Special Law governing aid to victims of the war in Ukraine
The Polish Sejm passed the special bill (“Special Law”) intended to regulate the legal situation of Ukrainian refugees and to offer them relatively normal living in Poland. Among the numerous solutions, there are also tax preferences.
In particular, the planned regulations are to enable recognition of expenditure incurred for donations and other gratuitous benefits given in the period from 24 February to 31 December 2022 to entities identified in the Special Law, which provide assistance to victims of the conflict in Ukraine as costs. According to the bill, these entities are to include:
- Government Agency for Strategic Reserves
- local government units,
- organisations which operate pursuant to Art. 3(2) and (3) of the Act on public benefit organisations and charities and equivalent organisations in the light of the Ukrainian law.
- entities engaged in healthcare activity or medical rescue activity and equivalent entities in the light of the Ukrainian law.
Tax costs will include expenses incurred to purchase or produce things and rights donated, as well as expenditure incurred for other gratuitous performances, unless they were previously recognized as tax costs (e.g. by depreciation write-offs). Expenses recognized as tax costs under the planned regulations are to be excluded from calculation of the loss and share of income in the revenues for the purpose of the minimum tax.
The Special Law also provides that donations and performances received by the aforesaid entities to counteract the effects of the war in the territory of Ukraine will not be classified as tax income for them.
Additionally, cash payments awarded to taxpayers who provide accommodation and board to Ukrainian citizens under an agreement with the commune are to be exempt from PIT and CIT.
The Special Law also provides for a series of simplifications and preferences (including tax-related ones) for refugees, e.g.:
- exemption from PIT of humanitarian aid received from 24 February to 31 December 2022 by Ukrainian citizens who arrived in Poland during this period as a result of the war in Ukraine,
- legalizing residence of Ukrainian citizens who arrived in Poland in connection with the conflict for a period of 18 months starting from 24 February,
- enabling Ukrainian citizens whose residence is Poland is recognized as legal to do work and operate business activity,
- adopting a number of aid instruments to be used by Ukrainian citizens and defining the manner of their financing (setting up the Assistance Fund within the framework of the Bank of National Economy (BGK) and enabling them to use a number of public services (healthcare and education).
The bill has already been passed by the Sejm. The Senate is going to vote on it on 10 March. Therefore, it seems likely that the bill will take effect in the coming days.
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