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Sunday, May 26, 2024

The Sejm adopted the amendment to the VAT Act

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On Friday, the Sejm passed an amendment to the VAT Act, which changes a number of tax regulations. It includes, among others, provisions relating to the Act on Inheritance and Gift Tax. The amendment eliminates the so-called waste tax.

278 deputies voted for the adoption of the amendment to the act on tax on goods and services and some other acts, no one was against it, and 170 abstained from voting. The bill will now go to the Senate for consideration.

The financial liquidity of companies is to be improved

The core of the amendment to the VAT Act are solutions that will simplify and speed up settlement VAT (the so-called Slim VAT package 3 – Simple Local and Modern VAT). The financial liquidity of companies is also to be improved. It will be possible e.g. by increasing the sales limit of a small taxpayer from EUR 1.2 million to EUR 2 million. The new regulations will also reduce formalities for companies in international trade. Thanks to the proposed solutions, running a business – from the point of view of VAT settlement – is to be easier and less time-consuming. During the parliamentary work on the amendment, a number of provisions amending other tax regulations were added to it – concerning the flat-rate tax, personal income tax and inheritance tax and donations. The change in the flat-rate tax on registered income covers the issue of taxation of rental income. According to the current regulations, people earning income from rental pay tax at the rate of 8.5%. from revenues not exceeding 100,000 zloty; above this limit, the rate increases to 12.5 percent. When spouses earn rental income, the limit is PLN 100,000. PLN covers both of them. The amendment equates the situation of married couples with other taxpayers. This means that each spouse will have their own limit of 100,000. zloty. The amendment regarding changes in the personal income tax extends the group of people who can benefit from the rehabilitation relief to include grandparents. Currently, there are no grandparents among people from the immediate family who take care of a disabled person and at the same time can take advantage of the relief.

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Total income limit for parents of a disabled child

Another change concerns the limit of the total income of the parents of a disabled child, below which they can benefit child allowance. Currently, parents of one child cannot use the child relief if their total income exceeds PLN 112,000. zloty. The amendment means that parents of a disabled child will be able to use the allowance for a child without a limit. The amendment also changes the provisions on capital gains tax. It’s about, among others about the issue of settlement of income from investments in fund units. A representative of the Ministry of Finance, during the work on the bill in the Sejm, explained that currently a flat-rate tax is levied on income from investment funds, which means that income from this source cannot be offset against losses, e.g. from shares. After the amendment of the regulations, the income from the funds will be able to be offset against losses with income from other capital income. The rules for settling income from bonds purchased on the secondary market will also change. As the Ministry of Finance explained, the point is not to pay tax on an amount greater than the real profit, which may occur in certain situations. Pursuant to the amendment, the changes regarding PIT and the rental lump sum are to come into force from January 1, 2024. The amendment to the regulations will also allow for submitting tax returns via the Twoj e-PIT service by persons conducting business activity. In addition, the changes also apply to the obligation to submit uniform control files by business people and companies. First of all, the deadline for the introduction of the obligation to send JPK with data from income taxes has been changed – so in the case of JPK CIT, the obligation will come into force from December 31, 2025, and in the case of JPK PIT – from December 31, 2026. In addition, the regulations specify that uniform files control reports are to be sent after the end of the tax year, not the month or quarter.

Inheritance and gift tax

The amendment also includes provisions relating to the act on inheritance and donation tax. The thresholds for the purchase from a single seller will be increased, after which this tax is paid. The point is to raise the threshold to PLN 36,120 in the first tax group, to PLN 27,090 in the second tax group and to PLN 5,733 in the third tax group.

Thus, the amendment eliminates the so-called the tax on throw-ins, which appeared in the deregulation act. It introduced limits for donations received from many people, which leads to taxation of, among others, charity drops. At the beginning of February Prime Minister Mateusz Morawiecki declared that he would not allow this to “in any way affect the issues of collecting funds for charity and initiatives of this type”. He informed that he had instructed the Ministry of Finance to clarify these issues immediately. Appropriate changes were proposed during the work on the draft amendment on Slim VAT 3 in the Sejm. During the work on the Act, an amendment to the Inheritance and Gift Tax Act was also adopted, changing the period for which the value of donations is calculated. Under the current regulations, the period for which the funds obtained as a donation from one donor are counted is 5 years preceding the year in which the purchase took place. The amendment introduced the principle that the value of funds is calculated in the year in which the funds were acquired as a donation, and for the period of 5 years before that year. The amendment assumes that the entrepreneur will be able to keep sales records more easily using cash registers. It’s about, among others o the possibility of opting out of the obligation to print fiscal documents. Formalities in international trade are to be reduced. There will no longer be formal requirement to have an invoice for the intra-Community acquisition of goods when deducting input tax on this account. The new regulations also liberalize the conditions for faster VAT refunds for the so-called non-cash taxpayers. The rules for applying the conversion rate for correcting invoices where the invoice was issued in a foreign currency have been clarified. It is planned to extend the possibility of allocating the funds accumulated on the VAT account to other taxes and fees, e.g. for retail sales tax. The Act also introduces a system for measuring VAT sanctions, requiring the economic situation of the taxpayer to be taken into account. This means that when determining VAT sanctions, the tax authorities will take into account the specific circumstances of a given case, and the sanctions will be individualized. During the work on the act, the date of its entry into force was also changed from April 1, 2023 to July 1, 2023.

Read also: A new type of leave, changes in employment contracts

Main photo source: Shutterstock



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