Below we are sending a synthetic collection of selected tax issues arising from the regulations issued in recent days and the Act of 31 March 2020 amending the Act on special solutions related to preventing, counteracting and combating COVID-19, other infectious diseases and crisis situations caused by them, as well as some other acts (the so-called “special act”), which was passed (and signed by the President).
Should you have any questions, need consultation or assistance in using the instruments proposed under the so-called “shield” – we are at your disposal.
Deadline for filing CIT-8
The deadline for CIT taxpayers to file CIT-8 returns and make tax payments has been extended to 31 May 2020.
In the case of taxpayers who in the year covered by the return earned exclusively tax-free income or for whom income from public benefit activities accounted for at least 80% of the total income earned, the deadlines have been extended to 31 July 2020.
Deferral of the deadline for preparing the 2019 financial statements.
Annual PIT return
The deadline for filing the annual PIT for 2019 and paying the due personal income tax has not been extended. At the same time, in the event that the taxpayer does so after the deadline (which expires on 30 April), but no later than 31 May 2020, this will be considered equivalent to filing an effective active regret.
As a result, the taxpayer will not be held liable for a fiscal offence.
PIT payers – deferred advances
PIT advances collected by payers for March and April 2020 – deferral of their transfer by payers to the US until 1 June 2020.
Applications for relief (deferment, payment in instalments) from taxation/tax arrears
In the event of filing a request for relief (deferment, division into instalments) in the repayment of taxes/tax arrears, the prolongation fee (currently 4%) is waived. Exemption from this fee applies only to taxes constituting the income of the state budget (i.e. PIT, CIT, VAT, excise tax). As regards local taxes and charges (e.g. property tax), the prolongation fee will be charged. (In order to take advantage of the exemption from the prolongation fee, a relevant application must be filed during the period in which the state of epidemics is in force or within 30 days after its revocation).
MF entitled to abandon the collection of interest on tax arrears (although so far it has not issued a regulation in this respect).
The MF may abandon, in whole or in part, the collection of default interest on tax arrears by regulation, specifying in particular the type of tax, the territorial scope of the abandonment, the period in which the abandonment takes place and the groups of obliged persons affected by the abandonment, having regard to the duration of the state of epidemic emergency and state of epidemic in relation to COVID-19 and the effects caused by them.
Suspension of procedural and legal deadlines
During a state of epidemic emergency or a state of epidemic declared due to COVID, the running of procedural and judicial deadlines in, inter alia:
- judicial proceedings, including judicial-administrative proceedings,
- enforcement proceedings,
- criminal fiscal proceedings,
- administrative proceedings,
- proceedings and inspections conducted on the basis of the Act of 29 August 1997. – Tax Ordinance,
- customs and fiscal inspections,
- proceedings in certain cases under the Gambling Act
– do not commence, and those commenced shall be suspended for that period.
Amended rule on loss relief
The possibility of deducting a loss from the year 2020 from the income from the year 2019, if the income in the year 2020 will be lower by at least 50% in relation to the income achieved in the previous year. In turn, having knowledge of the 2020 loss, it will be possible to file a correction of the 2019 return and a one-off reduction of the 2019 income by the amount of the loss, but not more than PLN 5 million. (the loss may also be accounted for under the existing rules).
Deductions of donations related to countering COVID-19
Deductibility from the tax base of donations made between 1 January and 30 September 2020 for countering COVID-19 to certain medical entities, the Material Reserve Agency and the Central Sanitary and Anti-epidemic Reserve Depot.
In the case of a donation made:
a) by 30 April 2020, 200% of the value of the donation is deductible;
b) in May 2020, 150% of the value of the donation is deductible;
c) between 1 June and 30 September 2020, 100% of the value of the donation is deductible.
Payment to an account outside the “white list”
Extended (from 3) to 14 days from the date of the transfer order the deadline for notification of payment to a bank account outside the “white list”.
New limits for certain exemptions in PIT
Increased limits of subjective exemptions in PIT for:
a) allowances paid from the funds of a company or inter-company trade union organisation to employees belonging to that organisation – up to an amount not exceeding PLN 3,000 in 2020 (previously the limit was PLN 1,000);
b) allowances received in the case of individual random events, natural disasters, long-term illness or death from other sources – up to the amount not exceeding PLN 10,000 in 2020 (hitherto the limit of PLN 6,000)
c) cash benefits and benefits in kind which an employee receives in connection with financing social activities referred to in the regulations on the Company Social Benefits Fund (ZFŚS), financed entirely from ZFŚS resources or funds of trade unions – up to the amount not exceeding PLN 2,000 in 2020 and 2021 (previously the limit was PLN 1,000). (it does not apply to vouchers, coupons or other signs entitling to an exchange for goods or services);
d) subsidies from sources other than the social fund and the Company Social Benefits Fund (ZFŚS) for holidays of children and youth up to the age of 18, organised by entities conducting activity in this scope in the form of holidays, summer camps, camps and winter camps, including those combined with education, stays at sanatoriums, in treatment and sanatorium centres, rehabilitation and training centres and treatment and care centres, as well as travel associated with these holidays and stays at treatment – up to the amount not exceeding in 2020 and 2021 the amount of PLN 3,000 (so far the limit was PLN 2,000).
Commercial property tax (“buildings revenue” tax) for March-May 2020 deferred until 20 July 2020.
Deferral subject to:
– a decrease of at least 50% in revenue compared to the corresponding period in the previous year
– suffering negative economic consequences due to COVID-19.
One-off depreciation write-offs – a new opportunity
The possibility to make one-off depreciation write-offs on the initial value of fixed assets that were acquired for the production of goods related to the prevention of COVID-19, (i.e. in particular: protective masks, respirators, disinfectants, medical protective clothing, footwear protectors, gloves, goggles, goggles, disinfectants and hand hygiene products) and were entered into the records of fixed assets and T&E in 2020.
Abandonment of simplified advance payments
Possibility for small taxpayers to resign from the simplified form of paying advance payments for the months March – December 2020. In this case, the basis for calculating advance tax payments will be the income actually generated in 2020. (The taxpayer should inform about the abandonment of simplified advance payments in the annual return for 2020).
R&D tax credit and IP BOX – changes
Possibility to settle the R&D relief already at the stage of advance payments of income tax for taxpayers conducting R&D works, the aim of which is to develop products to counteract COVID-19.
The possibility of applying a preferential rate on account of the so-called IP Box in the amount of 5% when making advance tax payments on income generated from qualified intellectual property rights which are used to counteract COVID-19.
Postponement of ORD-U submission
(information on agreements concluded with non-residents within the meaning of foreign exchange law) until the fifth month after the end of the tax year for which they are drawn up. The extension applies to the period from 31 March 2020 to 31 May 2020.
Postponement of sending the IFT-2R
until the end of the fifth month of the year following the tax year in which payments were made to foreign entities (including interest, royalties, etc.). In the case of information IFT-2, the extension applies to legal persons, organisational units without legal personality and natural persons who are entrepreneurs whose tax year ended between 31 December 2019 to 31 January 2020.
Bad debt relief
Possibility for debtors not to show unpaid liabilities when calculating advance income tax payments. Cumulative conditions to benefit:
– a decrease of at least 50% in revenue compared to the same period in the previous year;
– suffering negative economic consequences due to COVID-19;
Creditors retain their existing entitlement to bad debt relief.
Transfer Pricing Release (TP-R)
Solution for taxpayers required to file TP-R before 30 September this year. A business has additional time until 30 September this year to file transfer pricing information for 2019.
The new VAT rate matrix – a shift – will take effect from 1 July 2020.
– New Standard Audit File (JPK)
– The deadline for large businesses to implement the new JPK_V7 has been moved to 1 July 2020.
MDR – tax schemes
Suspension of reporting of domestic tax schemes until the outbreak is over, no later than 30 June 2020. However, the obligation to report cross-border schemes has not been suspended.
Extension of deadlines for issuance of tax interpretations
The deadlines for issuing tax interpretations, in respect of which applications were filed before the special act came into force or filed before the end of the epidemic, will be extended by 3 months.
This deadline may be extended by the Minister of Finance for further periods, but by no more than 3 months.