 5% tax rate the taxpayer only has to be the co-owner or a user possessing rights to use IP on the basis of a license agreement. It is not required by the legislator for the entity to be the owner of the rights.
Taxpayers who decide to take advantage of the preferences have an obligation to prepare a separate evidence for IP BOX purposes which includes all financial operations, provides separation of particular IP, calculating incomes, KUP and incomes assigned to each qualified IP.
In the explanation you can also find the cases of expiry or cancellation of the qualified IP which results in the loss of right to preferable 5% taxation.
Link to the tax explanations by Minister of Finance from 15th July 2019: https://www.podatki.gov.pl/cit/wyjasnienia/objasnienia-podatkowe-ip-box/
6. There won’t be higher VAT rate on fruit drinks
According to the draft law concerning VAT and some other laws, 5% rate on fruit drinks with not less than 20% of fruit juice will be restored. Lewiatan association claims that this change will positively influence the consumption, demand for Polish vegetables and fruits and the quality of the content. Otherwise, the consequence of the increased VAT rate in the case of mentioned above drinks would be the change of the structure of drinks made of vegetables and fruits – their stake would decrease for the advantage of cheaper drinks of less nutritional value, as well as the fall in quality of drinks offered on Polish market.
The main purpose of the introduced changes is the simplification concerning complicated VAT rates. In order to correctly set the tax rates, a new solution has been introduced – publicizing a WIS – binding tax information concerning a particular product or service on taxpayer’s request by the head of tax administration office.
7. Business Breakfast – 18.09.2019 – VAT 2020
We have the pleasure to invite you to the Business Breakfast with Polish-Portuguese Chamber of Commerce, Polish-Israeli Chamber of Commerce, Belgian Business Chamber, Polish-Romanian Bilateral Chamber of Commerce and Industry: VAT 2020.
The event will take place at Advicero Nexia premises in Warsaw (Moniuszki st. 1A, 9th floor) on 18th September 2019 from 9:00 am to 11:00 am.
During the Business Breakfast our experts will discuss the following topics:
a) revolutionary changes in the way of setting cross-border transactions
- VAT Quick fixes
- new conditions for applying the 0% rate for intra-community supply of goods
- new regulations regarding chain transactions
- new simplifications for consignment stocks
- planned changes in the scope of settlement of mail order sales
- practical aspects of changes for manufacturing, construction and retail (e-commerce) sectors
b) obligatory split payment
- products and services covered by the obligation (150 groups)
- collective payment of invoices, invoices in foreign currencies and non-Polish suppliers – practical aspects
- impact on liquidity
- sanctions for failing to apply the new regulations
- no possibility of recognition of tax deductible costs if purchase invoices are paid without split-payment
c) “white list” of taxpayers
- new, public register of VAT taxpayers
- information about the company available
- necessity to publicize information about all bank accounts
- repressive sanctions related to the lack of possibility to recognize tax deductible costs if you pay costs to an bank account other than the one indicated in the register
The breakfast will be held in Polish. Participation is free.
Please confirm your attendance by sending ‘Name, Surname, Company name’ to this email: firstname.lastname@example.org.