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Polish Order – Taxes in 2022. Lewiatan Confederation and BCC comment

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The Polish Order is controversial. The new regulations, which to a large extent will come into force on January 1, 2022, are the largest ever tax increase for entrepreneurs – assesses the Lewiatan Confederation. In turn, the organization of the Business Center Club warns that landlords and tenants will lose on the Polish Lada.

This week, President Andrzej Duda signed the law on tax changes provided for in the Polish Lada. The Lewiatan Confederation presents a critical position towards the upcoming changes. “From the new year, the conditions for the functioning of companies will deteriorate, the costs of running a business will increase, new obligations related to tax settlement and payment of health insurance contributions will be introduced” – said Przemysław Pruszyński, tax advisor, expert of the Lewiatan Confederation, quoted in the press release.


Polish Order. Tax changes in the heat of entrepreneurs’ criticism

In his opinion, “entrepreneurs face many problems related to the proper fulfillment of tax obligations and the necessity to incur very high costs of preparation for the new settlement rules”.

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According to the Lewiatan Confederation, the coming months will be very difficult for people responsible in companies for proper settlement with the Social Insurance Institution and the tax office. “Many regulations raise serious interpretation doubts, are very complicated and imprecise. A short, 6-week vacatio legis will not allow for proper preparation of systems, procedures and employees” – we read in the organization’s announcement.

“The Polish Order is another example of an act passed at an express pace, without respect and attention to the reservations and demands of entrepreneurs. There are many indications that explaining the Polish Order will take many months, it is possible that the Sejm will soon receive another amendment to tax acts, correcting defective Polish regulations. Order “- entrepreneurs predict. Konfederacja Lewiatan is a Polish business organization that brings together 4,100 companies employing a total of over 1 million people.

Apartments for rent – changes

The Business Center Club organization pointed out that one of the key changes, undoubtedly unequivocally deteriorating the situation of taxpayers, concerns the taxation of landlords. “The freedom to choose the method of settling the activity will be limited and at the same time depriving this group of the right to be included in depreciation costs” – indicated.

“The changes provide for the taxation of rental income, if the contracts are not concluded as part of business activity only in the form of a lump sum on recorded income, i.e. income tax, without the possibility of reducing rental income by, inter alia, the costs of finishing, renovating the premises, and mortgage costs. Although the tax tax is lower (8.5% to PLN 100,000 of income, 12.5% ​​above this amount), however, the basis is significantly higher. Only entrepreneurs will be able to benefit from taxation of income “- explained Wojciech Pławiak, BCC dispute expert tax.

Pławik pointed out that the second amendment also restricts the taxpayer’s existing rights. “The Polish Order will abolish the possibility of including depreciation write-offs of buildings and residential premises as tax deductible costs. Even if we decide to rent as part of business activity, the significant cost item, which has so far made this form of taxation attractive in some configurations, will disappear” – emphasized the representative of BCC .

“The only consolation may be the possibility of applying the current taxation rules until 2022. Throughout the year, landlords still have the opportunity to choose the most advantageous form of taxation and to make depreciation write-offs” – he added.

According to Wojciech Pławiak, “the actual increase in taxes will affect not only landlords, but also the other party to lease agreements”. In his opinion, the changes may result in an increase in rents to compensate for the increased tax burden.

BCC is an organization associating individual employers. It has existed since 1991. According to the information available on her website, club members employ over 400,000 people. employees, the revenues of companies exceed PLN 200 billion, and the headquarters are located in nearly 250 cities.

Polish Order. Tax Acts signed by Andrzej Duda

President Andrzej Duda on Tuesday signed the act on tax changes provided for in the Polish Lada.

It is about the act amending the act on personal income tax, the act on corporate income tax and some other acts. It was recalled that it introduces changes to 26 acts.

The most important changes introduced by the Act include, inter alia, increasing the amount free from personal income tax to PLN 30,000; an increase to PLN 120,000 of the amount beyond which the 32 percent personal income tax rate will apply.

The changes, with some exceptions, are to enter into force on January 1, 2022.

Main photo source: Shutterstock

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