Newsletter IC&PARTNERS POLAND – 2022-12
CHANGES IN VAT RATES IN 2023
In accordance with the published regulation of the Minister of Finance of December 2nd, 2022, at the beginning of 2023, reduced VAT rates will apply to selected goods and services. Food products, so-called necessities, listed in item 1-18 of Annex 10 to the VAT Act, i.e. subject to the 5% rate before February 1st, 2022, and then under the anti-inflation shield - until December 31st, 2022, the 0% rate, mainly such as meat, dairy products or vegetables will be subject to zero VAT rate until mid-2023.
The VAT rate on goods used in agricultural production in the period from January 1st, 2023 to December 31st, 2024 will be reduced to 8%.
The regulation also provides for the maintenance of the 0% VAT rate for donations to the Government Agency of Strategic Reserves, healthcare entities, local government units until the end of June 2023, for purposes related to helping victims of the effects of hostilities in Ukraine.
BAD DEBT RELIEF 2023
A new category of VAT payers will be introduced to the VAT Act. VAT group is a group of entities related financially, economically and organizationally, registered as a VAT payer. From January 1st, 2023, related companies will be able to file jointly as one taxpayer. The most important benefit of creating a VAT group is the neutrality of turnover between group members. Since the turnover within the group is not subject to VAT and is not documented with invoices, the need to use the split payment mechanism or verify the contractor in the list of taxpayers also ceases to apply. The taxpayer is the VAT group as a whole, so one collective JPK is also submitted, instead of separate JPK for each entity. Entities that will want to create a VAT Group do not have to have the status of a Tax Capital Group on the basis of CIT. However, they must be linked at the same time financially, economically and organizationally. In the case of a financial relationship, the 50% criterion was adopted. capital share. The point is that one of the taxpayers directly owns more than 50% of the shares or shares in the share capital or more than 50 percent. voting rights in controlling, constituting or managing bodies, or more than 50 percent. right to participate in the profits of each of the other taxable persons who are members of that group. VAT groups can be created in Poland by domestic entities and Polish branches of foreign entities. This solution will be open to any legal form, including small and medium-sized businesses.
From January 1st, 2023, CIT and PIT taxpayers making appropriate increases or decreases resulting from the bad debt relief will no longer be required to include in the tax return the receivables or liabilities related to these increases or decreases. The regulation applies to income (revenue) earned from January 1st, 2023.
SOCIAL SECURITY CONTRIBUTIONS 2023
From January 1st, 2023, the costs of social security contributions, e.g. from the employment relationship in the part financed by the contribution payer, contributions to the Labor Fund, the Solidarity Fund and the Guaranteed Employee Benefits Fund will constitute tax costs in the month for which these receivables are required, provided that the contributions are paid within the time limit resulting from separate regulations.
One of the assumptions of the tax reform introduced as part of the "Polish Deal" is the minimum tax. It was aimed at imposing a levy on CIT taxpayers who show chronic losses or whose income is on the verge of profitability. The provided minimum income tax of 10% of the tax base is dedicated to companies that are Polish residents, as well as tax capital groups. Pursuant to the amendment of October 7th, 2022, the original period of exemption from payment of the minimum income tax from December 31st, 2022 was extended by another year - until December 31st, 2023. The tax base will be calculated according to two methods - to be chosen by the taxpayer. Among others, the following will be exempt from the tax: small taxpayers, taxpayers in bankruptcy, liquidation or subject to restructuring proceedings, taxpayers whose tax profitability in one of the last three tax years exceeded 2%.
CIT ON TRANSFERRED INCOME
Changes to the provisions of the Corporate Income Tax Act introduced by the Polish Governance also include additional fiscal burdens, which are to lead to further tightening of the tax system existing in Poland. Such a new burden is to be the tax on shifted income regulated in art. 24aa of the Corporate Income Tax Act. The solution aims to eliminate the possibility of obtaining a tax advantage through tax schemes aimed at transferring income from intangible assets to a tax jurisdiction with a low effective tax rate. The shifted income tax rate is set at the same level as the basic corporate income tax rate and is 19%.
From January 1st, 2023, in connection with transactions with related entities that are not Polish residents, the costs of services specified in the CIT Act will be subject to shifted income tax, unless the taxpayer proves that one of the conditions excluding taxation does not apply.
PAYMENT GUARANTEES FOR EXPORTERS
KUKE is the official export credit insurance agency, which is the only one in Poland to offer insurance guaranteed by the State Treasury, supporting the expansion of domestic exporters around the world. KUKE provides payment guarantees securing the timely repayment of the exporter's liabilities towards its suppliers in Poland and abroad. The exporter may also secure the repayment of his liabilities towards banks and factoring companies financing invoices issued by his suppliers. When purchasing supplies or services, the exporter may, thanks to the KUKE guarantee, obtain more favorable payment terms, in particular deferred payment (trade credit), from his supplier and secure payment in the amount of 80% of the value of the export. its obligation with the KUKE guarantee. Thanks to the guarantees, the exporter gains an excellent tool for negotiating deliveries on better financial terms with partners from all over the world, including Poland. If a foreign supplier prefers a guarantee from a known local bank, KUKE may counter-guarantee such transactions by securing the exporter's liability.
IC&Partners Poland S.A.
Plac Powstańców Warszawy 2a
Tel: +48 22 828 39 49
Fax: +48 22 827 78 91
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