Tax - page 3

This time, I would like to write a few words about fees that can be frequently encountered in hotel services branch. I mean fees connected with cancelling or “no show” and their calculation on the ground of value added tax (hereinafter referred to as VAT). I would like to draw your attention particularly to the so-called attrition fee, which is a fee for rooms that are booked but eventually not used.

As it usually happens with changes introduced into the tax law, on the quiet and through the back door a significant change is made as for the moment of including the effects of the issued (or received) invoice correction in corporate income tax/personal income tax calculation. Why is this moment so crucial?

Undoubtedly, management of each related entity has to answer a question of whether to prepare tax documentation or choose to rely on luck instead, and a chance of not being summoned by the tax office to submit it. Or, if you have already decided to prepare the documentation, when to do it – during the tax year or after it finishes? Currently, almost each and every income tax control requires submitting TP documentation. One of the most committed errors between 1 January 2013 and 1 July 2014, in the case of  reduction of tax liabilities exceeding PLN 1,000, was lack of TP documentation[1]. This year, tax documentation will also constitute one of tax control priorities (vide The National Action Plan of Tax Administration for 2015).  

The question of collecting civil  law transactions tax (hereinafter: CLTT) on the share capital increase transactions in limited joint-stock partnerships (Polish: SKA) was long open to doubt. In the case of contributions made to SKA for the share capital and simultaneously creating an agio, the problem was to determine the tax base, in other words to answer the question if this was the amount of contribution to the company’s assets or the amount by which the share capital was increased.

Our clients have been recently asking more and more questions about VAT treatment of notices to pay penalty fees and contractual interests for failure to perform provisions of an agreement. Such notices may occur, for instance, when it is necessary to inform counterparties on payment delays. A party who issues a notice, not only charge fees on its issuance, but also settle the tax due for this issuance, including the amount of tax on the invoice. Is this the right thing to do? Since I look at such situations more and more often, I would like to explain in brief how notices to pay shall be settled in respect of VAT.

Full deduction of input VAT from the purchase and use of a vehicle is possible, among others, when a taxpayer uses such vehicle exclusively for own business purposes. To prove that the use of a car is limited only to the abovementioned, the taxpayer must keep a mileage log. And here are the proverbial „stumbling blocks”. Although the VAT Act indicates how such mileage log shall be kept and which specific columns shall it include, the taxpayers concerned see these guidelines differently than tax officials.

From a board member's point of view, an entrepreneur's or that of a foreigner delegated to develop the company's branch in Poland, the subject question is of fundamental meaning. The answer, as is often the case with taxes, is unambiguous. It all depends on how apt you are to take on extra risks and how much spare time you may allow yourself to spend on solving tax riddles…