Newsletter IC&PARTNERS POLAND – 2023-02
Amendment of the Labor Code
The Sejm passed the largest amendment to the Labor Code in years. The introduction of changes was enforced by EU law, but some of the rights, such as extending parental leave, were decided by the government. The new legislation has now gone to the Senate. They are to enter into force - in most cases - 21 days after the announcement. Below are the most important changes:
1. Extended parental leave
The new regulations provide for the extension of parental leave by an additional two months. Its duration will formally increase from the current 32 weeks to 41 weeks. In practice, this extra time will be dedicated to fathers, i.e. it will be lost if they do not use it (days off will not be transferred to the mother). These two additional months will be paid in the amount of 70%. Importantly, the father's right to take leave will not depend on whether the child's mother has it (i.e. whether she is an employee or runs her own business and pays sickness insurance).
2. Overtime and delegation by agreement
An employee raising a child
under the age of 8 will not be allowed to:
- employ overtime or at night,
- include an intermittent working time system (with a maximum 5-hour break during the day)
- delegate outside the permanent place of work.
3. Care leave
The draft provides for the introduction of a 5-day care leave. It will be provided to provide personal care or support to a family member (parents, children or spouse) or to someone who lives with the employee.
4. Exemption from work due to force majeure
Another two additional days
off will be available when taking leave from work due to force majeure in
urgent family matters caused by illness or accident, if the immediate presence
of the employee is necessary, e.g. in the event of floods or other natural
disasters or catastrophes, as well in the event of damage to the house, an
accident of a child at school, a sudden illness of a family member, etc. The
time off - unlike the carer's leave - will be paid, but in the amount of half
the remuneration due. The holidays in question can be used in days (two days a
year) or in hours (16 hours).
5. Longer break at work, up to 30 minutes After the changes, employees
working more than 9 hours a day will gain a second free quarter. If their
working day exceeds 16 hours, they will be entitled to three 15-minute breaks.
6. It will be more difficult to dismiss people on fixed-term employment contracts The new regulations assume
that the employer will have to justify the termination of a fixed-term contract
and consult it with the trade union representing the employee. Currently, such
requirements apply only to the termination of a contract for an indefinite
period. If the said persons appeal against the dismissal to the court (which
will be easier, because the reason indicated by the employer can be
questioned), they will be able to demand reinstatement, and not only
7. New rules for applying contracts for a trial period The maximum duration of the
trial contract will depend on the length of the fixed-term contract that the
company will want to conclude with the employee after the trial period.
Contracts for a trial period may be concluded for a period not exceeding:
• one month - in the case of the intention to conclude an employment contract for a definite period of less than six months,
• two months - in the case of the intention to conclude an employment contract for a definite period of at least six months and less than 12 months,
• three months - in other cases (eg when, after the trial period, the company immediately wants to conclude a contract for an indefinite period).
The first two of these
deadlines can be additionally extended by a maximum of one month. Re-conclusion
of a contract for a trial period with the same employee will be allowed if he
is to be employed to perform a different type of work.
8. New information and training obligations
The amendment to the Labor Code also provides for many minor, detailed changes that are to facilitate the employees' access to reliable information on employment conditions. In addition, the company should inform about the rules for changing from one shift to another (if the company uses shift work) and the employee's right to training, if the employer provides it, in particular about the general principles of the employer's training policy. What is important, if the company has to conduct given trainings at a specific workplace (because, for example, it results from the law or a collective labor agreement), they are to be held at the expense of the employer and, if possible, during the employee's working hours. The time of training outside of the working day will be included in the working time.
9. Improved employment conditions
Once a year, the employee will
be able to apply to the company, for example, for an indefinite or full-time
contract (if he is employed for a definite period or part-time, respectively).
The employer is to - as far as possible - take into account such a request of
the employee. If he refuses, he will have to indicate the reason for his
10. Parents of young children with better protection from dismissal The new regulations clearly
provide that employees will be protected against dismissal not only, for
example, during maternity or parental leave, but from the moment of submitting
an application for such leave to take care of a child.
The regulations will also
protect people demanding transparent employment conditions. They will clearly
indicate that the reason for termination of the contract cannot be:
• requesting information about employment conditions (e.g. about trainings),
• applying for a change in the type of contract or working hours,
• simultaneous, parallel employment in another company (of course, it will still be possible to conclude non-competition agreements).
Slim VAT 3
On January 24th, 2023, the government adopted another package of solutions aimed at facilitating the settlement of tax on goods and services, the so-called SlimVAT 3.
The project provides, among
• increasing the sale value limit for a small taxpayer from EUR 1.2 million to EUR 2 million, which will enable more taxpayers to use the cash accounting method and quarterly VAT settlements.
• resignation from the requirement to have an invoice regarding the WNT when deducting VAT on this account. Therefore, the invoice will not be a formal condition for deducting VAT. As a consequence, the input and output tax on the WNT will always be settled in the same settlement period;
• the possibility of submitting corrections to declarations outside the OSS and IOSS systems directly to the Łódź Tax Office.
• clarification of one general rule regarding the conversion of the foreign currency exchange rate in correcting invoices in plus and minus: basically, the exchange rate used to convert the amount of the correction of the tax base on the correcting invoice is to be the same exchange rate that was adopted for the original settlement.
• As part of the savings in the public finance system, resignation from the obligatory issuance by the tax authorities of decisions on crediting the payment/overpayment/tax refund against tax arrears and late payment interest.
The Ministry of Finance plans
that the SLIM VAT3 package will enter into force on April 1st, 2023.
Meanwhile, in a press release,
the Ministry of Finance has already announced another Slim VAT 4 package. The
details are not yet known. It is known that work on the new package would start
Major tax changes in 2023
• From January 2023, taxation of revenues from private rental will be possible only in the form of a lump sum (they will no longer be taxed on general terms, according to the tax scale);
• Taxpayers who rent residential premises as part of business activity will not be able to depreciate these premises from 2023 and include depreciation write-offs as tax deductible costs;
- The provisions on hidden dividends have been repealed.
• In 2023, the PIT tax scale introduced in 2022 will apply: the tax rate in the first tax bracket will be 12% up to PLN 120,000. PLN and 32% on the surplus over PLN 120,000. zloty. The tax-free amount will be 30,000. zloty;
• From 2023, taxpayers (employees, principals, persons employed under a contract for specific work) will submit all statements and applications to payers (employers) in the manner adopted by a given payer. This means that these documents can be submitted in paper, electronic form or, for example, through the payer's (employer's) HR and payroll system;
• Entry into force of changes in cash payment limits has been postponed. From 2023, it was planned to introduce a new (lower) limit for cash payments in transactions between entrepreneurs (reduction from PLN 15,000 to PLN 8,000) and to introduce a new limit for cash payments made by natural persons not conducting business activity (consumers) to entrepreneurs (20 thousand PLN). However, the entry into force of the new limits has been postponed for a year and they are to apply only from January 1st, 2024;
• In 2023, there were also many previously announced changes in CIT, including:
- The minimum tax has been suspended until the end of 2023 and its structure will change.
- The provisions on Estonian CIT have been clarified.
- The changes will also affect issues related to transfer pricing:
repealing the regulations on indirect haven transactions;
raising the documentation thresholds for direct paradise transactions to PLN 2.5 million for financial transactions and PLN 500,000 for non-financial transactions;
Change of the deadline for
preparing local transfer pricing documentation: by the end of the 10th
month after the end of the tax year and submission of the TPR-C declaration by
the end of the 11th month after the end of the tax year.
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