Polish Deal 2.0. It'll come into force now. 1 July 2022, Whereas the individual regulations of the Act will also apply from 1 January 2023 (and even later), and vice versa – back to legal status of the day 1 January 2022 We look at the most important changes for taxpayers.
These changes should be assessed as positive for taxpayers. However, it is not difficult to get the impression that the government is, to a large extent, correcting the mistakes that it itself has made.
Elimination of the credit for the middle class and reduction of PIT from 17% to 12%
In mind, the relief for the middle class was intended to compensate for the inability to deduct from the tax the health contribution.
However, it has been criticised for its high complexity and its inability to apply to some of the revenues (retirement, some contractors and those applying taxed taxed income on a tax scale could not benefit from it). Consequently, this relief will be abolished.
In its place, the legislator will reduce first the tax threshold of 17% to 12% for all taxpayers accounting on general terms.
Possibility to deduct paid health insurance contribution
In order to minimise the effects of not being able to deduct health contributions paid since the beginning of the year, Polish Deal 2.0 provides for the possibility of deducting the health contribution paid on the following basis:
- from the tax base for taxable persons accounting for a linear tax - up to the limit 8,700 PLN (loss of income),
- for taxable persons accounting for a lump sum on registered income, of 50% contributions paid (recollection of revenue) and
- for taxable persons accounting for a tax card - 19% contributions paid (repeal of tax).
These changes are also intended to offset the lack of the possibility of deducting the health premium from the tax, which was, however, more favourable than the proposed changes.
Selection of the tax scale by taxpayers taxed in 2022 linear tax or lump sum on recorded revenue (transitional provisions)
As a result of changes in the tax scale to address the taxation of revenue generated in 2022, the project in question enables taxable persons who 2022 tax their income with a linear tax or a lump sum on recorded revenue, the choice of taxation of income on general terms after the end of the tax year (in annual accounting).
Amendment of the rules on the application of the tax-free amount
Possibility to include 1/12 the amount reducing the tax already at the stage of the collection of income tax advances will also include payers, other payers paying benefits from activities performed in person and payers collecting advances on income from property rights. The payers concerned have not yet been able to apply a reduction in the collection of advance payments on tax, so that in taxable persons obtaining revenue from the sources indicated, the tax reduction was only taken into account in the annual accounts.
Abolition of tax abolition
Tax Abolition was addressed to PIT and CIT taxpayers. It was intended to apply to revenue not declared in particular in connection with the non-disclosure of income or the origin of revenue.
According to standard rules, the revenue withheld and detected by the tax is taxed at a rate 75%. In turn, the rate of taxation on income subject to tax abolition was to be 8% the tax base. The regulation was temporary and the deadline for submitting the application was set for a period from 1 October 2022 to 31 March 2023
In connection with the provisions under discussion, the President has asked the Constitutional Tribunal to examine their compatibility with the Constitution. The MF therefore decided to repeal this regulation.
Deferment of the introduction of CIT JPK and PIT JPK
From 1 January 2023 The taxpayers were to be burdened with an additional duty. This is the need to regularly transfer tax books to the tax office. Thanks to this type of tax office, it will be able to verify the tax settlements in the scope of CIT, PIT and lump sum.
This will be analogous to the already existing VAT JPK. Polish Deal 2.0 postpone the date of entry into force of the new obligations. This is intended to allow taxpayers to better prepare for electronic accounting. The new obligations will begin to apply:
- from 2024 – for CIT taxpayers whose revenue for the previous tax year exceeds the amount 50,000,000 EUR,
- from 2025 – with regard to PIT and CIT taxable persons obliged to draw up a VAT JPK declaration,
- from 2026 – for other taxpayers of PIT and CIT keeping tax books.
Limitation of relief for the protection of monuments
It now consists of third Pillars – deductibility from the tax base (general rules, linear tax, lump sum):
- 50% contributions to the community renovation fund or housing cooperative created for historic property,
- 50% This appropriation is intended to cover expenditure on studies, meetings of experts, information and publications directly linked to the achievement of the objectives of the programme.
- expenditure on acquisition of historic immovable property up to the amount 500,000 PLN.
It should be pointed out that the greatest benefit of this relief is for those with high earnings who have considerable investment resources. They can be the ones that can significantly reduce their income tax. In view of the public criticism of the solutions under consideration, the Ministry of Finance has decided to waive the possibility of deducting property acquisition expenses. Changes will enter into force from 1 January 2023
Author: Mateusz Krawczyński, junior tax consultant in 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 one of the so-called Big Four companies. He specializes in tax on goods and services, in particular with regard to VAT settlements in local government units.