Poland: Epidemic as basis for tax relief

We are still waiting for the draft special-purpose tax act. Plans for its adoption were announced by the Ministry of Development. It is supposed to include a range of relief measures for taxpayers, such as postponement of the effective date of the “new” SAF-T VAT, quicker VAT refunds and easier application of the split payment mechanism (as discussed in further detail in our tax alert of March 13, 2020).

Payment reliefs

In its official announcement, the Ministry of Finance declared that “in case of negative financial consequences for businesses, arising from the coronavirus epidemic, tax offices will take these unusual circumstances into account while processing applications for relief in payment of tax obligations (payment term deferral, payment in instalments, cancellation of tax debt, etc.).” Taxpayers’ applications related to the above will be examined before any others.

If economic analyses lead you to a conclusion that financial liquidity might be affected, we recommend prompt submission of an application for a relevant relief. Such application should be supported with adequate financial forecasts and a description of the taxpayer’s justified interest which – in our opinion – emerges when the ability to engage in business operations is restricted on the basis of a special-purpose act.

Requests and recommendations

In our opinion, the solutions presented by the aforesaid Ministries are incomplete, meaning that additional reliefs and facilitations should be added to them. In view of limited resources, it might turn out to be impossible to perform tax and accounting obligations in a timely fashion. In particular, the special-purpose act should include solutions that reschedule the deadlines for tax/accounting obligations, incl.
• postponing deadlines for submission of annual CIT-8 returns for 2019, annual PIT returns for 2019 and the annual IFT-2R form for non-residents;
• postponing the deadline for preparation, signing and approval of 2019 financial statements;
• lack of sanctions for failure to timely submit SAF-T, VAT returns and mandatory disclosure reports, or (optionally) deferral of submission dates;
• lack of sanctions for untimely payment of CIT, PIT and VAT advances, as well as property tax instalments;
• suspension of ongoing tax audits and refraining from any new ones.

Please feel free to contact us and communicate your needs related to the ad-hoc assistance that should be offered as part of the special-purpose tax act. Any needs that you report will be forwarded to relevant Ministries.

0% VAT on donation of medical products

In the meantime, on March 12, 2020, the Ministry of Finance published a draft regulation pursuant to which entities that donate the following types of goods will be able to apply the 0% VAT rate on such donation: medical devices, laboratory glassware, laboratory equipment, medicines, active substances, biocidal products (only disinfectants and specialist diagnostic tests used for analysis and identification of pathogens in water, air and soil), personal protective equipment (only masks, protective suits, shoe protectors, caps and gloves). The above applies on condition that a written donation agreement is executed between a taxpayer and the Material Reserves Agency or the Central Base of Sanitary and Anti-Epidemic Reserves, clearly specifying that the donated goods will be used for the aforesaid entities’ tasks related to combating risks caused by SARS CoV-2. In our opinion, donors should retain their right to deduct VAT on the donated goods. The draft act entails the possibility to apply the 0% VAT rate for donations made between February 01, 2020 and August 31, 2020.