Day 26 July 2021 The Ministry of Finance has published a long-awaited draft law amending the Personal Income Tax Act, the Corporate Income Tax Act and some other laws in connection with the announced tax changes concerning the so-called scheme "Polish Deal” or rebuilding the economy after the coronavirus epidemic.
On 29 October 2021 There was a new, modified bill amending - after a public consultation, an auto-amendment from the government and amendments to the Senate. The project assumes a number of revolutionary tax changes that significantly transform the tax system in Poland.
The content of the bill itself counts 277 the parties, and the reasons given to them 267 pages. In our view, it is worth reading the amendments in order to identify the opportunities and risks that are emerging. To this end, we have prepared a series of articles that will facilitate this task.
In last module no. 6 We will address the most important changes made under the National Tax Administration Act and Tax Ordinance.
Temporary occupation of movables
The temporary seizure of movable property will consist of temporary deprivation of the right to dispose of movable property (from amounts above) 10,000 PLN. However, this activity may not take longer than 96 hours
During the period of temporary occupation of movables following the receipt of a copy of the digital record of that occupation, the enforcement authority shall issue a decision to approve in full the temporary seizure of movables in administrative execution carried out by that authority on the basis of the implementing title indicated in the provisional record of seizure.
At the time of the order to approve the temporary occupation of movable property, it becomes the execution of these movements. A complaint shall be made for the order to approve the temporary seizure of the mover.
This means that by then, the authorities can decide which things the taxpayer can dispose of. These changes are to take place in accordance with Article 3 and Article 20 Draft law ‘Polish Deal”.
As the MF argues, the changes are intended to safeguard the financial interests of the state budget and contribute to more effective enforcement of the backlogs of enforcement authorities. The purpose of the Ministry is both to reduce the number of debtors by 10% as well as the increase in the amounts of outstanding arrears enforced 10%.
The Resort indicates that the arrears above 10,000 PLN are a dozen one billion PLN, while only over one year is enforced 4,000,000,000 PLN, the need to equip the KAS bodies with a new tool.
The obliged person will be able to prevent movement from temporary occupation, provided he shows evidence that the obligation is not due.
In this context, it is possible that the principle of proportionality may not be respected, according to which authorities should use only those measures that are necessary to achieve a specific objective. This, combined with a larger scope of freedom of the IRS, leaves room for abuse.
However, the legislator made a provision that temporary occupations would not be subject to mobility with a value ‘significantly’ exceeding the amount needed to meet the claim. However, the imposition of such a rough provision may further exacerbate the uncertainty of the application of the law to the taxpayer.
Verification acquisition
As the Ministry of Finance writes, in 2020 only the customs and tax offices themselves controlled the obligation to register transactions using the fiscal cash register above 15,000 times. As a result of these checks, irregularities were found in more than 43% cases.
In the opinion of the project promoters, only the 11.5 PLN (the average value of VAT on sales not covered by the fiscal receipt disclosed during the mandate operation) the underselling of the goods and services tax on daily sales per one accounting for almost half of the 2,400,000 fiscal cash registers, allows to estimate the grey area in this area horizontally 2,400,000,000 PLN.
On the other hand, the Non-cash Trading Development Foundation estimates the grey zone in this respect as 10,000,000,000 PLN.
So far, a number of different solutions have been introduced, including the online cash register system, JPK VAT file transfer, split payment, STIR system, SENT system, etc., in order to allow effective fight against the grey zone and fraud in VAT.
The verification acquisition is not intended to be a form of tax or tax control and is to be non-formalised. The activities in the form of a checking acquisition may result in a note (no infringements) or a mandate and protocol (declaration of the infringement). The goods purchased in the course of the checking acquisition will be subject to reimbursement, as opposed to the service provided.
However, the controllers will have to document the audit thoroughly. The project assumes that, in the course of the acquisition, the checker will be used for documenting this activity Article 64(1)(10) The KAS Act, so this will be done by drawing up sketches, copying, filming, shooting and making sound recordings.
In 2018 It was loud about the IRS provocation conducted by the Warden of the US in Bartoszice. two The women came to the auto shop begging the mechanic to replace the bulb. This one exchanged for a symbolic fee 10 PLN (He initially did not want money at all), after closing the daily report, i.e. without issuing a receipt. However, it turned out that the clients were in fact US employees who imposed a fine of 500 PLN. Now you will expect an increase in this type of situation.
Unlike the normal control in this case, no territorial jurisdiction will apply. It follows that the warden of every US will be able to send his officials anywhere in the country to pretend to be regular customers and to use such provocations.
The rules of limitation of checks provided for in business law will not apply to the acquisition of the checker. In normal control activities, they ensure, inter alia, that the control body is to warn the entrepreneur of the planned control.
Furthermore, the acquisition of a checking and possible mandate will not have to mean the conclusion of the case. The MF states in the explanatory memorandum of the project that "it is not excluded to initiate a follow-up review of whether tax proceedings should the KAS authorities have the grounds for such action".
Indeed, this idea is controversial. In particular, it should be considered whether tax authorities should address larger players in search of budget revenue. The prosecution of small entrepreneurs for failing to issue a receipt seems to violate the principle of VAT proportionality in the same way as in the temporary occupation institution. Nor will the project translate into a substantial increase in budget revenue.
The question also arises as to which key the entrepreneur will be selected to acquire the checker. Since it will be carried out on the basis of a permanent, general mandate, there is nothing to prevent a KAS official from inspecting his local store while shopping. In addition, officials for the abovementioned activities will have a special fund from which they are to receive money for controlled shopping.
Introduction of the possibility for the Head of KAS to inform taxpayers of the risk of participation in tax carousels
The National Tax Administration Act will add a new entitlement to the Head of the KAS, according to the proposed Article 15a laws which may take action to inform taxable persons of the risk of trade in goods or services supplied to the taxable person or counterparty of that taxable person at least one a supplier who may act as a disappearing taxpayer.
The solution proposed by the MF, by informing taxpayers of the risks, is to allow the introduction of a tool to combat VAT fraud (carousel fraud). The decision to inform the taxpayer of the risk will be an exclusive decision of the Head of the KAS of its own motion, and the design of this tool is not to alter the other powers and obligations of the aforementioned tax authority.
According to the information provided by the Ministry, the information activities are not intended to be of a mass nature. Nor is the possibility for the taxpayer to request such action.
The new tool is intended to be complementary to other powers of the Head of the KAS, such as blocking the taxpayer's bank account.
The optional nature of the solution means that the Head of the KAS will not be obliged to inform the taxpayer of the risk, even if such risk is detected during analytical activities. Such action could in some cases adversely affect other actions by the KAS or other services.
Moreover, despite the introduction of this tool, the taxpayer will continue to be obliged to exercise due care. The taxpayer's failure to receive such a letter does not exempt him from the obligation to exercise due diligence - in particular, in the course of checks or tax proceedings, the taxpayer cannot rely on the absence of such letter.
According to Article 15a(4) It is envisaged that the taxpayer may request a tax check from the supplier. Consequently, the taxpayer will eventually be able to examine whether the counterparty in question acts as a ‘disappearing taxpayer’. The Ministry of Finance argues that such an audit will also be another argument for maintaining due diligence.
The legislator provides that in the risk warning information at least one a supplier who may be a disappearing taxpayer, the Head of the KAS may disclose the data of the counterparty, which will not violate the rules on tax secrecy.
Introduction to Tax Ordinance Investment Agreement Institutions (other than Interpretation) 590 or Investor Desk
After Article 20zr Tax Ordinance The project provides for the introduction of the IIC - the new Investment Agreement institution, concluded in the form of an agreement with the Minister of Finance. The Investment Agreement will be another possible form of cooperation between the taxpayer and the National Tax Administration alongside the already running Co-operation Programme, available to large taxpayers.
The Investment Agreement may include entities (or groups of entities) that plan or have just begun to invest in Poland, provided that the value of the investment is at least 50,000,000 PLN. However, within first 3 years after the entry into force of the amending law, the value of the investment will be increased to 100,000,000 PLN. The new instrument will extend support to new investments.
The Investment Agreement will cover the tax effects of investments, in particular the assessment of investments in terms of transfer pricing rules, the anti-tax avoidance clause or the classification of excise goods and the determination of the appropriate VAT rate for goods or services.
Instead of applying for different acts (individual interpretation, binding rate information, binding excise information, prior price agreement and a safeguard opinion), the above-mentioned tax law issues will be resolved within the framework of one Interpretations 590.
„Interpretation 590 will be an iron letter, which will give the investor not only the highest protection, but also the high prestige and rank of the agreement. It will be a premium service for companies who will decide to put their money on Poland" - explained Deputy Minister of Finance Jan Sarnowski.
The investment agreement will be a condition for the tax authority to determine the tax liability (height of loss) to the extent that the income (loss) shown by the taxpayer has been determined in accordance with the agreement in question.
The conclusion of the agreement will be based on a voluntary principle, with the Minister of Finance not obliged to conclude the agreement. However, the refusal to enter into an agreement must be justified. Due to the consensual nature of the Investment Agreement, it will not be subject to review by administrative courts.
Conclusion of the agreement 50,000 PLN from every investor.
The conclusion of the agreement itself will be subject to the payment of a principal fee of not less than 100,000 PLN and not higher than 500,000 PLN, and the amount of the fee is to depend in particular on the declared value of the investment.
Consequently, the maximum amount for one investor for concluding the agreement will be 550,000 PLN. The investment agreement shall be valid for a period agreed in the agreement, but not longer than 5 tax years.
The investor will be able to terminate the agreement at any time, and the Minister of Finance will be able to terminate the agreement only in clearly defined cases, e.g.
in the event of the investor's non-disclosure of the material circumstances affecting the facts, the investor's failure to comply with the prior price agreement during its period of validity or in the event of a change in the existing case law line.
Given the complexity of the Polish tax system, it seems that the possibility of the Authority to declare an agreement due to the change of the jurisprudence line may be highly risky for taxpayers and cause a considerable amount of uncertainty among them.
Author: Mateusz Krawczyński
Junior tax consultant At Russell Bedford Poland. Graduated from bachelor's degree in Logistics and Master's degree in Finance and Accounting. He is currently studying law at the Łazarski University. Previous professional experience in tax matters In one of Big Four companies. He specializes in tax on goods and services, in particular with regard to VAT settlements in local government units.