Kategória: Corona

COVID-19 and its impact on Court Proceedings (2/3)

Posted on by Jessica Zenz-Spitzweg

2. Reduction of court operations

For the period of the general measures to prevent the spread of COVID-19, hearings and oral hearings shall only be held under certain conditions (prevention of danger to life and limb, security and freedom, etc.). This also applies to the issuing and execution of enforcement orders and to the taking of oral minutes. Urgently required hearings of a party or oral hearings can also be held using suitable technical means of communication (in particular video conferencing).

If, as a result of the appearance and dissemination of COVID-19, the activities of a court cease (§ 161 ZPO, § 25 (1) 5 AußStrG), the Federal Minister of Justice must announce this fact on the website of the Federal Ministry of Justice. The Higher Regional Court shall then, at the request of one of the parties, designate another court to hear and decide the case if procedural steps are to be taken which are urgently required, inter alia, to avert a danger to life and limb, security and freedom. Only such judicial acts are to be completed as are urgently required in order to avert a danger to life and limb, security and freedom or to prevent substantial and irreparable damage to a party to the proceedings. However, notifications made by electronic legal transactions shall continue to be made.

In practice, it can be assumed that – except in urgent individual cases – no negotiations will take place in civil proceedings until at least the end of April 2019 and that there will therefore be corresponding procedural delays. Delays in written settlements are also to be expected due to the limited number of proceedings.

COVID-19 and its impact on Court Proceedings (1/3)

Posted on by Jessica Zenz-Spitzweg

1. Interruption of time limits in legal proceedings

Court operations will continue until further notice, so that proceedings will generally be continued.

Due to the 2.COVID-19-law package, which comes into force on Monday, 23 March 2020 and will largely expire at the end of 31 December 2020, an interruption of the deadline has been decided. In legal proceedings, all procedural time limits whose triggering event falls within the period after the entry into force of this Federal Act, as well as procedural time limits which have not yet expired by the time this Federal Act enters into force, shall be suspended until the end of 30 April 2020. In the explanations it is clearly stated that in civil cases (civil proceedings, non-contentious proceedings, land register and commercial register proceedings, execution proceedings, insolvency proceedings) – apart from the exceptions stated in the Act – all procedural time limits (both statutory and judicial time limits) are interrupted. They shall begin to run anew on 1 May 2020.

Exceptions are proceedings in which the court decides on the lawfulness of an upright deprivation of liberty under the Accommodation Act, the Home Residence Act, the Tuberculosis Act or the Epidemic Act 1950, as well as for benefit periods.

However, in certain cases (averting danger to life and limb, safety and freedom or to prevent substantial and irreparable damage to a party to the proceedings, etc.), the court may declare in the respective proceedings that a time limit is not interrupted. At the same time, a new reasonable deadline shall be set. This decision may not be appealed against.

Furthermore, the period from the entry into force of this Federal Act until the end of Ap-ril 30, 2020, shall not be included in the period in which an action or application is to be filed with a court or a statement is to be made. This concerns, for example, limitation periods, the period for actions for trespass under Section 454 of the German Code of Civil Procedure (ZPO), etc.

The Federal Minister of Justice may, by ordinance, extend the ordered general interruption of time limits to the extent that this is necessary to prevent and combat the dissemination of COVID-19.

As long as the time limits are interrupted, certain facilitations apply to the service with proof of service of documents to be transmitted by courts or administrative authorities as well as the service of documents by foreign authorities (§ 1) to be effected by the courts or administrative authorities.

Corona crisis – „Don’t panic!” Correct customer communication in the financial sector

Posted on by Ana Pandelea

What exactly is the problem?

Crises that affect the capital markets have always led to short-circuit reactions among investors. Since stock exchanges have theoretically processed every piece of information the moment it ceases to be insider information, reactive action on the capital market is usually too late.

The usual advice in stock market crises such as those triggered by the current corona crisis is therefore always the same: „Don’t panic!” Consequently, private wealth managers usually advise their clients to be patient and prudent in times of crisis. This advice is correct, but there are numerous legal stumbling blocks that you should avoid when communicating with your clients and choosing your course of action.

What do you need to do now?

Carefully review your clients’ portfolios in light of the current situation on the capital market, taking into account various future scenarios. Pay particular attention to compliance with agreed investment limits, loss thresholds, investment guidelines and customer wishes. If you identify a need for action, do not act against your own advice: „Don’t panic!”, so this also applies to you.

Choose your communication with your clients carefully. Obtain instructions from your customers if necessary.

If there are several options for action, make your choice carefully and document it in detail.

What are the risks for you?

In investor protection processes, investors always bring up the same arguments again and again when investments prove to be loss-making in retrospect:

  • „I did not understand the product, but blindly trusted my advisor’s advice”
  • „If I had known that my investment strategy would have this effect, I would have chosen another”
  • „I only chose this investment strategy because my advisor told me that it had to be designed in this way for efficient advice”
  • „My counselor advised me to do this”
  • „Despite the crisis, my advisor has not carefully informed me of its possible consequences”

The result is not only lengthy and therefore costly investor protection proceedings, which are usually conducted through several courts and therefore over many years. In the worst case scenario, clients may also claim damages, as a result of which they would ultimately have to pay for the losses caused by the Corona crisis.

What other risks exist?

There are also considerable regulatory risks in the medium and long term.

Particularly after the subprime crisis in the years from 2007 onwards, the regulatory and supervisory authorities spent almost 10 years drawing conclusions for the financial industry, some of which are still being implemented today. Even „investor protection lawyers” have jumped on this bandwagon and have covered the financial industry with lawsuits.

Not least because internal and external processes, documentation guidelines and the information and reporting systems of numerous private wealth managers were not adequate, a very consumer-friendly legal system has emerged, which has cost the financial industry billions. The regulatory authorities have derived numerous measures from this, which have been reflected in MiFID and MiFID II, for example.

The corona crisis has the potential to have an even more serious impact on the real economy and thus on investors than all crises in the past 50 years. If this potential has a corresponding regulatory impact, the financial industry will also face some regulatory challenges in the coming decade.

What can we do for you?

We have many years of experience in defending numerous investor protection lawsuits and the first test case in the financial services sector. In addition, we know what you need to pay attention to in your daily business due to our consulting practice. In addition, we communicate with the regulatory authorities on an equal footing and can also proactively influence them.

We make this accumulated know-how available to you in the well-known quality and speed, even in times of „Don’t panic!”

When communicating with your customers, customer advisors and external sales staff, we ensure that it is not only comprehensible but also legally sound.

When selecting the right courses of action and developing internal and external processes and documentation guidelines, we ensure that your records, procedures and decisions are legally sound.

Finally, we are happy to coordinate with the regulatory authorities in order to agree on packages of measures and to reduce or, in some cases, completely eliminate intervention by the authorities „ex officio”.

Please do not hesitate to contact us!

COVID-19 – answers to burning labour law issues

Posted on by Lisa Fortmüller

Can employees stay at home for fear of infection?

The answer is NO!

Employees are not entitled to refuse their work only for fear of being infected with the corona virus.

Employees are also not entitled to work in home or mobile office from now on. However, this may soon be in the employer`s urgent interest, e.g. in the event of a closure of the company. Therefore, it is essential that a mutually agreed employment in a mobile office is contractually agreed. Please contact us for more information.   

Kindergarten and schools are closed. Are employees now allowed to stay at home if they have no other caregiver for their children requiring care?

The answer is still NO!

Employees are obliged to organize replacement care for their healthy child.

However, if the case is such that it can be proven that no other caregiver is available, employee may under certain circumstances have the right to refuse his or her performance, with the legal consequences that the obligation to pay remuneration also does not apply (principle: “no remuneration without work”) There is in exception to the principle “no remuneration without work” (Sec. 616 BGB), which obliges the employer to continue to pay for a relatively insignificant period of time. A guideline of 5 days applies here. However, this only applies if the employment agreement does not exclude the application of this provision, which must be examined in each individual case.

Employer and the work council can exclude Sec. 616 BGB in a works agreement in order to secure the existence of the employer.

Employer and employee should regulate in the employment agreement how the “release from work” should take place:

  • Reducing overtime,
  • Build minus hours to a certain limit if a working time account exists,
  • Holiday reduction,
  • Possible a few days Sec. 616 BGB,
  • Unpaid garden leave.

What is the legal situation if my employees do not show up for work due to a public transport stop?

In this case, the employer is not obliged to any renumeration because the travel risk is assigned to the employee’s sphere of risk.

Can the employer unilaterally close his or her business and in doing so unilaterally order holiday or instruct the employees to reduce time credits or company holidays?

Basically: A clear YES!

If the employer closes the business based on his own decision, for example in order to protect his employees, he bears the renumeration risk in accordance with the principle of the so-called business risk theory (Sec. 615 sent. 3 BGB). This also applies if the disturbance – as in the case of the coronavirus- does not originate from a sphere of danger that can be influenced by the employer.

In order to minimize the damage, it is recommended that employees first agree to work from home (please use our mobile-office-agreement – request them), apply for short-time work, unilaterally grant employees any remaining leave entitlements or reduce overtime accounts. A unilateral granting of holiday by the employer is exceptionally excluded only if the employee has already applied for and been granted his entire leave entitlement or if the granting of leave is contrary to other leave wishes of the employee.

What happens if there is a suspicious case in our company? 

If there is a suspected case of the coronavirus in the company, the employer must inform the rest of the employees about this case in order to identify and clarify possible contact persons as quickly as possible.

The employer, on the other hand, has no obligation to report to the health authorities, as the obligation to report is directed to the diagnosing doctor, but not to the employer, in accordance with Sec. 8 IfSG.

What happens if an employee has been tested positive for Covid19/coronavirus?

If the suspicion of an infection with Covid19 is confirmed, the first thing that applies to the affected employee is that he or she is incapable of work and therefore has a claim against the employer for continuation of regular pay for a period of up to 6 weeks in accordance with Sec. 3 para 1, 4 EFZG.

The legal situation is different if one or more employees are affected by the order of quarantine within the meaning of Sec. 30 IfSG by the health authority.

In this case, the provisions of Sec. 616 para 1 BGB in conjunction with Sec. 30 IfSG secures the renumeration of the affected employees. An employee does not lose his or her right of renumeration against his employer if he or she is prevented from performing his or her work for a relatively insignificant period of time through no fault of his or her own. Such prevention and thus a claim for continued payment of remuneration against the employer applies in the case of a prohibition of activity due to official measures according to the IfSG according to the highest judicial jurisdiction.

In addition, the IfSG stipulates that the employer is obliged under Sec. 56 para 1, 2, IfSG to pay compensation in the amount of the net loss of earnings to the employees concerned for a period of up to 6 weeks instead of the health authority, i.e. as paying agent.

At the beginning of the seventh week, the renumeration is granted directly by the state in the amount of the sickness benefit.

As in all cases, it is advisable to first discuss with the employee the reduction of vacation and overtime as well as comparable instruments or to order them unilaterally.

What can the employer do against an official closure order?

In principle, the authorities have very far-reaching rights of intervention within the legal framework of the Infection Protection Act (IfSG). This includes in particular the right of the health authorities to close down entire businesses. Individual cases of infection among employees are sufficient for this.

Initially, the employer has no possibility to take action against the closure order. The employer only has the right to subsequently assert any claims for damages against the authorities.

Under which conditions can the employer assert a claim for reimbursement? Which deadlines apply?

If the employer is called upon to pay compensation under the IfSG, he or she can apply to the competent authority within three months for reimbursement of the amounts paid. Pursuant to Sec. 56, para 12 IfSG, the employer may also apply to the competent authority for an advance payment of the anticipated amount to be reimbursed in accordance with sec. 56 para 12 IfSG. Further compensation benefits may, for example, be granted to self-employed persons under certain circumstances (see Sec. 56, para 4 IfSG).

How do I as a company introduce short-time work?

With the „Act on the temporary crisis-related improvement of the regulations for short-time work compensation”, the Bundestag has greatly simplified the access of companies to receive short-time work compensation. The requirements are now as follows:

  1. If orders are missing due to difficult economic developments, a company can apply for short-time work if at least 10 percent of the employees could be affected by the loss of work. This threshold was previously 30 percent of the workforce in accordance with Sec. 96 SGB III.
  2. It has also changed that, by way of derogation from Section 96 para 4 sent. 2, point 3, the structure of negative working time balances can be dispensed in whole or in part before payment of the short-time work allowance. The current law has so far required that companies where agreements on fluctuations in working hours are used, these should also be used to avoid short-time work and be reduced.
  3. Temporary workers will also be able to receive short-time work compensation in the future.
  4. The social security contributions that employers normally have to pay for their employees will in future be fully reimbursed by the Federal Labour Office. This is intented to create an incentive to make greater use of periods of short-time work for the further training of employees.

Notification to the Federal Labour Office must be in writing or electronically. Locally, the Federal Labour Office in whose district the business is located is responsible. The employer itself or the works council is entitled to file an application. Within the scope of the notification, the company must provide credible evidence of the requirements by submitting documents. These documents include: Documents showing the cause of the loss of working hours; comparative figures showing under-utilisation; information on the temporary nature of the loss of working hours; statement by the works council on short-time working; agreement on the introduction of short-time work and agreements on working time accounts, if available. 

Question relating to co-determination

In principle, the co-determination rights of the works council remain in full. In particular, the works council must be involved in a transfer in accordance with Section 99 of the BetrVG. A transfer is also generally available in the case of temporary employment in the mobile office. We recommend the following procedure:

  • Employers announce to the works council that the (local) transfer to the home or mobile office will initially only be for a maximum of 4 weeks. With it, it can be argued that still no participation-obligatory transfer in the sense § 95 para. 3 BetrVG would exist. It remains to be considered that the circumstances of the work change seriously and consequently already with the first day of the transfer also obligation of codetermination exists.
  • Just do it with references to the exceptional situation. If the works council should nevertheless take legal action after Sec. 101 BetrVG, employers could initially justify the local transfer by means of § 100 BetrVG and, if necessary, file a court application for a substitution of consent themselves. In this context, it is also questionable whether the functionality of the courts can be guaranteed if the quarantine orders, which can no longer be ruled out, are issued.

Co-determination rights also exist in connection with health protection, Sec. 87 para 1, No. 7, BetrVG, as well as in the case of a possible vacation order and/or unilateral ordering of company vacations.

The co-determination of the work council is however excluded if the employer only fulfills official instructions.

Data Protection: Legitimate measures

In the light of the events that have taken place, the constant re-infection and the lack of uniform lines of the European Data Protection Authorities, the following measures are not exhaustive and definitive. In our opinion, the following measures are currently compatible with data protection law:

  1. Employer’s right to interview: The employer is entitled at any time to require his employees to state whether he/she was in a risk area or had direct contact with infected persons. In principle, the employer is only entitled to negative information from the employee, but in our opinion the employee is also obliged to answer truthfully in order to avert damage to third parties.
  2. Voluntary self-disclosure – or questionnaires on whereabouts and symptoms: Information can also be obtained in the form of a questionnaire. Here however a right of codetermination of the work council exists. It would be preferable if the employee gave his or her consent before filling out the self-disclosure form. This consent has the following conditions:
  • Written consent before the measure,
  • Informative consent, i.e. the purpose of the information is clearly defined,
  • Voluntarily, i.e. without pressure,
  • Instruction about the right of revocation,
  • Instruction about no adverse consequences in case of refusal.

The consent of the employees is legally mandatory in case of:

  • Taking the temperature and
  • collecting the current private mobile phone numbers or other contact details of employees for information purposes in the event of closure of the business or similar cases.

Further restrictions for shopping centers

Posted on by Lisa Fortmüller


The most recent Regulation tightens the restrictions on retail and services in commercial developments of over 2,000 m2. Limitations applicable to office buildings (canteens, restaurants, cafés) have been extended without any major modifications.

Starting from March 21, 2020, what entities can operate in retail complexes of over 2,000 sqm?

Tenants whose main business consists in the sale of:

a. groceries;
b. cosmetics other than fragrances and beauty products;
c. toiletries;
d. cleaning agents;
e. medicinal products (incl. ones sold at pharmacies);
f. medical devices;
g. foodstuffs for particular nutritional uses, as defined in article 3 section 3 item 43 of the Food and Nutrition Safety Act of August 25, 2006;
h. newspapers;
i. construction / DIY products;
j. pet supplies; or
k. fuels.

Tenants offering the following types of services as their main business activity: medical, banking, insurance, postal or laundry services, or preparation of food for takeaway and/or delivery only.

Any Tenants other than listed in items 1 and 2 above cannot run their operations.

It is now completely forbidden to conduct any retail operations or offer any services (the Regulation implies that the ban covers all types of services) at retail stands/kiosks in malls.

Some Tenants that could conduct their business until today will now have to close their stores for customers – this applies to travel agencies, telecommunications services, jewelers, etc.

We are analyzing the newly-adopted Regulation and will be ready to assist you further in no time.

Please feel free to contact us for any assistance.

Calling all businesses! Want to help? We’re here to help you at no cost

Posted on by Lisa Fortmüller

Want to support Poland in fighting the pandemic?

Planning to donate goods or services to hospitals? Wish to provide machines, equipment or premises?

Worried that your good intentions will backfire, and you’ll end up in a maze of taxes and paperwork?

We want to help, as well.

Our tax and legal team will assist you for free. We are ready to recommend the best tax options and prepare relevant documents.

Please get in touch and share.

Michał Wielhorski
Managing Partner
+48 605 911 303
michal.wielhorski@actlegal-bsww.com

Małgorzata Wąsowska
Partner | Head of Tax
+48 691 477 047
malgorzata.wasowska@actlegal-bsww.com

Another batch of anti-crisis tax measures

Posted on by Lisa Fortmüller


Based on its announcement of March 19, 2020, the Ministry of Finance is suggesting the following types of anti-crisis solutions related to taxes.

– Potential tax loss carryback (PIT and CIT)
The loss recorded in 2020 can be applied to the previous profitable year (2019). For that purpose, it will be necessary to submit an amended tax return for 2019. This can be done by taxpayers whose revenue generated in 2020 drops by at least 50% against the 2019 figure. It will be possible to deduct a loss of up to PLN 5m from the 2019 income (any surplus over that amount might be applied to subsequent years).

– Extension of the deadline for payment of the minimum tax on commercial real estate for March-May 2020 until July 20, 2020.
This option can be used by taxpayers whose revenue in a given month, compared to the corresponding month of the previous fiscal year, drops by at least 50%. This tax can also be paid at a later date by taxpayers that did not generate revenues in the previous fiscal year but are bearing the negative implications of coronavirus in March-May 2020.

– Preclusion of the application of the so-called bad debt regulations with respect to debtors that should take unpaid obligations into account when calculating income tax advances.
This exemption will apply to taxpayers whose revenues generated in specific billing cycles (monthly or quarterly) decreased by at least 50% against corresponding periods in 2019. This option can also be used by taxpayers that did not generate revenues in the previous fiscal year but are bearing the negative implications of coronavirus in 2020.

– Possibility to drop simplified income tax advances; calculating monthly advances on the basis of current profits, instead.
The so-called “small taxpayers” will be entitled to drop simplified income tax advances. Those who decide to opt out of simplified advances in March-December 2020 will be calculating their monthly advance payments on the basis of the current income.

– Extended deadline for CIT-8 filing for NGOs.

– Newly-introduced deduction of donations (cash or in-kind) from PIT and CIT – this applies to donations aimed at prevention and combating of the coronavirus epidemic, given to entities that offer healthcare services, incl. sanitary transport, as well the Material Reserves Agency and the Central Base of Sanitary and Anti-Epidemic Reserves.

– Extension of the deadline for advance payroll tax payments for March and April.
The plan is to extend the deadline until June 01, 2020.

– Temporary waiver of the extension fee for payment in instalments or deferral of tax and tax arrears.

– Deferred obligation to submit new SAF-T_VAT for large enterprises – until July 01, 2020.

– Deferral of submissions with the Central Register of Beneficial Owners – until July 01, 2020.

– Possibility to introduce property tax exemptions at the municipal level for enterprises suffering from the negative impact of the coronavirus epidemic.

– Increased flexibility of the National Revenue Administration with respect to performance of its tasks in the time of crisis. Possibility to suspend tax audits, tax procedures and customs/tax inspections while the state of epidemic threat is in effect.

– More flexible financial management rules for entities operating in the public finance sector, incl. local authorities, special-purpose funds, executive agencies and the national budget, in order to offer the quickest and most efficient way to use public funds for purposes related to COVID-19 prevention.

– Possibility to suspend administrative enforcement procedures related to financial obligations.

Please feel free to contact us for any assistance.

State of epidemic threat vs. management board’s liability for failure to file for bankruptcy on time

Posted on by Lisa Fortmüller

There is no doubt that the coronavirus pandemic and the ensuing state of epidemic threat will affect many businesses, some of which may even suffer cash flow difficulties. Struggling businesses may be faced with the question whether their financial troubles are serious enough to lead to insolvency.

This brings us to another question, i.e. whether the restrictions imposed as a result of the state of epidemic threat and legislation passed in connection with it affect Polish businesses’ obligations related to filing for bankruptcy within the prescribed deadline.

Obligation to file for bankruptcy

Unfortunately, none of the legislative acts adopted so far in response to the pandemic modifies the obligation to file for bankruptcy. After the Cabinet Council meeting of March 18, 2020, the President and Prime Minister announced a number of relief measures to mitigate the coronavirus’ impact on businesses. With detailed legislative solutions still in progress, the government remains silent on a regulation that would match the one adopted in Germany, where the obligation to file for bankruptcy was suspended until September 30, 2020.

In all likelihood, the insolvency criteria and deadlines for filing for bankruptcy will remain unchanged in spite of the crisis caused by the coronavirus pandemic.

Consequently, we need to bear in mind that:
– each insolvent business is required to file for bankruptcy within 30 days from the day of becoming insolvent;
– this deadline is triggered irrespective of the subjective impossibility to determine if a business has become insolvent; in other words, even if someone cannot tell whether their business is insolvent, they are still required to file for bankruptcy within 30 days of the day when the company is no longer able to pay its financial obligations;
– any potential difficulties resulting from the recently restricted operation of courts, authorities or banks do not prevent this deadline from being triggered, either.

Liability for damage resulting from failure to file for bankruptcy on time

The potential liability of a company’s directors might be assessed from a somewhat different perspective when a creditor suffers damage as a result of failure to file for bankruptcy on time (article 21 section 3 of the Bankruptcy Law; article 299 § 1 of the Commercial Companies Code; article 116 § 1 of the Tax Code).

In each of the above cases, a management board member may be exempt from liability if s/he is able to demonstrate (among others) that s/he is not at fault for the failure to file for bankruptcy on time.

Will it be possible for management board members to avoid liability due to the coronavirus pandemic in each case? Of course not.

The situation of a management board member who is hospitalized or quarantined due to coronavirus infection, and is consequently unable to manage company affairs, seems relatively clear. An infected management board member has very limited options of signing any document, e.g. a bankruptcy petition or a relevant power of attorney, which may potentially be used as the basis for exemption from liability for failure to file for bankruptcy on time.

It should be noted, however, that if the aforesaid circumstances apply to only one of several members of a governing body, its other members remain liable for failure to file for bankruptcy on time.

The situation might get more complex when management board members are able to run company affairs (e.g. none of is hospitalized or quarantined) but have limited access to financial information necessary to assess the company’s condition because the accounting staff member responsible for providing them is hospitalized, quarantined or has limited access to documents by reason of working from home. Situations of this kind should be analyzed closely on a case-by-case basis.

Undoubtedly, management board members should always remember about three basic issues:
– a management board member occupies a special place in the company structure. His/her actions must pass the test of increased due diligence required of professionals;
– if, as a result of the coronavirus pandemic, a company finds itself in financial distress, its management board should make sure that a proper record of the difficulties is kept. For instance, if access to electronic documents is limited by reason of server malfunction, a relevant e-mail message should be sent to the service provider or an internal memo should be prepared. These solutions may seem trivial but will be important once a management board member runs the risk of being held accountable for damage suffered by a creditor as a result of failure to file for bankruptcy on time;
– a management board member who steps down or is dismissed after the bankruptcy filing deadline is triggered may still be held accountable for damage, which is all the more reason to keep in mind the issues discussed above.

Recommended actions:

  1. Staying on top of the company’s financial situation and taking notice of all problems (incl. minor and temporary ones) with timely payments because seemingly trivial events may have serious consequences when a crisis hits the market.
  2. Responding immediately to any difficulties (e.g. negotiating with business partners, renegotiating payment deadlines and terms).
  3. Recording diligently any difficulties the company encounters and remedial actions taken in response.

We are available to help businesses and management board members through this difficult time. Our law firm is a one-stop shop for any questions you may have. Do not hesitate to contact us for any assistance.

Ant-crisis measures – aid package covering taxes and social insurance (ZUS) contributions

Posted on by Lisa Fortmüller

On March 18, 2020, during a conference held after the Cabinet Council meeting, the President and Prime Minister of Poland announced that works are underway on a range of draft bills as part of the so-called “anti-crisis shield.” They are supposed to form an aid package aimed at prevention of the negative impact of the coronavirus epidemic. The anti-crisis shield is going to be based on 5 pillars: employee protection, financial liquidity, healthcare support, security of deposits and public investments. These actions may include deferral of ZUS contributions, support for individuals hired on the basis of civil-law contracts, and payment holidays. You can find more information in our general alert – Anti-crisis package. Unfortunately, there are no specific details of the anticipated reliefs and exemptions related to tax settlements. Additionally, the Chancellery of the Prime Minister has indicated that it intends to postpone the deadlines for submission of PIT-36, PIT-36L, PIT-38 and PIT-39 until the end of June 2020. Also, local authorities (e.g. the Mayor of Kraków) are declaring their plans to support businesses with a property tax relief if the COVID-19 threat affects financial liquidity.

ZUS [Social Insurance Institution] website provides information about the application of reliefs in relation to coronavirus, based on which businesses will be able to use the following simplified types of assistance:
• deferral of the payment term by 3 months for the period of February – April 2020;
• 3-month suspension of performance of an agreement executed with ZUS, in which the payment dates for instalments or contributions fall between March and May 2020, and, consequently, 3-month extension of the agreement term.

In an application, it is necessary to specify how the coronavirus epidemic has influenced the business entity’s financial condition. Needless to say, the fact that an application is submitted does not automatically mean that it will be approved.

Government unveils major relief package

Posted on by Lisa Fortmüller


On Wednesday (18 March 2020), the President and Prime Minister announced a relief package worth PLN 212bn to counter the fallout from the coronavirus outbreak. Although full details of the relief measures are not yet available, it is clear that the stimulus plan is going to be massive by Polish standards. The majority of the funds are intended to help struggling businesses.

The package, nicknamed the “anti-crisis shield,” will be based on five pillars:

  1. labor market relief measures,
  2. business relief measures,
  3. additional funding for health services,
  4. financial sector security measures,
  5. public investment package.

The measures making up the first pillar are designed to help workers keep their jobs. The government will contribute to the salaries paid by struggling businesses (it is not yet clear what criteria businesses and employees will need to satisfy to qualify for the help). The government will cover up to 40% of average salary paid on the basis of an employment contract, with the employers paying the other 40%. In case of self-employed persons and those working under civil-law contracts, 80% of the minimum salary will be paid from public funds. The allowances for parents who need to look after a child due to the closure of day care facilities will be also extended. The Office of Competition and Consumer Protection (UOKiK) and other government agencies dealing with price control are to implement measures to counter excessive pricing.

The measures to be implemented as part of the second pillar are primarily intended to inject liquidity into the economy and will be handled by development institutions, as defined in the Development Institutions Act – mainly the Polish Development Bank (BGK), the Polish Development Fund (PFR) and the Industrial Development Agency (ARP). Loan guarantee will be increased to 80% of the loan. Businesses will be also offered preferential micro-loans of up to PLN 5thous. A helping hand is also extended to the transport sector, with ARP offering to cover a part of operational lease payments owed by companies operating in the sector. It was also announced that businesses will be able to delay social security payments or divide them into instalments. There are plans that contractual penalties stipulated in contracts executed under the Public Procurement Law will not be enforced. Unlike in Germany, the government was silent on the extension of bankruptcy filing deadline.

As part of the third pillar, the health services are due to receive PLN 7.5bn, which especially means stepping up the financing for infectious diseases hospitals.

The measures covered by the forth pillar aim to increase the security of the financial sector, incl. bank deposits, however, detailed information about the solutions have yet to be provided by the government, cooperating with the Polish Financial Supervision Authority (KNF) and the National Bank of Poland (NBP).

The last pillar covers a boost to public investment worth PLN 30bn. The investments are to focus on improving energy and transport infrastructure as well as digitalization and environment protection.

Poland’s leaders paint a picture of a massive and ambitious stimulus plan to save the economy from the coronavirus crisis. The President stated that details of the legislation about to be passed would be available in the days to come. We will keep you up to date on the latest developments.