According to NSA judgment dated 24 April 2018, reference no. II FSK 1105/16, one-off or one-time granting of a loan in an economic activity without the intention of doing business in such a way may result in the taxation of a loan with a tax on civil law activities, regardless of the status of VAT payer.
In order to conclude that the loan agreement is not subject to PCC taxation, it is appropriate first, determine whether one of the parties to the loan is taxed or exempt from goods and services. It is therefore crucial to consider all the circumstances of the case.
It is widely known that a loan as a simple legal structure is an instrument that entrepreneurs often use as a legal title to transfer to the entity concerned the relevant amounts. Of course, the elements of the loan agreement are preserved and the whole legal relationship is clear.
However, the question is whether and what kind of tax should be levied on the loan agreement, where the contract is a taxable trader. According to the recipe Article 1(1)(1) point (b) Act dated 9 September 2000 This tax is subject to agreements on the lending of money or of goods designated only in respect of the species.
In turn under Article 2 This law contains a list of activities which are excluded from taxation, including civil law activities, other than the articles of association and its amendments, if at least one of the parties for the performance of this activity is:
• taxed on goods and services,
• exempt from tax on goods and services, except:
- the sale and replacement contracts which are the subject of the property or part of it, or the right of perpetual use, the cooperative property right to the premises, the right to a single-family house in a housing cooperative or the right to a parking space in a multi-station garage or to participate in those rights,
- contracts for the sale of shares in commercial companies.
Thus, as the NSA stressed in the judgment dated 24 April 2018 reference no. II FSK 1105/16 – in order to conclude that the loan agreement is not subject to PCC taxation, first determine whether one of the parties to the loan is taxed or exempt from goods and services. It is therefore crucial to consider all the circumstances of the case.
Namely, the fact that a VAT taxable person is active does not prejudge that the party to the activity will be VAT-taxed. The object of activity (PKD) is also not the decisive element. It may be that the granting of loans will be a "complementary activity" of the entrepreneur.
Of course, it cannot be disputed in advance that, if a loan was made only once, the entrepreneur had no intention of continuing its lending activities. It will therefore be crucial that professional financial intermediation services and money lending be provided to other entities.
It is important to be able to demonstrate that the persons managing the entity actually intended to carry out such activities; that there was a separate organisational cell with separate funds for the conduct of loan operations, that the entity planned and acted towards the development of this area of activity.
Otherwise, there may be a real risk in relation to the loan agreement that such a contract may be classified as being concluded by an entrepreneur outside VAT and, consequently, that it is subject to PCC.
Author:
Aleksandra Księżyk
Director of the Legal Department in Warsaw. Legal advisor, from 2013 associated with Russell Bedford. He runs the Legal Department at the Chancellery Russell Bedford.