The Sejm adopts the Anti-Crisis Shield
31 March 2020 The Sejm passed and the President signed the final wording of the anti-crisis shield regulations (the acts of law were published in the Journal of Laws). Presented below is the summary of major changes which take effect on 1 April 2020.
CHANGES IN THE INCOME TAX ACTS
I. CIT and PIT payers who face adverse economic effects of COVID-19 are allowed to deduct the tax loss incurred in 2020 from income earned on their business activity in 2019 provided that in 2020 their revenues are lower by at least 50% compared with 2019.
- the possibility to reduce the value of the loss by income derived in the preceding tax year for taxpayers who incurred a loss in 2020,
- the amount of the loss to be deducted must not exceed PLN 5 million,
- the deduction will be made by filing an adjusted return for the preceding tax year,
- this applies to taxpayers whose income from business activities in 2020 will be lower by at least 50% than their income obtained from the same activity in 2019,
- the non-deducted amount of the loss can be accounted for according to the currently applicable regulations.
II. Postponement (optional) of the deadline for payment of tax on income from buildings for the months of March-May 2020 until 20 July 2020 (if the revenue is lower by at least 50%).
This applies to taxpayers whose income derived in a given month compared to the same period of the previous tax year will be at least 50% lower (and for those taxpayers who started their business in 2019 – compared to the average monthly revenue).
III. Waiver of applying the regulations on bad debts to taxpayers-debtors (if their revenue is reduced by at least 50%) in respect of PIT and CIT prepayments
- Taxpayers liable for the so-called bad debts will not be obliged to increase the income which is the base for calculation of the monthly prepayments in 2020 by the liabilities not paid on time.
- This applies to taxpayers whose income derived in the account periods (monthly or quarterly) will be lower by at least 50% compared to the same periods of 2019 due to adverse economic effects of SARS-COV-2.
IV. Postponement of the deadlines for payment of advance income tax collected on wages paid in March and April 2020 (until 1 June 2020).
V. The possibility for “small taxpayers” to abstain from simplified advance tax payments due for March – December 2020 if they suffer adverse economic effects of COVID-19.
VI. Possibility to deduct donations given to counteract COVID-19 from income (revenue) – cash or in-kind donations given to entities engaged in medical/healthcare activities can be deducted and so can donations given to the Materials Reserve Agency and the Central Base of Sanitary and Anti-Epidemic Reserves.
If the requirements specified in the regulations are satisfied (the period of the donation, the beneficiary), 200% of the donation value can be deducted.
VII. Postponement of the deadline for submission of transfer pricing information until 30 September
VIII. Postponement of the deadline for tax settlement and submission of tax returns for 2019
- PIT return – until 31 May 2020
- CIT return – until 31 May 2020 (for non-government organizations – until 31 July 2020).
IX. Possibility to make a single write-off on the value of fixed assets acquired for the purpose of production of goods intended to counteract COVID-19.
X. Postponement of the deadlines for submission of IFT-2R and ORD-U forms until the end of the fifth month following the end of the tax year.
CHANGES TO THE ACT ON GOODS AND SERVICES TAX
I. Postponement of the obligation to submit the new JPK_VAT file (the tax return and the records) from 1 April to 1 July 2020 for all taxpayers (taxpayers can, but are not obliged to, submit the new JPK_VAT file in May 2020).
II. Postponement of application of the new VAT matrix from 1 April 2020 to 1 July 2020.
III. Postponement of the effective date of the Binding Rate Information until 1 July 2020.
IV. Possibility to issue e-receipts
With the customer’s consent and in the way agreed with the customer, a receipt can be provided to the customer in an electronic form.
CHANGES TO OTHER TAXES
I. Changes to real estate tax
Adoption of regulations which enable communes to:
- introduce an exemption from the real estate tax for part of 2020 with respect to certain groups of entrepreneurs whose financial liquidity deteriorated in connection with adverse economic effects of COVID-19,
- extension, by way of an order of the executive bodies, of the deadlines for payment of the real estate tax, payable in April, May and June 2020 – no longer than until 30 September 2020.
II. Deferral of the tax on retail sales until 1 January 2021
OTHER CHANGES, POSTPONEMENT OF CERTAIN OBLIGATIONS
I. Temporary waiver of the extension fee with respect to amounts payable to the state treasury and the social insurance institution.
- Fiscal dues – no extension fee will be charged if taxes due and overdue, which constitute the state budget income, are spread to installments or deferred, on contributions payable in the period from 1 January 2020, based on an application filed in the period of the epidemic threat / the state of epidemic or in the period of 30 days thereafter.
- Amounts payable to the Social Insurance Institution (ZUS) – entrepreneurs who find it difficult to pay the contributions due for the period from January 2020, mandatorily collected by the ZUS, will be exempt from payment of the extension fee if an agreement for postponement of the payment date or an agreement for spreading the receivables into installments is concluded.
II. “Extinction” of the obligations under lease agreements in shopping malls with the sales area exceeding 2000 m2 with respect to entrepreneurs running a business which is prohibited. (“Extinction” means reciprocal release from performances, provided that the lessee makes an offer of “extension” of the lease by the period of prohibition plus 6 months, subject to hitherto terms and conditions, within 3 months of the end of the prohibition.)
III. Suspension of proceedings and inspections
In case of the state of epidemic threat or epidemic, the Authority will suspend ex officio or upon request:
- tax proceedings or tax inspection,
- customs and fiscal inspection,
- proceedings in matters within the scope of the Gambling Act.
IV. Extension of the time limit for tax scheme reporting (MDR): the deadlines of domestic tax scheme reporting which fall after 31 March 2020 will not commence and if they have commenced – they shall be suspended until 1 July 2020
V. Extension of the time limit for filing a notification of payment to an account not included in the White List of VAT Payers from 3 to 14 days, for the duration of the state of epidemic threat / the state of epidemic.
VI. Postponement of the obligation to provide information to the Central Register of Beneficiary Owners by 3 months.
VII. Extension of the time limit for individual tax rulings by the period of three months and granting the Minister of Finance the competence to extend said time limit by another period of up to 3 months, if necessary.
VIII. Postponement of the deadlines for submission of financial statements (annual reports)
On 31 March 2020, the Regulation of the Minister of Finance was published in the Journal of Laws: the deadline for submission of annual reports was extended by 3 months, until 30 June 2020. Also the deadline for approval of the annual reports was extended by 3 months – until 30 September 2020. Natural persons who keep books of account submit their financial statements to the Head of KAS electronically by 31 July 2020.
CHANGES INVOLVING EMPLOYERS, EMPLOYEES AND THE SOCIAL INSURANCE
I. Postponement by half a year of the obligation relating to the Employee Capital Plans (PPK) in medium-size enterprises, i.e. conclusion of the PPK management agreements and PPK operating agreements (until 27 October 2020 and 10 November 2020, respectively).
II. Wage subsidies for employers experiencing economic downtime, financed from the Guaranteed Employee Benefits Fund).
50% of the minimum salary or, with the reduced working time by 20%, no more than up to 1/2 FTE: subsidies amounting to half the wages but no more than 40% of the average salary for work), in the period of economic downtime or reduced working time adopted by the employer due to COVID-19-triggered reduction of turnover, which shall be construed to mean the sales of goods and services by quantity or value:
- by no less then 15% (the ratio of total turnover over 2 successive months in the period from January 2020 to the total turnover from the corresponding 2 months of last year) or
- by no less then 25% of turnover in a month during the period from January 2020 compared with the preceding month.
The funds from the Guaranteed Employee Benefits Fund may be used to cover contributions to social insurance for employees, payable by the employer on the benefits awarded.
III. Partial subsidizing of the costs of employee salaries and contributions to social insurance
Micro-, small and medium-size enterprises which employ personnel, and some costs of business activities with respect to entrepreneurs who are natural persons not employing personnel, for a period not exceeding 3 months, depending on the turnover decrease.
The amount of the subsidy will depend on the value of the turnover decrease recorded by the Employer. If the turnover decreases by:
- at least 30% – to an amount which represents the sum total of 50% of the remuneration of the employees covered by the application for subsidy and contributions to social insurance payable thereon, no more than 50% of the minimum salary increased by the social insurance contributions payable by the employer with respect to each employee;
- at least 50% – to an amount which represents the sum total of 70% of the remuneration of the employees covered by the application for subsidy and contributions to social insurance payable thereon, no more than 70% of the minimum salary increased by the social insurance contributions payable by the employer with respect to each employee;
- at least 80% – to an amount which represents the sum total of 90% of the remuneration of the employees covered by the application for subsidy and contributions to social insurance payable thereon, no more than 90% of the minimum salary increased by the social insurance contributions payable by the employer with respect to each employee.
The subsidies can be awarded with respect to both: employees and individuals performing work on the basis of tolling agreements or short-term job contracts or other contracts for services to which, pursuant to the Civil Code, the provisions concerning short-term jobs apply.
The subsidy is to be awarded for a period of up to 3 months, and the Council of Ministers can extend it upon a relevant ordinance.
IV. Benefits payable due to economic downtime for contractors and self-employed
- for contractors and self-employed – at 80% of the minimum salary if the revenues decreased by at least 15% compared with the preceding month, provided that the revenue in the preceding month was lower than 300% of the average salary,
- persons who operate based on a tax card or lump sum tax, exempt from VAT – at 50% of the minimum salary.
V. Changes to the flexible working time
- limitation of the continuous daily rest to no more than 8 hours (instead of 11 hours required as the minimum under the Labour Code) and the continuous weekly rest to no more than 32 hours (instead of the minimum 35 hours required by the Labour Code);
- conclusion of an agreement on implementation of the equivalent working time system which permits extension of the daily working time to no more than 12 hours with no need to satisfy the requirements for implementation of this working time system over a longer account period;
- conclusion of an agreement on conditions of employment less favourable than those stipulated in the employment contracts with such employees, within the scope and for the duration set out in the agreement.
VI. Suspension of the obligatory medical examinations for employees
Medical certificates which became invalid after 7 March 2020 remain effective, no longer than for 60 days from the date on which the state of epidemic is recalled. Promptly after the state of epidemic is recalled, the employer and the employee are obliged to resume the suspended duties. This also applies to medical certificates issued with respect to preliminary and periodic medical examinations and checkups, as well as other medical and psychological certificates.
VII. Employment of foreigners
- Extension of validity of work permits for foreigners (and decisions on extension of work permits) by operation of law, and extension of the permissible periods of work without a work permit in connection with a declaration on entrusting a paid activity to a foreigner, for the duration of the state of epidemic threat or epidemic announced in connection with SARS-CoV-2 and for 30 days thereafter.
- Postponement of the dates for submission of applications for residence permits, extension of a visa or extension of residence under visa-free regime, if they fall during the state of epidemic threat or epidemic, extension of validity of temporary residence permits and domestic visas by the force of law (for up to 30 days following revocation of said state).
VIII. Exemption from contributions to social insurance (ZUS)
Microenterprises and the self-employed are exempt from payment of contributions to social and health insurance for a period of 3 months.
- One-off loans of up to PLN 5 thousand to micro-enterprises
- Obligation to notify the Social Insurance Institution about conclusion of a contract for a specific task
Applies to a contribution payer or a natural person who contracts the specific task if the contract is concluded with a person not employed by the payer under an employment contract or if no work under such a contract is done for the employer with whom the person is bound by a contract of employment, within 7 days of conclusion of the contract.
We remain at your service and we are ready to answer any questions you may have regarding the new anti-crisis regulations.