IC&Partners Poland S.A. - Newsletter October 2021
Vouchers for digital technologies
Micro, small and medium-sized
enterprises can request a voucher from PARP to finance a project related to the
purchase and implementation of digital technologies that allow companies to
operate during an infectious disease epidemic. The costs of the project cannot
exceed PLN 300,000 and the company must finance at least 15% of the costs from
its own resources. The funding will be used to pay for programmers' services
and the purchase of ready-made software. The new digitization solution is
expected to bring about a change in the company's production, service delivery,
organization or product change. It is also possible to obtain co-financing for
a significant improvement of the process already operating in the company.
Electronic invoices from 1st
October 2021
From October 1st a new electronic invoice system is available on a trial basis. From January 1st, 2022, entrepreneurs will be able to use the system voluntarily and from January 1st, 2023, it will be mandatory for all entrepreneurs to issue structured invoices. The new electronic invoices are in fact structured files, created according to a standard imposed by the Ministry of Finance, which entrepreneurs will issue through a special government platform that will collect all electronic invoices. An invoice issued in this way will go not only to the supplier (who will be able to download the file from the platform), but also to the tax office. Access to the platform will be granted to every entrepreneur - after authentication via ePUAP or electronic signature. If the entrepreneur wants an accountant or accountant to do it, he will have to authorize a chosen person. Entrepreneurs who issue and collect invoices through the government platform will be able to count on VAT refunds within 40 days.
Payments for purchases in a company
The Ministry of Finance further
restricts cash transactions: as of January 1st, 2022, an
entrepreneur will not be able to pay cash for purchases exceeding PLN 8,000, if
he wants to include that expense in business costs. Furthermore, in the case of
invoices for an amount exceeding 8 thousand PLN, the entrepreneur must, if he
has an MPP annotation, pay it using split payment and make a transfer to an
account in the list of VAT payers (i.e., in the so-called list white taxpayers'
VAT). If he doesn't, he won't be able to recognize the expense as a deductible
cost.
Internal release and transfer of
funds from the VAT account
Part of the changes, which came into
effect from October 1st as part of the SLIM VAT 2 package, concern,
among other things, the VAT account. The new provisions allow the taxpayer to
make the "internal transfer" or transfer funds from a VAT account in
one bank to a VAT account held in another bank. However, this procedure will
still be carried out at the request of the taxpayer and will require the
issuance of the permit by the head of the tax office.
Changes to Withholding Tax
Regulations
Under the current legislation (the
application of which has been postponed to January 1st, 2022), when
paying interest, dividends, royalties or remuneration for certain intangible
services, the amount of which to the same taxpayer in total exceeds PLN 2
million in a tax year, senders are usually obliged to first withhold the tax at
the rate of 20% or 19%, depending on the type of payment, and only then can the
taxpayer (or the sender himself) request a refund of the tax paid (the
so-called "pay and refund" mechanism). The payer can benefit from a
tax exemption or a reduction in his rate if:
· he submits a declaration stating
that he is in possession of the documents required for the tax exemption or
reduction
· he obtains an opinion from the tax authority on the application of the tax exemption; however, this opinion currently cannot be issued with regard to preferences deriving from double taxation treaties.
The changes envisaged in the Polski
Ład bill aim to restrict the scope of the "pay and refund" mechanism
exclusively to payments of a passive nature, including, inter alia, interest,
royalties and dividends (thus excluding payments for so-called intangible
services), paid to related entities that are not Polish tax residents. Payments
for intangible services, not covered by the pay and refund mechanism, will
therefore not be included in the PLN 2 million payment limit beyond which the
mechanism is applicable.
The minimum income tax in the new
Polski Ład project
The government program envisages,
among other things, the introduction of a new tax, which must constitute a minimum
income tax for Polish corporations and Polish branches of foreign entrepreneurs
who do not demonstrate taxable income in Poland.
The tax will be applied if the share
of income in the company's income is 1% or less, or if a loss is indicated in
the annual return and therefore the CIT tax is not paid.
Taxpayers will be excluded from
paying the minimum tax:
• in the first three fiscal years;
• if shareholders are exclusively natural persons and who have no interests in other entities;
• if they pay the Estonian CIT;
• with a recorded annual decrease in revenue of at least 30%;
• financial companies.
It is also planned to exclude from
the new tax entities in certain sectors (e.g., mining, energy or aviation) with
a specific business profile, where a low level of profitability is not caused
by tax evasion.
Vouchers for digital technologies
Micro, small and medium-sized enterprises can request a voucher from PARP to finance a project related to the purchase and implementation of digital technologies that allow companies to operate during an infectious disease epidemic. The costs of the project cannot exceed PLN 300,000 and the company must finance at least 15% of the costs from its own resources. The funding will be used to pay for programmers' services and the purchase of ready-made software. The new digitization solution is expected to bring about a change in the company's production, service delivery, organization or product change. It is also possible to obtain co-financing for a significant improvement of the process already operating in the company.
Electronic invoices from 1st October 2021
From October 1st a new electronic invoice system is available on a trial basis. From January 1st, 2022, entrepreneurs will be able to use the system voluntarily and from January 1st, 2023, it will be mandatory for all entrepreneurs to issue structured invoices. The new electronic invoices are in fact structured files, created according to a standard imposed by the Ministry of Finance, which entrepreneurs will issue through a special government platform that will collect all electronic invoices. An invoice issued in this way will go not only to the supplier (who will be able to download the file from the platform), but also to the tax office. Access to the platform will be granted to every entrepreneur - after authentication via ePUAP or electronic signature. If the entrepreneur wants an accountant or accountant to do it, he will have to authorize a chosen person. Entrepreneurs who issue and collect invoices through the government platform will be able to count on VAT refunds within 40 days.
Payments for purchases in a company
The Ministry of Finance further restricts cash transactions: as of January 1st, 2022, an entrepreneur will not be able to pay cash for purchases exceeding PLN 8,000, if he wants to include that expense in business costs. Furthermore, in the case of invoices for an amount exceeding 8 thousand PLN, the entrepreneur must, if he has an MPP annotation, pay it using split payment and make a transfer to an account in the list of VAT payers (i.e., in the so-called list white taxpayers' VAT). If he doesn't, he won't be able to recognize the expense as a deductible cost.
Internal release and transfer of funds from the VAT account
Part of the changes, which came into effect from October 1st as part of the SLIM VAT 2 package, concern, among other things, the VAT account. The new provisions allow the taxpayer to make the "internal transfer" or transfer funds from a VAT account in one bank to a VAT account held in another bank. However, this procedure will still be carried out at the request of the taxpayer and will require the issuance of the permit by the head of the tax office.
Changes to Withholding Tax Regulations
Under the current legislation (the
application of which has been postponed to January 1st, 2022), when
paying interest, dividends, royalties or remuneration for certain intangible
services, the amount of which to the same taxpayer in total exceeds PLN 2
million in a tax year, senders are usually obliged to first withhold the tax at
the rate of 20% or 19%, depending on the type of payment, and only then can the
taxpayer (or the sender himself) request a refund of the tax paid (the
so-called "pay and refund" mechanism). The payer can benefit from a
tax exemption or a reduction in his rate if:
· he submits a declaration stating that he is in possession of the documents required for the tax exemption or reduction
· he obtains an opinion from the tax authority on the application of the tax exemption; however, this opinion currently cannot be issued with regard to preferences deriving from double taxation treaties.
The changes envisaged in the Polski Ład bill aim to restrict the scope of the "pay and refund" mechanism exclusively to payments of a passive nature, including, inter alia, interest, royalties and dividends (thus excluding payments for so-called intangible services), paid to related entities that are not Polish tax residents. Payments for intangible services, not covered by the pay and refund mechanism, will therefore not be included in the PLN 2 million payment limit beyond which the mechanism is applicable.
The minimum income tax in the new Polski Ład project
The government program envisages, among other things, the introduction of a new tax, which must constitute a minimum income tax for Polish corporations and Polish branches of foreign entrepreneurs who do not demonstrate taxable income in Poland.
The tax will be applied if the share of income in the company's income is 1% or less, or if a loss is indicated in the annual return and therefore the CIT tax is not paid.
Taxpayers will be excluded from paying the minimum tax:
• in the first three fiscal years;
• if shareholders are exclusively natural persons and who have no interests in other entities;
• if they pay the Estonian CIT;
• with a recorded annual decrease in revenue of at least 30%;
• financial companies.
It is also planned to exclude from the new tax entities in certain sectors (e.g., mining, energy or aviation) with a specific business profile, where a low level of profitability is not caused by tax evasion.