legal newsletter - styczeń 2018 · legal newsletter | 2 regulation (eu) 2016/679 of the european...

GIODO Redesigned

Investments on new terms. Assumptions for the bill on principles of supporting new investments

Banking activities performed by an unauthorized entity – valid or not?

Changes to the tourism services industry

Amendments to the law

KPMG

Legal Newsletter

January 2018

http://www.kpmg.com/pl

© 2018 D.Dobkowski sp.k., a Polish limited partnership is a law firm associated with KPMG in Poland.The KPMG name and logo are registered trademarks or trademarks of KPMG International.

LEGAL NEWSLETTER | 2

Regulation (EU) 2016/679 of the European Parliament and of the Council on the protection of natural persons with regard to the processing of personal data (i.e. the general data protection regulation – the so-called GDPR), passed in April 2016, formally has already entered into force, yet it will fully apply from 25 May 2018.

GDPR introduces numerous requirements to be met by the member states, for example, it imposes on them an obligation to establish an independent supervisory authority exercising control over personal data processing and appointed by the parliament, government, head of state or an independent authority entitled to appoint supervisory authority’s members based on laws of a member state.

In Poland, under the currently applicable provisions of law, responsibilities of a supervisory authority (personal data protection authority) are exercised by the Inspector General for the Protection of Personal Data (Polish acronym: GIODO), appointed by the Sejm with the Senat’s consent for the period of four years.

Polish draft legislation implementing the GDPR (hereinafter: the “Draft Legislation”) provides for a change of the supervisory authority’s name, which will continue its operation as the President of the Personal Data Protection Office (hereinafter: the “PDPO President”). The term of office will remain unchanged (4 years), yet the PDPO President will be appointed by the Sejm upon the motion of the President of the Council of Ministers (the Senat will not be involved in the procedure).

In accordance with the GDPR provisions (further detailed in the Draft Legislation), the supervisory authority will be equipped with various competences permitting the performance of its duties. It should be emphasised that certain competences of the PDPO President, provided for in both the GDPR and the Draft Legislation, are entirely new – they have not been provided for in the hitherto binding regulations (Personal Data Protection Act of 29 August 1997, Hereinafter the “PDP Act”).

First of all, indicated should be the PDPO President’s role in certification mechanisms, referred to in the GDPR. Obtaining a formal certificate, granted after completion of the certification process, is to constitute a confirmation that a controller or a processor observed the GDPR provisions. In accordance with the Draft Legislation, it is the PDPO President that is to define the certification criteria, as well as to grant or, if required, cancel certificates.

GIODO Redesigned



Another new competence awarded to the PDPO President and provided for in the GDPR is accreditation of bodies that will monitor the compliance by controllers and processors with the so-called codes of conduct, stipulating principles of personal data protection and drawn up by associations or other entities included in the category of controllers (in particular, individual industries / industry branches). A list of entities accredited by the PDPO President will be published on the Public Information Bulletin webpage, designated for the PDPO President’s announcements.

Moreover, in accordance with the Draft Legislation, the PDPO President will draw up and publish in the Public Information Bulletin recommendations determining technical and organizational measures applied in order to ensure security of the personal data processing. Such recommendations will be of particular importance due to the planned repealing of the hitherto biding Regulation of 29 April 2004 on documenting personal data processing, as well

as the required technical and organizational specifications of IT equipment and system designated for personal data processing. Thus, the PDPO President ‘s recommendations may help controllers and processors to ensure that the applied technical and organizational measures (IT policies, security manuals, etc.) are consistent with the GDPR.

Among new powers of the PDPO President, which are very important from administrators and processors’ perspective, mentioned should be the imposition of high fines for non-compliance with the provisions on the protection of personal data (such authorization is not provided for by the hitherto binding PDP Act). Pursuant to the GDPR, the amount of penalties, depending on the type of violation, may amount to as much as to EUR 20 million or (for entrepreneurs) 4% of the annual turnover. However, the Draft Legislation proposes to limit - to PLN 100,000 - the amount of fines imposable on public entities.

In order to minimize the risk of incurring such high fines, it is advisable for controllers and processors to take steps aimed at adapting their activities, including personal data processing, and the maintained documentation, to the GDPR regulations. All the more so, because there is less and less time to the deadline for full application of the GDPR, and full adjustment of activity to the GDPR requirements may prove to demand much effort.

Magdalena BęzaAttorney-at-Law

E: [email protected]

Author:



Investments on new terms. Assumptions for the bill on principles of supporting new investmentsIn October 2017, public consultations were launched with reference to a bill on principles of supporting new investments, published by the Ministry of Development (the „Bill”).

The Bill provides for a countrywide support to entrepreneurs, thus eliminating hitherto applicable territorial limitations, in accordance wherewith support in the form of an income tax exemption was available only within the set areas of special economic zones (”SEZ”). New mechanisms of support, provided for in the Bill, are designated to supersede the support provided currently under the Special Economic Zones Act1.

Support, in the form of tax exemptions or services rendered by local administrators, is to be available to entrepreneurs that plan to make in Poland new investments encompassing establishment of a new production plant and reinvestments.

New investments – investments in tangible and intangible assets connected with:

• establishment of a new plant,

• increase of production capacity of an existing plant,

• plant production diversification by introducing new products or major change in the production process of an existing plant

The Bill is intended to adjust the principles and the mode of supporting new investments to changing social and economic environment, and to match the supporting mechanism with the Strategy for Responsible Development until 2020 (involving prospects until 2030).

In accordance with assumptions underlying the Bill, support will be provided on the basis of relevant decisions issued by the minister proper for economy, upon request, whose model (including in particular specification of the entrepreneur, the nature and location of the planned investment, and a list of eligible costs) will be specified in the secondary legislation. The support will be available for the lifetime of the decision issued to the entrepreneur. Pursuant to the Bill, support decisions will be issued for a fixed period of not less than 10 and not longer than 15 years (the higher the intensity of public aid permitted by the European Union in the region, the longer the exemption period), however, if on the support decision day the new

investment site is located within the SEZ, the decision will be issued for 15 years

Vital changes:

• total elimination of territorial limitations – the draft legislation will apply to support granted with reference to new investments located within the entire territory of Poland

• determination of the tax exemption period – support decisions issued for fixed periods (from 10 to 15 years)

As transpires from the Bill, a support decision, apart from the period of its validity, will also determine the object of business and the terms and conditions to be met by the entrepreneur. The above-mentioned terms and conditions may in particular refer to:

• employment by the entrepreneur of a certain number of employees in connection with a new investment

• incurring by the entrepreneur eligible costs of investment within a certain time

• deadline of the investment realization, after which the costs of investment incurred by the entrepreneur may not be qualified as eligible costs

• requirements to be met by investors that wish to be provided with support

• maximum amount of capital expenditure that may be taken into account when determining the maximum amount of state aid

• investment location, including registry particulars of the real property.

Support may be granted in relation to a new investment, where eligible costs will be incurred in a certain amount2 and quality criteria to be set by a regulation issued by the Council of Ministers will be met.

Therefore, the above-mentioned regulation, which will determine the qualitative criteria for granting the aid, will be of key importance for entrepreneurs. Unfortunately, at the moment, due to the lack of a draft regulation, unknown are the support-granting criteria. Apart from indicating qualitative and quantitative criteria, taking into account the unemployment rate in the poviat of the new investment location, the regulation will also determine

1 Special Economic Zones Act of 20 October 1994 (Journal of Laws of 2017, item 1010)² A relevant amount will be determined in a regulation issued under the draft legislation.



the types of economic activity, for which no support will be granted, the manner of verification of compliance, conditions for being granted support in the form of tax exemption, maximum allowable amount of public aid, ways of determining the date of validity of a decision on support for a given investment, costs of a new investment eligible for public aid, method of investment costs discounting and the amount of public aid as at the support decision day, as well as the method of determining the amount of public aid allowed in case of conducting business activity on the basis of more than one support decision and the method of organizational separation of activities covered by the support decision and the settlements method applicable in a situation where the entrepreneur’s business activity is not covered with the support decision.

The new regulations also provide for strengthening the role of managing entities that will provide entrepreneurs with free training and advisory services, and will be the

main contact point in the region within the one-stop-shop system and the regional coordinator of granting public aid in the area of the tax exemption and government subsidy. As assumed by the Bill’s originators, managing companies will become centres providing entrepreneurs with knowledge on all aspects of business operations in the region, and will continue to specialize in industries and sectors, in which they have competence advantages. Tasks of a managing company will include activities aimed at encouraging and developing new investments in the area assigned to it, as well as an obligation to draw up an investment development plan.

The Bill also assumes establishment of the Investment Support Record, which is a central register maintained in the ICT system. It is intended to support economic policy and regional policy of the area managing entities, and is to be helpful in obtaining a full picture of entities investing or planning investments in Poland.

As it was indicated in the justification for the Bill, entrepreneurs holding business licenses issued under the Act on Special Economic Zones will operate under the legal regime of this Act until the end of 2026. Entrepreneurs that realize their investments in the SEZ will retain all the rights they acquired.

Since works on the Bill have just started, the currently proposed solutions may change.

Author:

Natalia KotłowskaAttorney-at-Law E: [email protected]



Banking activities performed by an unauthorized entity – valid or not?The Banking Law of 29 August 1997 (hereinafter: „Banking Law”) contains a list of actions that are defined as „banking activities.” As a rule, some of them, may be performed only by banks as a part of their business activity. Other organizational units may perform such activities if the provisions of separate statutory acts authorize them to do so. The above-mentioned activities, generally reserved for banks, include: accepting cash deposits payable on demand or by a fixed deadline and keeping accounts for such deposits, keeping other bank accounts, granting loans, granting and confirming bank guarantees, as well as opening and confirming bills of credit.

According to Article 170 of the Banking Law, the performance of banking activities without a permit does not constitute the basis for charging interest, commission, fees or other remuneration, and the entity that has received interest, commission, fees or other remuneration for the above-mentioned

activities, is required to return them.

The literature on the subject, has pondered upon the question whether, in the light of Article 170 of the Banking Law, banking activities carried out without the required legal permission may or may not be considered valid.

The above issue was addressed in the Resolution of the Supreme Court of 10 March 2017 (III CZP 109/16). The Supreme Court stated that civil law sanctions related to the performance of banking activities by unauthorized entities, i.e., those that have not been granted the required legal permit, are limited to the provision of Article

170 of the Banking Law. This means that the sanction of invalidity may not be attributed to such activities.

The Supreme Court gave the above-mentioned ruling based on the factual situation where two entities concluded the so-called „investment agreement”. Based on its provisions, one party accepted from the other party a cash contribution and committed itself to pay certain cash benefits to a third party.

The account to which the above-mentioned payment was made, was also used for settlements between the parties of the contract. The courts that considered the case stated that it involved a banking activity, referred to in Article 5 (1)(1) of the Banking Law and generally reserved for banks, i.e. acceptance of cash deposits payable on demand or by a fixed deadline and keeping accounts for such contributions (in the above-mentioned case this activity was performed by an unauthorized entity). The Supreme Court shared the opinion issued with reference to the case.

In its analysis of the issue, referred to in this article, the Supreme Court pointed out that the ratio legis of the sanctions specified in Article 170 of the Banking Law may be assigned two meanings.

On the one hand, an absolute prohibition of performance of banking activities by unauthorized entities, which results from the Banking Law, may lead to the conclusion that the legislator’s goal is to eliminate such activities from legal transactions.

Such a statement seems to be even more relevant in view of the fact that in Article 171 of the Banking Law, severe



penal sanctions have been envisaged for conducting, without authorization, the activity of collecting other people’s funds with the aim of granting credit, cash loans or exposing such funds to other risks.

Such actions may be fined up to PLN 10,000,000 and are punishable by up to 5 years’ imprisonment. In this context, the Supreme Court draws attention to the risks that may arise from circulation of money and investing cash by entities that do not meet the standards defined in national and EU regulations.

On the other hand, as the Supreme Court points out, the legislator did not explicitly reserve the sanction of invalidity of banking activities performed in violation of the provisions of the Banking Law, i.e. activities performed by an entity lacking legal authorization. According to the Supreme Court, such a solution could have been introduced intentionally by a (rational) legislator. The lack of sanction of invalidity may result from the fact that such annulment would not necessarily be in the interest of the contractor of the entity which performs banking activities without a permit.

Invalidity of such activities could deprive the contractor of the ability to successfully pursue claims, to which he is entitled on the basis of a validly concluded contract. The Supreme Court indicates that the criminal sanctions provided for in Article 171 of the Banking Law, in conjunction with civil law sanctions referred to in Article170 of the Banking Law, come as sufficiently severe and onerous. They should effectively prevent the performance of banking activities by entities lacking a proper permit.

Having considered the above-mentioned arguments, the Supreme Court arrived at the conclusion that contracts covering unauthorized entities’ performance of banking activities within the meaning of Banking Law are valid. Such a standpoint has been confirmed earlier in the theory of law (most of its representatives are putting forward arguments that are consistent with those formulated by the Supreme Court in the above-mentioned resolution), and previously issued decisions of the Supreme Court (resolution of 20 February 1997, III ZP 5/97).

Ph.D. Anna Jóźwicka

Attorney-at-Law

E: [email protected]

Author:



Changes in the tourism services industryOn 24 November 2017, the Parliament passed the Act on package travel and linked travel arrangements (hereinafter: the „Act”), which on 1 July 2018 will introduce major changes in the scope of offering and selling tourist services. The Act implements Directive (EU) 2015/2302 of the European Parliament and of the Council of 25 November 2015 on package travel and linked travel arrangements to the Polish legal system. The new regulations constitute a response to dynamic changes taking place within the tourism industry (including the use of Internet offers), as well as to customization of package travel and combining various tourist services. The changes are aimed first of all at the improvement of solutions in the area of travel insurance against the effects of insolvency of tourism organisers and intermediaries.

Since many aspects of the matter regulated by the transposed Directive are new to Polish law (e.g. linked travel arrangements or facilitation of their purchase), it was impossible to introduce these new legal institutions to the previously binding Act on tourist services. Hence, a completely new Act was passed, and the current Act on Tourist Services, after the change of the name, will regulate only hotel services and tour guide services.

The above-mentioned Directive stipulates an obligation of maximum harmonisation of the regulations. Thus, it prevents an unrestricted formulation of Polish regulations, since its aim is to create coherent and uniform legal solutions for all entities operating within the tourism services industry in the EU Member States. The Act, apart from introducing new concepts, such as „linked travel arrangements”, „retailer” or „lack of conformity”, has also defined new groups of entities that will be covered by new regulations, i.e. „travel traders” and „traders facilitating the purchase of linked travel arrangements”.

Within the meaning of the Act, the linked travel arrangements constitute a combination of at least two different types of tourist services (passenger transport or accommodation for the purposes other than residential or vehicle rental, or other services provided to travellers) purchased in connection with the same trip or holiday, covered by various contracts/agreements with suppliers but not constituting a travel package. As for the travel package, it is a combination of at least two different types of tourist services in connection with the same trip or holiday, that meet the requirements specified in the Act.

The Act improved functionality of the financial security system in the event of insolvency

of a tourism organizer or a trader facilitating the purchase of linked travel arrangements.

These entities are required to meet a number of conditions, in particular to ensure that in the event of their insolvency the travellers: (i) have the costs of the package continuation or the costs of repatriation covered, if, contrary to said entities’ obligation, they do not ensure such continuation or repatriation, (ii) are refunded all payments for a package or service where, due to the fault of a tour operator or a trader facilitating the purchase of linked travel arrangements, the package or any paid service has not been or will not be rendered.

The aforementioned obligations are implemented by concluding by a tour operator or a trader facilitating the



purchase of linked travel arrangements a bank or insurance guarantee or an insurance contract, or a contract for a travel fiduciary account, as well as making contributions to the Tourism Guarantee Fund.

The Act clarified the rules of its operation of the travel fiduciary account, as hitherto only general regulations have existed.

The scope of information obligation imposed on tour operators, traders facilitating the purchase of linked travel arrangements and tourist agents vis a vis travellers have also been significantly extended. Following the regulations protecting consumers within the financial sector (with reference to consumer credits or mortgage loans), standard information forms, which the abovementioned entities are required to provide clients with, have been introduced also in this industry.

Pursuant to the provisions of the Directive, the Act contains a detailed regulation regarding the package travel contract (it stipulates in detail the provisions that should be included therein, and indicates what information received prior to the contract conclusion should constitute its integral part), as well as documents and information that the traveller must receive before the start of a travel package. In addition, tour operators and travel agents were required to make a copy of the contract or confirmation of its conclusion immediately available to travellers on a durable data storage medium.

The Act excludes from the scope of its application the so-called “one-day trips”, which last less than 24 hours (unless they include an overnight stay). The regulations will also not apply to packages that are offered, ordered and performed occasionally and on a non-profit basis, and only for a limited group of travellers, as well as to business trips.

The legislator estimates that the number of entrepreneurs to whom the new regulations will apply, will grow by more than 1,500 as compared with the number of entities covered by the hitherto binding tourism act, as they will cover additional entities that offer clients the so-called “dynamic packages” (individual travel packages consisting of various services purchased from different entities).

Author:Renata KulpaAttorney-at-Law E: [email protected]



Amendments to the law

The Act on Transparency in Public Life

The Government Legislation Center is in the process of evaluation of the Bill on Transparency in Public Life. The Bill constitutes an attempt to include in one act the principles of transparency in public life previously dispersed in various acts. The new regulation is to supersede, among others, the Public Information Access Act. The major principle underlying the Bill is every person’s right to request public information without obligation of proving any legal or factual interest in it. The right to obtain public information will cover not only public information (including processed information), but also access to official documents and participation in meetings of collective public authorities elected in general elections. The Bill introduces to the Polish legal system, among others, an institution of a whistleblower, i.e. a person who reports to judicial authorities criminal offences committed by an employer or other entity, with which such a person is linked by a contractual relationship, thus exposing himself to negative professional and material consequences. The Bill also provides for an extension of the list of persons required to provide their personal property declarations. This obligation will apply to, among others, CEOs, members of management and supervisory boards of companies, where the State Treasury or local governments hold more than 10% of shares, persons participating in the public procurement awarding process and privatization processes. Moreover, public sector entities as well as medium and large enterprises will be required to establish and follow internal anti-corruption procedures, so-called, “anti-corruption codes.” The Bill envisages also an increase of transparency of public procurements.

VAT and the split payment – new regulations

On 10 November 2017, the Senat was provided with a bill on amendment to the Act on the Tax on Goods and Services and to Some Other Acts, which introduces the mechanism

of the so-called “split payment of VAT” into the Act on the Tax on Goods and Services. The amendment assumes that in case of transactions between entrepreneurs (B2B) the payment for the purchased goods or services would be made to two accounts: one would be credited with the net amount, whereas the VAT account – with the amount of the payable tax. Implementation of this solution is to ensure constant revenues from VAT and prevent VAT evasion. The mechanism provided for in the Bill is to counteract tax abuse and fraud, including transferring capital abroad. The split payment mechanism will enter into force on 1 April 2018.

Publication of largest companies’ fiscal data

On 24 November 2017, the third reading of the government bill on amendment to the Corporate Income Tax Act took place. According to the amendment, basic fiscal data of the largest companies - CIT payers - will be published in the Public Information Bulletin. The Bill relates to taxpayers, whose income generated in a tax year exceeded an equivalent of EUR 50 million.

As transpires from the justification for the Bill, affected by the change will be approximately 2,000 companies. The proposed amendment will also apply to tax capital groups (regardless of the amount of revenues generated) - the government estimates that there are approximately 60 such groups. The draft will soon be transferred to the Senate.

Abolition of a limit for the basis of assessment of pension premiums

From 1 January 2018, pension and disability insurance premiums will be deducted without any limits. At present, the annual basis for calculating pension contributions in a given calendar year cannot be higher than the amount corresponding to thirty times the envisaged average



remuneration in the national economy for that calendar year.

On 24 November 2017, the third reading of the draft amendment to the Act on Social Insurance Scheme and Some Other Acts took place. The Act will be sent to the Senat shortly.

Sunday trading ban

The Sunday Trading Limiting Act is expected to come into force on 1 March 2018. According to the bill, from 1 March 2018, the ban will not cover two Sundays (the first and the last); in 2019 - one, last, Sunday of the month, whereas from 2020 the ban on trade will apply on all Sundays (with certain exceptions).

On 24 November 2017, the third reading of the bill took place, while in 29 November it was transferred to the Senat.

Taxes

On 27 November 2017, the Act amending the Personal Income Tax Act, the Corporate Income Tax Act and the Act on Flat-Rate Income Tax on Selected Incomes Earned by Individuals (Dz.U.2017.2175.) was published in the Journal of Laws. The amendment will come into force on 1 January 2018 and introduce significant changes, including, among others:

1. Tax-free amount increased from PLN 6,600 to PLN 8,000.

2. Introduction of the so called “shopping centres tax” – a minimum income tax for the owners of commercial properties with a value exceeding PLN 10 million. The tax will be calculated in respect of the tax base that constitutes income determined on the basis of the value of a real estate which stems from the tax record kept by a taxpayer. In respect of the so calculated tax base, a monthly tax of 0.035% will be charged.

3. Counteracting tax optimisation - several regulations have been introduced so as to „tighten” the corporate income tax system by preventing transfer of profit to other countries with the aim of being covered with a more advantageous tax regime.

4. Elimination of double registration of reserves and provisions in banks - reduction of the obligations related to documentation. It aims at adjusting the provisions of the Tax Act to the evolving accounting standards. Under new regulations, banks which apply IAS will not be required to conduct double bookkeeping (for accounting and fiscal purposes).

5. Increase, from PLN 3,500 to PLN 10,000, of the value limit of tangible or intangible assets, which allows calculating, on a one-off basis, expenses for the purchase of the above-mentioned assets towards tax-deductible expenses.

6. Adjustment of PIT and CIT Acts to the new classification of fixed assets. The adjustment is aimed at assigning new symbols and names of groups provided in 2016 fixed assets’ classification - without a substantive amendment of tax regulations. The above will enable taxpayers the correct application of annual depreciation rates.

Maria Pazio-WitkowskaLawyer E: [email protected]

Author:

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legal newsletter - styczeń 2018 · legal newsletter | 2 regulation (eu) 2016/679 of the european...

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