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Anti-crisis shield in connection with COVID-19 – tax solutions

On 31 March a long-awaited act was announced amending the act on special arrangements related to preventing, counteracting and combating COVID-19, other infectious diseases and resulting states of emergency and certain other acts.

Please find below our selection of crucial regulations regarding tax law.

 

Property tax

  • Municipal councils have been granted authority to exempt for part of 2020 certain groups of business entities whose financial liquidity has deteriorated due to adverse effects of COVID-19 from property tax: on land, buildings and structures related to conducting business activity;
  • Municipal councils may also extend, in case of certain business entities, time limits for property tax instalments payable in April, May and June 2020 until 30 September 2020 at the latest.

Tax Ordinance

  • In case of decisions to postpone or break down tax (tax arrears) into instalments, no extension fee is charged. Additionally, the Minister of Finance has been authorised to refrain – by regulation – from charging interest on tax arrears;
  • The timetable for proceedings and audits governed by the Tax Ordinance has been suspended;
  • The time limit for issuing a ruling in case of applications submitted but not examined before 1 April 2020 has been extended by 3 moths;
  • Deadlines for MDR reporting obligations have been suspended until 30 June 2020.

Common PIT and CIT regulations

  • The deadline for submitting tax information has been postponed until 30 September 2020 for taxpayers whose fiscal year began after 31 December 2018 and ended before 31 December 2019;
  • Taxpayers will be entitled to deduct from their income donations granted between 1 January 2020 and 30 September 2020 with the aim to counteract COVID-19 to institutions listed in the Act, whereas, in case of donations transferred:
    • before 1 May 2020 – the deduction equals 200% of the donation granted,
    • before 1 June 2020 – the deduction equals 150% of the donation granted;
  • The time limit for paying tax on revenue from buildings (the so-called minimum tax) due for March, April and May has been extended until 20 July 2020, provided that:
    • The taxpayer suffered adverse economic effects of COVID-19 in a given month,
    • Revenue generated from business operations was lower by at least 50% compared to the corresponding period in 2019;
  • Debtors have been released from the obligation to increase the tax basis due to the so-called “bad debt relief” in income taxes, provided that:
    • The taxpayer suffered adverse economic effects of COVID-19,
    • Generated revenue was lower by at least 50% compared to the corresponding period in 2019;
  • Small taxpayers who have chosen the simplified method of making advance payments will be entitled to change this method during the year, provided that they suffer adverse economic effects of COVID-19;
  • Eligible costs of R&D activity aimed at developing products necessary for counteracting COVID-19 may be included in the calculation of tax advances;
  • Taxpayers achieving qualified income from qualified intellectual property rights that are used to counteract COVID-19 may apply a 5% rate to the calculation of tax advances;
  • Taxpayers who incurred a loss in 2020 may set it off against the income achieved in the previous year.

VAT

  • Regulations on Binding Rate Information and new tax rate matrix have been postponed until 1 July 2020;
  • The obligation for large enterprises to submit new JPK_VAT files has been postponed until 1 July 2020.

PIT

  • Submission of a 2019 return and payment of tax by 31 May 2020 will be deemed submitted together with the effective so-called “active regret” (voluntary disclosure) specified in Art. 16 of the Fiscal Penal Code;
  • Tax exemption limits for childbirth allowances, holiday allowances and certain other social allowances have been increased;
  • Downtime payments as well as accommodation and meals benefits have been exempt from tax in cases stipulated in the Act on COVID-19;
  • Deadline for remitting tax advances deducted from revenue in March and April 2020
    has been postponed until 1 June 2020 if the withholding agents suffered adverse economic effects of COVID-19.

 

Should you have any questions or wish to discuss the topic further, we encourage you to contact our expert:

Daniel WIĘCKOWSKI
Tax Director
E: ekspert@rsmpoland.pl