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From 01/01/2020 VAT-tax payers are obliged to make transfers to the bank account indicated in the so-called white list if the invoice amount exceeds PLN 15,000 gross. Payment to an account not included in the list will have the following consequences:

• expenses cannot be included in the tax deductible costs under the personal income tax and corporate income tax,

• The purchaser may be liable, together with the seller, for payment of VAT to an unlisted bank account number.

Exemption from this liability may be granted by timely (within 3 working days from the date of payment) formal notification to the relevant Tax Office. We recommend that you check the bank account details of your business partners before making transfers. These details can be checked on the following website: www.podatki.gov.pl/wykaz-podatnikow-vat-wyszukiwarka.

At your request, we will check the relevant information and, if necessary, send a notice to the Tax Office.

From 01/01/2020 Polish personal income tax payers and corporate income tax payers have the possibility to report losses due to bad debts, which until now was possible only for VAT-tax payers. By applying bad debts relief the taxable income may be reduced by the amount of unpaid receivables. Application of this relief is possible when:

• the debtor is not in bankruptcy or liquidation proceedings on the day preceding the date of the submitting tax return,

• less than two years have passed since the date of issue of the invoice or the date of conclusion of the contract which documents the claim, counting from the end of the year in which the documents were issued,

• the commercial transaction was issued as part of the creditor's and debtor's business and their income is subject to taxation in Poland,

• the date of payment of the invoice was not earlier than after 31/12/2019.

At your request, we can prepare a calculation of bad debt relief for the above tax

From 01/01/2020, taxpayers are obliged to pay all receivables related to goods and services tax, corporate income tax and personal income tax for an individual tax microaccount. The tax microaccount shall make it easier for taxpayers not only to pay taxes but also to obtain relevant certificates. An individual tax microaccount may be checked on the website of the Ministry of Finance: www.podatki.gov.pl/generator-mikrorachunku-podatkowego.

At your request, we can check your individual tax microaccount.

On 01/01/2020, the European changes to the VAT law came into force (so-called Quick Fixes). The new rules concern the following areas:

• New requirements regarding the EU registration for VAT purposes when carrying out intra-Community supply

• New documentation requirements to prove intra-Community supplies

• Call-off-Stock warehouse

• Chain transactions

It is worth remembering that the Polish legislator has not managed to introduce relevant legal acts into Polish regulations on time. The Polish Ministry of Finance has notified that until the introduction of the changes to the Polish regulations, Polish taxpayers will have a choice between applying the previous provisions of Polish law or the new provisions of the Directive (Implementing Regulation is directly applicable). However, this choice shall be consistent.

You will find more information in the short guide.

New legal acts amending regulations in the area of licensing the liquid fuels have come into force in Poland. The definition of liquid fuels was changed and the group of licensed liquid fuels was extended.

More information on this subject you will find here.

In the current special edition of Brand Eins/Theme Issue 14, our firm was awarded the title of Best Tax Consultant & Auditor 2020 in the segments of international tax consulting and business management consulting. That makes us proud. How did we receive this award?

We were recommended several times in a two-stage survey and evaluation proces conducted by Brand Eins among experts (tax consultants and auditors) and business and corporate clients (managing directors, employees from the financial sector of companies). This encourages us on our way.

We have also informed in November, that we received the prestigious Top Tax Advisory Office title in the field of international tax consulting. This was very valuable to us, because in this ranking professionals recommend professionals. Thanks to the opinions of tax advisers, we received this title in 2014, 2016, 2017, 2018 and 2019.

Procedure for WHT return in Poland - does it really have to be so difficult and complicated? Not necessarily. We explain this issue in our next infographic. We hope that it will be helpful for you. If you have any doubts, please contact us. We will be happy to answer your questions.

From 01/01/2020 some payments (e.g. interest, dividends, royalties) made by a Polish company to a foreign company in the amount above 2.000.000 PLN during a tax year shall be in principle taxed at the non-preferential Polish tax rate (19% or 20%). When a taxpayer had the right to apply a preferential rate (e.g. 5%) or WHT exemption, it is possible to apply for a WHT refund in the following procedure:

• collecting of some documentation to prepare the application (e.g. certificate of tax residence from the state of the payment’s recipient, documentation regarding bank transfers, written statements regarding the payment’s circumstances);

• preparation of a formal WHT return application by a Polish or foreign company;

• submitting the application in electronic form to the Polish tax authorities;

• if necessary, completing the application with additional information and documents requested by the Polish tax authorities.

Results:

1) obtaining a WHT tax refund decision:

a) decision is issued within 6 months from the date of application’s receipt by the Polish tax authorities;

b) the Polish tax authorities may extend the refund period, including through prior tax control (also on the territory of a foreign company) or by asking foreign tax authorities for additional information;

2) decision about refusal of WHT tax return: in such case there is a right to appeal against the refusal.

The procedure for obtaining an opinion on the WHT tax exemption in Poland is a very important and complicated issue. We explain this problem briefly in our next infographic . If you have more specific questions, don't hesitate to contact us.

From 01/01/2020 the payment of dividends or interest to a related foreign (e.g. German or Dutch) company by a Polish company in the amount above 2.000.000 PLN during a tax year will be taxed at the non-preferential Polish tax rate (19% or 20%). The application of the tax exemption will be possible after obtaining a special opinion from the Polish tax office, i.e. opinion on WHT tax exemption in the following procedure:

• preparation of a formal application by a Polish or foreign company;

• application fee in the amount of 2.000 PLN;

• submitting the application in electronic form to the Polish tax authorities;

• if necessary, completing the application with additional information and documents requested by the Polish tax authorities.

Results:

1) obtaining of opinion on the WHT tax exemption:

a) opinion is issued within 6 months from the date of application’s receipt by the Polish tax authorities;

b) opinion expires after 36 months from the date of its issuing or due to significant changes in the circumstances being the part of the application;

2) refusal to issue an opinion on the WHT tax exemption (e.g. due to non-compliance with certain conditions, doubts of tax authorities about some information or documents, tax avoidance): in such case there is a right to appeal against the refusal before the Polish administrative court.

What is worth remembering about due diligence in the context of withholding tax in Poland? We have prepared another infographic infographic erstellt, in which we explain this complicated problem. If you have any questions, remember that you can contact us anytime.

Case: tax rigor in the area of more stringent due diligence requirements for payment of receivables that are subject to WHT.

Results: When verifying the conditions giving entitlement to WHT exemption or WHT preferential rate, the Polish company is now required to exercise a special due diligence, which will be assessed according to the nature and size of the conducted business.

Necessary verification activities:

• documents received in terms of their compliance with the factual circumstances;

• tax residence (place of profit’s taxation) of the receivable’s recipient (foreign company);

• status of foreign company receiving receivables in terms of a definition of so called “beneficial owner”, including through the prism of conducting actual business activity by this entity.

Sanction:

Failure to exercise a special due diligence requirement may result in establishing an additional tax liability on the tax payer in the amount of 10% of each time applicable tax base, in relation to which the tax payer has incorrectly applied a tax exemption or preferential tax rate.

WHT in Poland - how general rules from 01/07/2020 will look like? We explain this important issue in our infographic from the WHT series. We will be happy to answer your questions.

Case: The amount paid out in favour of the same foreign company exceeds the amount of PLN 2,000,000.00 during the tax year.

Results:

• Polish company will be in principle obliged in the first place, in relation to the surplus above PLN 2,000,000.00 to collect the WHT at the non-preferential Polish tax rate (19% or 20 %) and pay this tax to the Polish tax office;

• Polish company or foreign company (depending on who borne the economic burden of the tax) may submit the return application in a formal procedure conducted by Polish tax authorities.

Exemptions to the payment of tax at a non-preferential rate (i.e. applying a tax exemption or preferential rate):

• obtaining an opinion on the exemption from WHT in a formal procedure conducted by Polish tax authorities in case of dividend payments (profit distribution) or (loan or credit) payments for affiliates;

• taking personal and criminal liability by all members of the management board of the Polish company by regular submitting declaration by the Polish tax office.