Tax news - page 4

The Ministry of Finance has published a draft act introducing an obligatory split payment mechanism for certain goods and services. New regulations are supposed to enter into force already as of 1 September 2019. The draft act has been adopted by the Council of Ministers and sent to Sejm.

On the last working day preceding the entry into force of revolutionary solutions in withholding tax, the Minister of Finance once again decided to postpone them. This time, the Ministry of Finance decided that the new regulations on the obligation to withhold tax at domestic rates shall enter into force as of 1 January 2020.

On 12 April, amended VAT, CIT and PIT acts were passed. As of 1 January 2020, more stringent provisions concerning payments for transactions exceeding PLN 15,000 will be in force. Any failure to meet statutory conditions will result in joint and several liability of the purchaser for the vendor’s VAT accounting and denied right to recognise this expenditure as tax deductible. Under the new regulations, foreign entities regitered for VAT purposes in Poland will have to open bank accounts in Poland. New regulations are going to cover limited companies, partnerships and sole proprietorships.

On 15 April 2019, the Act of 4 April 2019 amending the Act on the Exchange of Tax Information With Other Countries and Certain Other Acts (Journal of Laws of 2019, item 694), hereinafter: “Amendment”, was published in the Journal of Laws. The new regulations introduce changes among others in the Country-by-Country Reporting mechanism, hereinafter: “CBC”. This newsletter will give you a summary of the introduced regulations.

The Regulation of the Minister of Finance of 19 September 2018 on declarations of the transport of goods (Journal of Laws, item 1849) has introduced an obligation for consignees and consignors to authenticate the user registered in the Electronic Services Platform of the Customs Service (hereinafter: PUESC) by also providing the entity’s SISC ID, in addition to the login and password, i.e. a 17-digit identification number. This change results from the provisions of Article 9 paragraph 7 of the Act of 9 March 2017 on the Monitoring System for the Road and Rail Transport of Goods (Journal of Laws of 2018, item 2332).

By the end of April 2019, authorisations of simplified VAT accounting procedures issued before the entry into force of the Union Customs Code (UCC) will be re-assessed. The process of obtaining new authorisations will be more restrictive.

The amended Act on Corporate Income Tax introduces a new mechanism for collecting withholding tax, as set forth in Article 26 paragraph 2e of the Act on Corporate Income Tax (i.e. Journal of Laws of 2018, item 1036, hereinafter: the CIT Act).

On 1 January 2019, new provisions of the PIT Act and the CIT Act will enter into force as regards claiming expenses related to passenger cars used for business purposes. They will introduce a major change in the existing rules and principles concerning, among others, capital allowances, determining the tax deductible costs of selling, as well as claiming lease rentals and running costs of passenger cars against tax.

The efforts to make the collection of the value-added tax more effective are an evident tendency in all of the European Union, including Germany. The tax administrations perceive goods coming from outside Europe, mainly from Asian markets, to be a serious problem at present. These vendors often do not pay taxes, which significantly distorts the competition and, what is more, it depletes the budgets of EU countries.

On 1 January 2019, an extensive amendment of the Corporate Income Tax Act (hereinafter referred to as the CIT Act) will enter into force, thus introducing very significant, not to say groundbreaking, rules and principles of collecting the withholding CIT. Reduced rates or exemptions from CIT shall continue to apply to the payment of dividends, interest, royalties and fees for certain services; however, there is a number of new formal requirements to be met.