The crisis we have been experiencing for a few weeks is something extraordinary that we never imagined living. In every aspect, from human to economic, the changes are huge and they hit all of us. The impact of this pandemic forced the governments of all the countries of the world to react without being prepared to carry out a project as important and different from what had happened until then. In Europe, where the consequences of the pandemic have appeared very virulent and without centralized management by the European Union, each country has started to prepare its own measures to tackle what is already here, but above all to curb the economic impact which is about to come.
In case of Poland, after long week of preparation and public debate Polish Parliament accepted March 31st the package of legal acts known as “anti-crisis shield”. The proposed changes are aimed at protecting labour market and improving companies’ cash flow. The size of the company and the type of industry will decide on the scope of the support.
On April 16th, the Polish Government approved new temporary measures to try to combat the consequences of the COVID-19 crisis. Under the name of ‘second anti-crisis shield’ it focuses mainly on clarifying the issues that arose after the first package of measures, as well as adjustments to the requirements.
In first place, the most important tax solutions in relation to value added tax (VAT) are:
- Postponing the obligation to submit a new JPK_VAT file for large companies (declaration and records) from 1 April to 1 July 2020.
- Postponing the date of entry into force of new VAT rates matrix from 1 April to 1 July 2020
- Partially postponing the date of entry into force of provisions on Binding Information Rates until 1 July 2020.
- Extension of the deadline for submitting a notification of payment to the unregistered account (the so-called White List) from 3 to 14 days.
In the case of income taxes for individuals and legal entities we can highlight:
- Postponing the deadline for payment of PIT advances on remuneration paid in March and April 2020 (until 1 June 2020).
- Possibility of compensation of losses incurred in 2020 with income generated in 2019 (when total revenue in 2020 is at least 50% lower than in 2019), up to the amount of PLN 5 million loss.
- Refraining from applying the provisions on so-called bad debts relief to the debtor of the PIT and CIT prepayments (when revenues are lower by at least 50%).
- Enabling income deduction on donations made to counteract COVID-19. In addition, a new VAT rate was assigned for 0% donations of laptops and tablets made for schools, humanitarian organizations.
Regarding Social Security (ZUS), similar global support initiatives have been implemented with a focus on SMEs:
- State financing of social security contributions for three months for micro-companies that employ up to forty-nine employees, if they were declared as taxpayers before February 29, 2020; or for self-employed workers, if they were active before April 1, 2020 if their income decreased by at least 50%. Companies with up to 9 employees can count on 100% support, and those that hire between 10 and 49 employees will enjoy a 50% discount on the total amount of unpaid contributions. In addition, this financing will not increase the tax base under the corporation tax law.
- Temporary elimination of the extension fee social security (ZUS) claims: entrepreneurs who have difficulties in paying social security contributions due for the period from January 2020, in the event of concluding an agreement to postpone the payment of contributions or an agreement on the payment of instalments, will be exempted from paying extension fee.
At the same time, the necessary changes related to other taxes took place, the impact of which is necessary to continue with economic activity during the period of the pandemic:
- For tax claims – refraining from charging the extension fee for spreading in time or postponing the date of tax payments and tax arrears determined as the state budget income from contributions due for the period from 1 January 2020, based on the application submitted during the period of epidemic threat/epidemic status or within 30 days after its cancellation,
- Exemption from the tax on civil law transactions (PCC) of the loan agreements concluded before 31 August 2020.
- Real estate tax – enabling municipality:
- Implementing of a real estate tax exemption (for part of 2020) and extension of the deadlines for payment of real estate tax instalments, payable in April, May and June 2020, no longer than 30 September 2020, for those groups of entrepreneurs whose cash flow has deteriorated.
- Postponement of the retail tax until 1 January 2021.
Given the difficulties of moving or collecting data, the Polish Government was also forced to accept other solutions related to the fulfilment of the reporting obligations, including its preparation, approval, disclosure and sending to the corresponding registry, entity or body, among others:
- Extend the deadline for submitting CIT-8 for all taxpayers until 31 May 2020, except for taxpayers with income exempt from CIT and public-benefit organizations – until 31 July 2020 and defer the obligation imposed on private and public sector entities and non-governmental organizations of financial statements (FS) preparation and FS audits made by audit firms.
- Postponing the obligation to submit information to the Central Register of Beneficial Owners (the act on counteracting money laundering) until 13 July 2020.
- Extension of the deadline for reporting tax arrangements (MDR) – deadlines for reporting national tax schemes from 31 March 2020 do not start, and the ones already started are suspended until 30 June 2020.
- Postpone the deadline for Financial Statement presentations from June 30th to July 31st.
To help companies face this difficult situation and avoid cash flow problems and protect the most affected people, entities and sectors, a set of temporary and specific measures have been established:
- A 90 % reduction of rent for the period when the tenant does not carry out its business activity in a commercial facility with a sales area of over 2000 square meters during an emergency or epidemic unless the contract provides the more favourable solution for the tenant.
- Support of transport companies by the Industrial Development Agency (PFR) in refinancing lease contracts.
- BGK, Polish Development Fund (PFR) and Export Credit Insurance Corporation (KUKE) liquidity funds, including the possibility of obtaining – by medium and large companies – from the PFR capital increase or financing in the form of bonds – with a total value of PLN 6 billion.
- Monthly benefit up to about 2,000 PLN – for self-employed and those employed under performance contracts or specific-task contracts.
- Co-financing of employee remuneration – up to 40% of the average monthly salary – and more flexible working hours – for companies in trouble.
- Protecting consumers from excessive price increases and other unfair trading practices.
The package of measures approved in recent weeks is affecting a wide group of people and sectors. That is why politicians continue to analyse the situation and try to act against the expectations of society and changes in the economic situation. Precisely, on April 28, 2020, a third bill was sent to Parliament with the extension of measures and changes that are already in force. Its acceptance is expected at the end of this week.
The Coronavirus crisis is causing businesses to face huge challenges and, in this context, reliable and up-to-date information is essential. At Auxadi, we are experts in providing accounts, tax compliance and international payroll management to our clients. If you would like us to expand on the above information, please do not hesitate in getting in touch with us.
All information contained in this publication is up to date on 2020. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.