Joanna Prokurat: articles by this author

Selected anticipated changes in income taxes as of 2019

At the end of August 2018, the Ministry of Finance announced future significant changes in the most important tax acts. These changes are to enter into force at the beginning of 2019. We wrote about some of these here last week. Now we present further changes proposed by the Ministry of Finance, as published in the draft act of 24 August 2018 amending the Personal Income Tax Act, the Corporate Income Tax Act, the Tax Ordinance and other acts, which might be particularly important for taxpayers conducting business activity.

The split payment mechanism

Regulations introducing the split payment mechanism for VAT entered into force in Poland on 1 July 2018. This mechanism in B2B transactions is designed as a weapon in the fight against VAT fraud.

Split payment and the legal situation of financing banks

The split payment mechanism for business-to-business transactions entered into force on 1 July 2018. Introduction of this mechanism was motivated by the aim of closing gaps in the tax system. But split payment affects not only the situation of VAT payers, but also banks.

Elimination of income tax exemption for closed-end investment funds

On the last day of October a notice was published on the Sejm website on filing of a parliamentarian’s bill to amend the Personal Income Tax Act and the Corporate Income Tax Act. The changes to the CIT Act, to enter into force on 1 January 2017, would eliminate the exemption from corporate income tax for closed-end investment funds (FIZ). This exemption has been used as a major instrument for tax optimisation, for example for entities involved in trading of debt and real property, and for taxpayers seeking protection against rules governing controlled foreign corporations (CFC).

Battle over social insurance burdens

High social insurance premiums in Poland motivate remitters and insureds to seek business models allowing them to reduce their contributions. But the Social Insurance Institution—with the support of lawmakers—is closing more loopholes.

Tax support for commercialisation of knowledge

The Act of 29 August 2014 Amending the Corporate Income Tax Act, the Personal Income Tax Act and Certain Other Acts went into force on 1 January 2015.