Retail sales tax revenues will be over PLN 1 billion higher than originally assumed by the government. Such information was included in the justification to the draft act amending the budget act for 2021.
The Council of Ministers on Tuesday adopted a draft act amending the budget act for 2021 along with a resolution on the draft act amending the budget act for 2021. The reason for the changes in this year’s budget – as Prime Minister Mateusz Morawiecki pointed out – is significantly higher than originally planned and may as much as PLN 80 billion. The project was submitted to the Sejm.
The explanatory memorandum to the regulations indicates that the revenues from, inter alia, from retail sales tax, also known as trade tax.
Trade tax – receipts
The budget act for 2021 assumed that revenues from the retail sales tax would amount to PLN 1.458 billion this year, while the amendment to the act assumed a sharp increase in revenues to PLN 2.525 billion. This means that the revenues from the new tax will ultimately amount to over PLN 1 billion more than originally assumed by the government.
“During the first seven months of 2021, over 93% of retail sales tax revenues planned in the Budget Act for 2021 were realized. Therefore, it was necessary to increase the forecast of the implementation of these revenues at the end of this year to the level of 2,525,000 PLN thousand, i.e. more by PLN 1,066,987 thousand (73.2 percent) compared to the Budget Act for 2021 “- it was written. It was reminded that in 2020 no revenues from this tribute were recorded.
The trade tax has been collected since January 2021. In accordance with the regulations, the subject of taxation is revenue from retail sales. The tax-free amount is PLN 17 million per month. The tax base is the surplus of revenues from retail sales over the free amount achieved in a given month.
There are two tax rates. The first is 0.8 percent. and includes monthly income above the free amount, but not exceeding PLN 187 million. However, the rate of 1.4 percent. the surplus of income over PLN 187 million is taxed.
Trade tax – CJEU judgment
The so-called trade tax law originally entered into force in early September 2016. After several days of the levy being in force, the European Commission initiated proceedings in his case and called on Poland to suspend its application.
In Brussels’ opinion, the construction of the tax could favor smaller shops, which could be considered state aid. After this decision, the Ministry of Finance suspended collection of the tax on retail trade. The suspension, extended several times, was in force until the end of 2020.
In mid-May 2019 Poland won the case against the European Commission in the EU Court regarding the tax on retail sales. According to the court, “the European Commission made a mistake” in recognizing this tax as illegal state aid. The judgment was not final, an appeal was against it and the Commission appealed it.
The Court of Justice of the EU ruled On March 16 this year, that the Polish tax on retail sales does not violate EU law in the field of state aid. Thus, the Court dismissed the appeal of the European Commission in this case and upheld the previous judgment of the EU General Court.
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