important tax changes that will impact polish companies in 2017 | ebook
TRANSCRIPT
Important tax changes that will
impact Polish companies in 2017
2 | Important tax changes that will impact Polish companies in 2017
INTRODUCTION
We are happy to present a brief summary of
the most important changes in the Polish tax
law that will come into force on January 1st,
2017. Should you wish to discuss any of the
below in detail and analyze their impact on
your business, please do not hesitate to
contact us.
3 | Important tax changes that will impact Polish companies in 2017
CONTENT
VAT regulations ............................................................................................................................................................................................................... 4
Liquidation of quarterly settlements in VAT .................................................................................................................................................................. 4
VAT returns filed electronically...................................................................................................................................................................................... 4
EC-sales lists ................................................................................................................................................................................................................ 4
Introduction of VAT penalties ........................................................................................................................................................................................ 5
CIT regulations ................................................................................................................................................................................................................ 6
Introduction of 15% corporate income tax rate ............................................................................................................................................................. 6
New limit for cash payments ......................................................................................................................................................................................... 6
Taxes on consumption ................................................................................................................................................................................................... 7
Standard Audit File for Tax (JPK) ................................................................................................................................................................................. 7
Transfer Pricing rules ..................................................................................................................................................................................................... 8
Increase of capital relations threshold .......................................................................................................................................................................... 8
New quantitative thresholds .......................................................................................................................................................................................... 8
Introduction of new elements to the transfer pricing documentation ............................................................................................................................ 9
4 | Important tax changes that will impact Polish companies in 2017
VAT REGULATIONS
Liquidation of quarterly settlements in VAT
Starting January 1st, 2017, only so called small taxpayers and taxpayers
commencing their activity as active VAT taxpayers in their first 12 months of
activity will be entitled to report and settle VAT on quarterly basis.
VAT returns filed electronically
Starting January 1st, 2017, obligation to file VAT returns electronically will
cover the following taxpayers:
registered as VAT EU taxpayers, delivering goods or providing services where the purchaser is recognized as a taxpayer (under reverse-charge), obliged to file returns, information and annual calculation for income tax purposes electronically.
EC-sales lists
Starting January 1st, 2017, all taxpayers will be obliged to file EC-sales lists electronically on monthly basis (quarterly EC-sales lists will be
liquidated).
5 | Important tax changes that will impact Polish companies in 2017
Introduction of VAT penalties
Additional penalties will be introduced for reporting incorrect VAT amounts. In case the incorrect submission will result in one of the following:
understated VAT obligation, or
overstated input VAT subject to refund, or
overstated VAT to be transferred to next reporting period, or
did not file the required VAT return and did not pay the VAT due to the tax office
the tax authorities will calculate the correct VAT amount and impose an additional VAT sanction corresponding to 30% of the understated tax
obligation/overstated input VAT to be refunded. If after or during the tax control the taxpayer files the correcting VAT return/the missing VAT return
and pays the VAT due, then the sanction will be reduced to 20%.
This sanction will not apply if the correcting/missing VAT return was filed and tax was paid before the tax proceedings were launched.
Where the underreported output VAT or overstated input VAT result from the taxpayer’s involvement in tax frauds (fictional transactions, empty
invoices, etc.) the sanction rate will be 100%.
6 | Important tax changes that will impact Polish companies in 2017
CIT REGULATIONS
Introduction of 15% corporate income tax rate
Starting January 1st 2017, a 15% CIT rate will apply to:
„small entrepreneurs“ (whose value of sales revenue, including
VAT, had not exceeded the equivalent of EUR 1.2 million in the
previous tax year);
taxpayers starting economic activity, during their first tax year.
New limit for cash payments
The limit for payments between companies (entrepreneurs) allowed in cash will be reduced from EUR 15,000 to PLN 15,000. However, this new
limit applies to the transaction value irrespective of the single payment amount. Thus in practice, in case the transaction value exceeds PLN 15,000
each payment should be made through a bank account even if a single payment is less than PLN 15,000. Cash settlements beyond this limit will be
excluded from tax deductible costs.
7 | Important tax changes that will impact Polish companies in 2017
TAXES ON CONSUMPTION
Standard Audit File for Tax (JPK)
Starting January 1st, 2017 the obligation to submit monthly JPK_VAT file
(the Standard Audit File covering purchase and sale register for VAT)
covers small and medium entrepreneurs.
An entrepreneur shall be recognized as medium-sized in the case
where at least in one of the last two financial years:
1. employed less than 250 employees (average per year) and
2. achieved the annual net turnover from sale of goods, products, services
and financial operations that did not exceed the PLN equivalent of EUR
50 million, or where the total value of assets in its balance sheet
prepared at the end of one of these years have not exceeded the PLN equivalent of EUR 43 million.
An entrepreneur shall be recognized as small-sized where at least in one of the last two financial years:
1. employed less than 50 employees (average per year) and
2. achieved an annual net turnover from sale of goods, products, services and financial operations that did not exceed the PLN equivalent of EUR
10 million, or the total value of assets in its balance sheet prepared at the end of one of these years have not exceeded the PLN equivalent of
EUR 10 million.
8 | Important tax changes that will impact Polish companies in 2017
TRANSFER PRICING RULES
On January 1st, 2017 new regulations concerning transfer pricing
documentation will come into force. The most relevant changes concerns:
Increase of capital relations threshold
Current capital relation threshold will be increased from 5% to 25%. In
consequence, transactions between entities having less than 25% of direct
or indirect shares will not be covered by documentation obligation.
New quantitative thresholds
Obligation to prepare the documentation will cover taxpayers whose income
or expenses exceeded the equivalent of EUR 2 million in proceeding year. Beyond this level, the taxpayer will be required to prepare the
documentation for all transactions having significant impact on income or loss.
Pursuant to the new regulations, transactions having significant effect on the amount of income or loss shall cover transactions which total value
exceeds the equivalent of at least EUR 50,000. Moreover, the new regulations determinate the range to which the materially threshold will increase
as the income of the entity increases.
For taxpayers whose revenues amount to over EUR 2 million, but less than EUR 20 million threshold -has been set at EUR 50,000, increased by
EUR 5,000 per each 1 million of revenue above EUR 2 million.
9 | Important tax changes that will impact Polish companies in 2017
For taxpayers whose revenues amount to over EUR 20 million, but less than EUR 100 million -threshold has been set at EUR 140, increased by
EUR 45,000 per each 10 million of revenue above EUR 20 million.
The taxpayers whose revenues amount to over EUR 100 million will be obliged to document transaction which value will exceed EUR 500,000.
It should be emphasized that current threshold of EUR 50,000 applicable to documentation obligation for partnership agreements, join venture
agreements and agreements of similar nature will remain unchanged.
Introduction of new elements to the transfer pricing documentation
A. Local file (the basic version of documentation) will include additionally:
a description of the organizational structure and management structure of the taxpayer,
a description of implemented economic strategy,
a description of the competitive environment,
a description of restructured activities,
documents related to the transaction,
financial data,
justification for the selection for calculation of taxpayers income (loss).
B. Master file – the new component of transfer pricing documentation, that include: information concerning group of related entities, the
description of organizational structure of the group, applicable rules for determining transaction prices, subject and scope of groups activity,
financial situation of the group and description of significant intangible assets held by the group.
C. Country-by-country reporting – also the new component of transfer pricing documentation. The report will contain statements of income,
amount of paid tax and places of economic activity of subsidiaries and foreign establishments belonging to the capital group in given tax year.
Considering the above it should be emphasized that:
taxpayers with income or expenses from EUR 2 million to EUR 10 million, will only have to draw up local file.
taxpayers with income or expenses that exceed EUR 10 million will be additionally obliged to draw up benchmarking study.
taxpayers with income or expenses that exceed EUR 20 million will be additionally obliged to draw up the master file.
10 | Important tax changes that will impact Polish companies in 2017
taxpayers with consolidated revenues that exceed EUR 750 million will be required to prepare (in addition to the local file and the master
file) group report (country-by-country reporting).
It is expected to prepare the transfer pricing documentation not later than on the date of submission of the tax return for given tax year. The
documentation shall be reviewed and updated no less frequently than once a year. As before, the taxpayers will be required to submit complete
documentation within 7 days after the request made by the tax authority.
Disclaimer
Please note that our publications have been prepared for general guidance on the matter and do not represent a customized professional advice. Furthermore,
because the legislation is changing continuously, some of the information may have been modified after the publication has been released. Accace does not
take any responsibility and is not liable for any potential risks or damages caused by taking actions based on the information provided herein.
11 | Important tax changes that will impact Polish companies in 2017
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