25 March this year The Council of Ministers adopted a package of draft laws implementing anti-crisis solutions presented last week. The public finance provisions proposed by the Ministry mainly concern budgetary issues and the area of activity of financial institutions.
Finance Minister Tadeusz Kościński points out that the catalogue of actions is not closed due to the dynamics of the situation we are dealing with. – We analyse needs and respond to changing circumstances. For example, at the request of entrepreneurs, we have postponed the introduction of a new VAT rate matrix and changes in CIT – Kościński informs. He adds that already today, the MF is using mechanisms in tax legislation, which allow us to react quickly to the difficulties that arise.
An example of the application of such mechanisms is, among other things, the postponement of the deadline for the submission of testimony CIT-8 and payment of tax for 2019 by CIT taxpayers on 31 May this year For NGOs, i.e. taxable persons with tax-free income only, as well as public-interest taxable persons, if their income from that activity is at least 80% all revenue – deadline for the statement CIT-8 elongated to 31 July this year
The package adopted by the government consists of:
- • Draft Act amending the Act on Special Solutions for Prevention, Prevention and Combating COVID-19 (the specification);
- • the draft State Aid Act for rescuing or restructuring entrepreneurs (new opportunity policy);
- • draft Act amending the Act on the System of Development Institutions (PFR).
Many public institutions were involved in the work on projects, including the Ministry of Development, the Ministry of Finance, the Ministry of Family, Labour and Social Policy, the Ministry of the Interior and Administration, the Ministry of Justice and ZUS, the KNF and the PFR. The President of the Council of Ministers held the supervision over the preparation of documents.
State budget
- The new legislation makes the management of the state budget more flexible. The Prime Minister will have the power to shift funds between budgetary parts, change the allocation of special provisions and create new reserves to fight against COVID-19 - stresses the head of the MF.
It will also be flexible to change the plans of the state special purpose funds and executive agencies. “All this to respond quickly to the needs of individual public funds,” explains Minister Kościński.
We recommend online training: Coronavirus and the rights and obligations of employers and employees
The proposed provisions provide for the creation of a special Coronavirus Anti-Operation Fund COVID-19 (FPK), which will be powered by the state budget as well as other special purpose funds, which will have both free funds and government bonds and bonds issued by BGK.
This appropriation will be intended to cover a whole range of instruments, including those which may be transferred to the Labour Fund or the Guaranteed Workers' Benefits Fund. The FCP will also be able to finance government programmes and those tasks which will provide fiscal impetus to boost the economy.
Local government budgets
The special law also makes the management of public funds within local government more flexible. The mayor (or mayor, or president of the city), the county board or the provincial board will have the power to make changes in the plan of revenue and expenditure of the local government unit, including transfers of expenditure between budget classification departments.
When implementing the self-government budget, the mayor (or mayor, or mayor, or mayor of the city), the district board or the provincial board will also have the opportunity - without obtaining the opinion of the committee responsible for the budget of the body constituting the unit - to change the destination of the special-purpose reserve and create a new special-purpose reserve, transferring the blocked amounts of expenditure to it.
Fiscal rules of local government units
The limits on the balance of part of the current budget have been temporarily relaxed. In 2020 current expenditure may be higher than current revenue by expenditure incurred to carry out countermeasure tasks COVID-19 in part of which they were financed by own resources.
In addition, the investment opportunities of local governments have been increased, modifying for years 2020-2025 an account limiting the repayment of the debt of the local government unit.
Tax solutions in the law
- The possibility of retroactive settlement of tax losses in PIT and CIT. Loss suffered In 2020 taxpayers, under certain conditions, will be able to deduct from income earned In 2019 To that end, taxpayers will make a correction of the testimony for 2019 And they'll get a refund.
- Longer time to submit a PIT declaration. No sanctions for filing a tax return and paying a tax after the deadline, if applicable by the end of May 2020
- Option to opt out of simplified advances In 2020 and calculation of monthly advances on current income. Solutions for "small taxpayers". Those who give up simplified advances for the period March-December 2020, calculate monthly advances on current income on general terms.
- Failure to collect the extension fee. The taxpayer will not have to bear the cost of the fee due to the postponement of the tax payment period or the distribution of the payment of the tax per instalment, or the postponement or distribution of the tax arrears plus interest. That's the fee now. 4% the amount of tax or tax arrears. Exemption from the obligation to pay will continue during the epidemic and during the period 30 the days immediately following its cancellation. As far as local taxes are concerned, a decision may be taken by the municipal council, as it is entitled to introduce a prolongation fee.
- Relief from donations to fight the coronavirus. Introduction of a deduction in PIT and CIT without a limit for donations (monetary or in kind) to prevent and combat coronavirus infection to healthcare providers, including sanitary transport, as well as to the material reserves Agency and the Central Sanitari-Critical Reserve Database.
- Exclusion of the application of regulations in income taxes on so-called bad debts. The provisions on bad debts in PIT and CIT, under certain conditions, will not apply to advances of debtors who should take into account unpaid liabilities when calculating income tax advances. In this way, the debtor will not have a higher burden and the creditor will benefit from the relief as it is now.
- Extension of the deadline for advance payments by payers on the remuneration tax collected for March 1 April. Introduction of the extension of the deadline for the employer to transfer advances on PIT on income from widely understood work, collected in March and April (so-called PIT-4). Payment of the advance, instead of corresponding 20 April and 20 May this year can be done to 1 June this year
- Change of the date of introduction of the new VAT rate matrix. The new VAT rate matrix will apply from 1 July 2020
- Transfer pricing information (TP-R). Solution for taxpayers obliged to submit TP-R before 30 September this year The entrepreneur has additional time to 30 September this year to submit information on transfer prices per 2019
- Transfer of the deadline to pay tax on revenue from buildings. From the postponement of the deadline for payment of tax on revenue from buildings (i.e. the so-called minimum tax on commercial real estate), for the months of March-May 2020 to 20 July 2020 tax payers who meet certain conditions will be able to benefit.
- The possibility for municipalities to introduce property tax exemptions. The Council of the municipality concerned may pass, for part of the year 2020, the tax exemption for land, buildings and structures used to conduct business. The exemptions concern groups of entrepreneurs identified by the municipality whose financial situation has deteriorated as a result of the epidemic.
- The possibility for municipalities to extend the deadlines for payment of the property tax instalment. The municipal council may, by means of a resolution, extend the deadlines for payment of the instalments of the property tax payable in April, May and June 2020, no longer than 30 September 2020 The extension of the deadlines will include identified groups of entrepreneurs whose financial situation deteriorated due to coronavirus.
- Suspension of retail tax. Continuation of suspension of the retail tax act. The taxpayer will not have to pay tax for the accounting periods July-December 2020.
System solutions in the speciality
- It is possible to extend the time limits for monthly and quarterly budgetary reporting and information provided by public finance sector entities, including local governments. The Minister of Finance will monitor on an ongoing basis the possibility for public finance sector entities, including local governments, monthly and quarterly budget reports and information prepared by them. If necessary, it shall amend the time limits for their transmission.
- Extension of financial reporting deadlines. It is also planned to postpone, by means of a regulation, the obligations of private sector entities, public entities and non-governmental organisations relating, inter alia, to the preparation of financial statements, their audit audits, approvals and making these reports public.
- A longer deadline for submitting a notification on payments to accounts outside the VAT list. The taxpayer making the payment above 15,000 PLN for an account not included in the list of VAT taxable persons, may make notice of such payment not in 3 days, a 14 days
- The possibility to suspend administrative enforcement proceedings for monetary claims. During the outbreak period, the Council of Ministers will be empowered to issue a regulation on the basis of which administrative enforcement proceedings will be stopped.
- Deferral to 1 July 2020 the obligation to submit new JPK VAT with a declaration for large taxpayers. Big entrepreneurs gain extra 3 months to adapt their systems to the requirements of new reporting. They have more time to train their employees. Employees have more time to work on matching accounting and IT systems. IT experts have more time to perform their work on the implementation of the new JPK.
- The possibility of waiving penalties for errors in VAT JKP records. This amendment will allow discretion to be introduced in the imposition of sanctions and applied in particularly justified cases. Since sanctions should be a means of final impact, this amendment will allow them to be targeted at taxpayers who intentionally and persistently make errors preventing verification of the regularity of transactions.
- Deferral to 13 July 2020 notifications to the Central Register of Real Beneficiaries. Entrepreneurs gain more time to adapt to the new reporting obligation. This reduces the current logistical and financial burden.
- E-paragon. The possibility of submitting a fiscal receipt in electronic form to the client, with and in an agreed manner.
- Flexibility of the financial economy of public finance sector entities, including special purpose funds, executive agencies and the state budget to ensure that public funds are available as quickly and efficiently as possible for countermeasure purposes COVID-19. The aim is to reduce the number of procedures and the burden of existing legislation, including:
- abolishing restrictions on changes to financial plans;
- introduction of the possibility of co-financing from the state budget or from other public funds to 100% the value of the tasks carried out;
- extending the deadlines for clearing grants;
- to simplify the procedure for re-use of the special-purpose reserve or the creation of special-purpose reserves from blocked resources.
Measures already implemented by MF
- Under the Regulation of the Minister of Finance, BGK may provide guarantees for the repayment of de minimis loans to micro, small and medium-sized enterprises. Amendment of the Regulation allows for the provision of guarantees to 80% loans. The commission fee on these guarantees was also reduced to 0%.
- Entrepreneurs who have problems with the timely payment of tax due to coronavirus may apply for relief or remission.
- Systemic risk buffer has been abolished to release 30,000,000,000 capital that will increase the supply of loans to SMEs by 40,000,000,000 PLN. This is estimated to result in the increase of Poland's GDP by 0.5% Within 2.5 years.
- Under the Regulation of the Minister of Finance, products produced or purchased by companies transferred to fight coronavirus were subject to a ‘zero’ VAT rate. This includes medical devices and medicinal products such as disinfectants, masks and protective suits.
The Ministry of Finance encourages the transmission of suggestions from taxpayers and entrepreneurs, through the Voice of the taxpayer portal. This is served by the specially launched coronavirus category. The portal has already been published 114 proposals for anti-crisis solutions.