Alicja, Autor w serwisie Eland Tax Advisory

Amendment to VAT regulations from 1 January 2027 – adopted

On 4 September this year, the Sejm passed the so-called major VAT amendment (which is the result of a government project). The act is currently awaiting the President’s signature and publication in the Journal of Laws. We hope that it will not be subject to a veto; below we present a few key changes. As a rule, the provisions of the amendment come into force on 1 January 2027, with some exceptions, but it is worth analysing them all and assessing whether and how they affect your business activity. Key changes To do: Update the list of liabilities that will be settled using the MPP. The list should include: Practical note: A good change, it enables to move away from the practice of archiving the results of regularly performed checks of the status of the contractor(s) for VAT purposes. Practical note: If you are a supplier of goods listed in Appendix No. 15 (for example: car parts): Practical note: Enter a separate record of transactions constituting the import of taxable and VAT exempt services and exclude the latter type of services from recognition in the VAT return. Practical note: The change is beneficial, but for a limited scope of entities. The VAT warehouse procedure will allow to improve cash flow and simplify VAT settlements, but only in the trade of a very limited range of goods. Attention! At the stage of government or parliamentary work, there are several other draft amendments to the VAT Act (e.g. the draft abolishing the obligation to submit VAT-EU summary information, change of legal definition of export of goods and the catalogue of documentation required to prove export of goods). Therefore, the list of changes in the scope of VAT is not yet closed. Summary, what we offer? If you want to know more details – we can help you with that. Authors: Agnieszka Czarnecka / Katarzyna Jaromińska 1 Amendments to Article 105a of the Value Added Tax Act 2 Amendment of Article 96b(2) of the Value Added Tax Act 3 Addition of paragraph 1k to Article 17 of the Value Added Tax Act 4 New Chapter 11 in Section XII of the Value Added Tax Act, including Article 138k – Article 138za

Liberalization of MDR regulations in the future, the need to check the current performance of MDR obligations

We would like to inform you that on 19 June 2026, the President signed an amendment to the Tax Ordinance Act, which introduces (among others) long-awaited and significant changes to the regulations on reporting tax schemes (MDR). Currently, the amendment is awaiting publication in the Journal of Laws [edit: amendment published in Dz.U.2026.846 as of 2026.06.25]. The key provisions of the Act will enter into force on 1 October 2026, m.in those relating to tax schemes. At the same time, transitional provisions are provided for – if the deadline for the execution of the obligation related to the MDR falls on 30 October 2026, the existing regulations, i.e. the more restrictive ones, should be applicable. Below, in points 1 and 2, we present the scope of the most important changes in the regulations concerning the MDR and the Fiscal Penal Code (FPC), and in point 3 the actions we recommend. It is not worth assessing the needs and obligations individually and then adjusting them to the specifics of a particular taxpayer. The most important changes in the scope of MDR regulations Key changes include, among others: Changes to the Fiscal Penal Code (FPC) in connection with the MDR The previous provisions of the FPC provided for liability for failure to submit or untimely submission of MDR information (with the exception of MDR-3). From 1 October 2026, the sanctions will cover all types of MDR information while maintaining the current level of threat. The highest fine, i.e. up to 720 daily rates, may be imposed for the indicated violations (currently the maximum fine is over PLN 46 million, in practice the penalties imposed are lower, but still very severe). Please note that criminal liability resulting from the FPC may apply to both: Recommended actions to take in the near future ********* If you have any questions or doubts regarding the application of the current MDR regulations or the obligations arising from the new regulations, please contact us. We will be happy to help you analyze your situation and determine the right course of action. Authors: Agnieszka Czarnecka / Klara Pytel

Extensive duration of proceedings conducted by tax authorities – part 2

In the previous article (part 1 of the thread) we described the problems faced by taxpayers applying for individual tax rulings – prolonging the proceedings by subsequent calls to supplement the application, attempts to leave the application unexamined. Unfortunately, these practices are also used in other types of proceedings conducted by tax authorities. In which cases do they occur most often, what do they consist of and how can they make life difficult for taxpayers? And most importantly – how to counteract them? Recently, we have mentioned that our experience shows that protractedness applies in particular to proceedings in the following cases: In this article, we will deal with proceedings in which taxpayers or remitters apply for a refund of overpaid tax (i.e. overpaid (unduly paid) tax receivables). We expect the thread to continue in the future… Delays / extensive duration in tax refund or overpayment proceedings Let’s analyze the topic on the example of proceedings initiated at the request of a taxpayer or remitter for a refund of withholding tax (i.e. WHT, including one paid under the Pay&Refund mechanism) or overpayment in WHT, also in respect of interest for late payment paid with tax, which was finally refunded by the office. This is a very important topic, especially since it often concerns very material amounts. Therefore, any delays in the recovery of overpaid receivables may be very severe for taxpayers (or remitters). Unfortunately, even in such cases, there are proceedings in which the authorities seem to be looking (sometimes forcibly) ways to avoid issuing a decision granting the applicant a tax refund or overpayment. To this end, among others: The above situations may apply in particular to those proceedings the subject of which are more complex cases or legal issues in which an unambiguous line of case law has not yet been formed. The authorities then look for new ways to discourage the applicant from further struggle under the guise of a thorough investigation of the case or to postpone the moment when they will have to issue a substantive decision. Summary Practice shows that the actions of tax authorities can often surprise. And although you can come across an official who will approach the matter and substantive analysis in a friendly and “humane” way (because we are lucky enough to know such cases), unfortunately there is also a considerable risk that – especially in more complicated cases – you will have to face a completely different approach. That is why the following are so important: Our advisors have extensive experience in all of the above areas. Therefore, if you are planning to file an application initiating an overpayment procedure or you are in the process of such proceedings and you are facing further summonses, protracted proceedings or attempts to reject the application by the tax authorities – we can help. Authors: Katarzyna Jaromińska / Agnieszka Czarnecka

Liquidation of fixed assets and the obligation to correct input VAT

In the course of running a business, entrepreneurs often face the need to liquidate fixed assets (including investments in fixed assets of third party) or intangible assets (further: ITA). If an entrepreneur has deducted input VAT when purchasing or producing such fixed assets or intangible assets, liquidation may mean that the entrepreneur has to adjust the VAT deduction made. When and on what terms should such a correction be carried out according to the tax authorities, and when is it not required? According to the Value Added Tax Act, the correction of input VAT may be necessary, m.in. in connection with a change in the use of a fixed asset or ITA – according to Article 91(7) of this Act, the provisions on the adjustment of VAT deduction “shall apply accordingly in the event that the taxpayer had the right to reduce the amounts of tax due by the entire amount of input tax on the goods or services used by him and made such a reduction, or did not have such a right, and then the right to reduce the amount of tax due by the amount of input tax on that good or service changed”. What can be considered a change of purpose? An obvious example would be the purchase of a fixed asset or ITA with the intention of using it for VAT-taxable activities (e.g. the provision of leasing services) and deducting the input VAT on such purchase, and then transferring this fixed asset or ITA for use in activities exempt from VAT (e.g. for the provision of financial services, maintaining bank deposits for natural persons). In such a case, it may be necessary to adjust the previously deducted input VAT (if such a change of purpose takes place during the so-called “VAT correction period”, which is discussed in more detail at the end of the article). But what about the liquidation of a fixed asset or ITA in a situation where the taxpayer does not change the profile of its business activity and it remains fully taxable / subject to VAT (at reduced or standard VAT rates)? Does such an event also constitute a “change of purpose”, or can it be considered that the liquidation is related to the taxable activity and, as a result, does not change the taxpayer’s right to deduct input VAT on the acquisition or production of such an asset? How should the concept of liquidation be understood under the provisions of the Value Added Tax Act? Physical liquidation of a fixed asset or an intangible asset (ITA) The practice of tax authorities and the jurisprudence of administrative courts show that liquidation is primarily the physical removal, dismantling of individual elements or the entire fixed asset (or ITA) due to the loss of efficiency and usefulness for the taxpayer. On the other hand, in order to assess whether such liquidation constitutes a change of purpose (from taxable to non-taxable activity), it is necessary to take into account the reason for such liquidation, i.e.: The assessment of business needs and reasons for liquidation is quite subjective, so it is crucial to analyze each case individually and collect appropriate documentation by the taxpayer. … but is it just physical liquidation? It is worth remembering that in the case of movable fixed assets or ITA, the concept of liquidation does not always have to be associated with the physical dematerialization of the asset. The practice of tax authorities and court case law confirm that the reason for the liquidation of a fixed asset/ITA (stated, for example, in the form of a liquidation protocol) may also be m.in.: Also in such cases, it is reasonable to assume that there is no change in the purpose of the fixed asset or the intangible asset and the taxpayer is not obliged to make an adjustment in terms of input VAT deduction. But BEWARE! This does not apply to cases where the taxpayer can be attributed fault for the loss or loss resulting from a failure to exercise due diligence (in such a situation, the lack of correction may be considered an abuse of the right to deduct VAT). Therefore, also in this respect, it will be important whether and how the taxpayer is able to document and demonstrate that due diligence has been observed by him. What about leaving improvements / outlays, i.e. investments in a fixed asset of third party? An exception to the general rule? In practice, it often happens that, for example, when renting premises to conduct business (headquarters, shop, warehouse, etc.), the taxpayer makes improvements / outlays on the premises in order to adapt it to their needs, brand image, or the guidelines of the capital group. Such improvements / outlays are essentially for the lessee an investment in a fixed asset of the third party, entered into the fixed assets register and depreciated for tax purposes. The problem arises when leaving such a premises, e.g. due to the unprofitability of continuing to operate in a given location. In such a situation, the taxpayer has three options: Our experience shows that the last case of investments in foreign fixed assets (described in letter c) is relatively common and concerns the material values of the expenditures (outlays) left. At the same time, in our opinion, the negative positions of the tax authorities and courts are unjustified and ignore the most fundamental rules of VAT. As a result, they are an issue that may be a source of dispute with the authorities and in which we can assist you. Summary – what do we offer? An equally interesting and debatable topic, although not described above, is the liquidation of unfinished investments and determining the tax consequences of such a decision from the perspectives of CIT and VAT. We encourage you to take advantage of our experience in this area. VAT correction period Notwithstanding the above, it should be remembered that the mere change of purpose of a fixed asset or intangible assets will not always

Advance payment in VAT and CIT settlements– the moment of showing payment towards future benefits (transactions)

In accordance with tax laws, an advance payment received for services or supplies of goods carried out in the future does not constitute revenue for CIT purposes, but determines the moment when the VAT liability arises. Payment towards future benefits (transactions) – when the tax obligation arises in CIT and VAT The rules seem simple, but only in theory. In practice, not every payment made before the performance of the service constitutes an advance payment within the meaning of tax acts, and thus not every payment affects the moment when the tax consequences arise in CIT or VAT. The nomenclature does not determine the tax consequences of a particular payment. Therefore, each case should be analyzed individually to avoid business and tax problems. This may include among others: Advance payment and CIT – when tax revenue arises In principle, the date of income from business activity is the date of delivery of the item (goods), sale of the property right, performance of the service or partial performance of the service, but no later than the date of: At the same time, the Corporate Income Tax Act (and, by analogy, the Personal Income Tax Act) explicitly indicates that revenues do not include “payments collected or receivables accounted for supplies of goods and services that will be performed in subsequent reporting periods”1. This means that the payment received before the performance of the service or the delivery of goods can be: or Advance payment and VAT – when to show the output tax (and deduct input tax) As a rule, the VAT liability arises at the moment of delivery of goods or performance of services. However, if all or part of the payment (including prepayment, advance payment, deposit, instalment, etc.) was received prior to this event, the tax liability arises at the moment of receipt in respect of the amount received (with certain specific exceptions indicated in the Value Added Tax Act)2. In principle, a prepayment or advance payment towards a future transaction (although neutral on the basis of CIT) determines the moment when the output VAT should be shown (in the part corresponding to the payment received). However, the practice of tax authorities and the case law of administrative courts show that the matter is not so obvious here either. They indicate that in order for a payment to be considered an advance payment recognised for VAT purposes: Therefore, if a taxpayer receives a payment from a contractor for future services or supplies of goods that can only be ordered in the future (e.g. from a wide range of available products), such a payment may not meet the above conditions at the time of its receipt. The decisive factor will be to what extent, and at what point, the purpose of the received payment is/becomes so precise that it can be linked to the performance of a specific type of service or good (depending on the case, it may be the date of receipt of the payment or, for example, the date of placing the order or making arrangements to credit the earlier payment towards a specific service). Deposits of different nature – when no tax liability arises Sometimes the payment is in the nature of collateral, e.g. for potential losses or the performance of a specific obligation. Such a payment can be tax-neutral. However, it is possible and often used in practice that the status of this payment changes at a certain moment, after a specific condition is met, e.g. the payment of the deposit/reservation fee is credited towards the price for the delivery of the property (and only at that moment is considered an advance payment). Rules for taxation of advances / early payments – summary The nature of the payment received may have a real impact on when the entrepreneur should report the income in CIT and settle the output VAT. What is more, it is also possible that only after receiving the payment an event occurs that results in a change in its nature (affecting tax settlements). Improper qualification of prepayment, on the other hand, may lead to: Therefore, it is necessary to analyze the conditions under which payments are made each time and take care of: If you need support in the above area – please contact us. The law firm’s offer – support in preparation of VAT and CIT settlements As part of our services, we offer: Authors: Katarzyna Jaromińska / Agnieszka Czarnecka 1 Article 12(4)(1) of the Corporate Income Tax Act and Article 14(3)(1) of the Personal Income Tax Act. 2 Article 19a(8) of the Value Added Tax Act

Extensive duration of proceedings conducted by tax authorities – part 1

Usually, it is the audit activities that cause stress and concern in taxpayers – there is never complete certainty that the authority will not undermine tax settlements, determine tax arrears, or impose penal fiscal sanctions. However, taxpayers may be equally discomfortable with proceedings conducted by tax authorities, which seemingly should be less problematic and time-consuming. We are talking about proceedings initiated by the taxpayers themselves, i.e. proceedings to obtain an individual tax ruling or in the case of tax overpayments. Practice shows that the authorities are reaching for various ways to avoid deciding on the merits of the taxpayer’s application at all or to postpone this moment as far as possible. Our experience shows that protractedness applies in particular to proceedings in the following cases: When filing an application in the above cases, taxpayers often have to be very patient, and at the same time plan their processes and costs in such a way as to take into account possible delays in settling the case and the need to prepare responses to subsequent (sometimes quite numerous) requests from the tax authorities. And what is important, this does not always apply to cases where the submitted application actually contains deficiencies or ambiguities (because, for obvious reasons, these should be supplemented and clarified). In this article, we will take a closer look at the so-called interpretation proceedings. We will comment on different cases and types of the proceeding in the future, in subsequent parts of this thread. Interpretation proceedings – practices of the Director of the National Tax Information When submitting an application for an individual tax ruling, the applicant must ensure that the subject of the application, i.e. the factual state or future event, is precisely described (the obtained decision protects the taxpayer / the applicant only if it is consistent with the actual course of the transaction/event). If, when examining the application, the tax authority finds that it lacks important information necessary to issue an interpretation, it should indicate it and call on the applicant to supplement it. In such a situation, the statutory 3-month deadline for issuing an interpretation is extended by the time provided for the applicant’s response. It may seem like no big deal, but it should be remembered that the issued tax ruling gives the recipient legal protection only from the moment of its receipt/delivery (provided that it is issued within the statutory deadline) and with regard to the tax consequences of events that occurred after that date. So let’s imagine this situation: a taxpayer plans to sell a real estate complex and wants to obtain confirmation as to whether and how such a transaction should be taxed with VAT or CLTT (civil law transaction tax). The sale is scheduled for 4 months, so the taxpayer sits down to write the application, hoping that he will receive a response no later than 3 months after its submission. In such a case, any extension of the interpretation proceedings may mean that either the interpretation will be issued after the sale has been made, without giving the applicant full protection resulting from it, or in order to obtain such protection, the taxpayer will be forced to postpone the transaction already planned. Proper preparation of the content of the application for an individual tax ruling is therefore very important. Unfortunately, practice shows that even a complete and accurate application does not guarantee a decision within 3 months. It happens that the Director of the National Tax Information Service calls for supplementing the application by indicating: Such summonses are often aimed at gaining time to issue a substantive decision or to lead to a situation in which it will not be necessary at all – failure to respond to the summons within the set deadline may leave the taxpayer’s application unexamined. Sometimes it seems that as part of the request to supplement the application, the authority actually requires the submission of certain statements, its own assessments within the framework of the described facts/future event, which shifts the responsibility for this assessment to the applicant, while leaving greater freedom and decision-making power to the tax authorities that may conduct tax and customs fiscal audits at the taxpayer in the future. In such a situation, it is sufficient for the tax officer/auditor to assess the nature of the activity carried out by him, differently from the taxpayer (in the content of the application), as e.g. not constituting research and development activities, and the taxpayer will be deprived of the protection resulting from compliance with the individual tax ruling received. We will not judge the reasons for such an action of the Director of the National Tax Information. Is it due to the high workload of the authority, too superficial reading of the application by the official, or from a lack of decision as to how to deal with the matter and the desire to “buy” additional time to develop a solution. Nevertheless, there is one moral for taxpayers, simple procedures may not lead to the expected results if the application is not prepared with awareness of the tricks used by the authorities. Summary Obtaining an individual tax ruling can bring many benefits. However, in order to receive it well in advance and ensure maximum protection against possible negative tax consequences, you should take care in particular of: In all of the above aspects, the help of an experienced tax advisor is invaluable – and we offer you such support. Authors: Katarzyna Jaromińska / Agnieszka Czarnecka

Renting a car abroad and withholding tax

In the course of their business, entrepreneurs often decide to rent a car for business purposes, including foreign trips. They then consider whether and to what extent the received rental invoice can be included in tax-deductible costs or constitute the basis for VAT deduction. However, they very often forget that in a situation where a car is rented outside Poland, there may also be taxation of rental payments with withholding tax (WHT). Failure to analyse and exercise due diligence in this regard, on the other hand, may have negative consequences for the domestic entrepreneur – in terms of liability for tax arrears and penal fiscal liability for breach of the tax remitter’s obligations. Checking whether payments for the use of a car rented abroad are subject to withholding tax in a given case will be very important, since if so, you should ask yourself what WHT rate to apply and on what terms. Car rental and national (Polish) regulations In accordance with the provisions of the Income Tax Acts, a Polish entity making payments to foreign entities may be obliged to withhold and pay the so-called withholding tax (WHT) in Poland. However, this applies only to strictly defined types of payments, including, m.in, fees “for the use or right to use industrial equipment, including a means of transport”1. In this case, the WHT rate is 20%. This means that a Polish entrepreneur making a payment to a foreign entity for renting a car should pay 20% of the tax on such a receivable to the tax office. Will it always be like this? Well, it do not have to. The Polish provisions on withholding tax are applied taking into account double tax treaties to which Poland is a party. Double Tax Treaties (DTT) – Royalties vs. Business Profits Depending on which country the car rental company is based (or more precisely, has its tax residence), the rules for taxing car rental payments may vary. Some double tax treaties include “fees for the use or right to use an industrial device” in the definition of license fees (royalties). And if the agreement does not contain its own narrow legal definition of the term “industrial equipment”, then (in accordance with Article 3(2) of individual double tax treaty) such a concept should be interpreted in accordance with national (Polish) tax regulations – which, as mentioned above, directly include means of transport in the concept of “industrial equipment”. This position is also shared by the Polish tax authorities and administrative courts. Car rental fees qualified as royalties will be subject to WHT, however, under certain conditions, they may benefit from taxation at a reduced WHT rate (usually between 5% and 15%). In other cases, i.e. when a given double tax treaty does not include fees related to the use of industrial equipment in the concept of royalties, such fees will be taxable only in the country of residence of the entity receiving the payments (without the need for the tax remitter to collect WHT). Therefore, it will be crucial to determine each time which double tax treaty may apply and to carefully analyze its provisions. Conditions for the use of the preference provided for in the international agreement (DTT) It should also be remembered that the mere reference to the provision of the relevant double tax treaty is not sufficient to apply the reduced rate or exclusion from WHT. Polish entity acting as the remitter is obliged to exercise due diligence and properly document it in order to be able to demonstrate to the tax authorities that it has correctly verified the entitlement to apply a given preference. In this respect, the absolute minimum is to obtain a certificate of tax residence from the car rental entity valid for the period of payment for the car rental fee. In practice, however, there may be a problem with obtaining it. In addition, the authorities often require more extensive documentation, confirming the actual conduct of business by the car rental entity or his status as the beneficial owner of the payments received. Any deficiencies or inaccuracies in this regard may result in the refusal to apply the provisions of the relevant DTT. And this means that the domestic entrepreneur is obliged to pay 20% of WHT on the basis of national regulations – however, if it is not possible to deduct WHT from the payment made, it may be necessary to gross it, which is associated with an additional expense on the part of the Polish tax remitter and the need to assess the possibility of including it in tax-deductible costs. Settlement of rent with an employee – an exception A distinction should be made from the presented above situation in which the employee rents a car abroad in his own name and his/her surname appears on the invoice as the buyer of the rental service, and the employer only reimburses him for the rental costs incurred in this regard. In such a situation, the tax authorities consider that the employer is not obliged to collect WHT, because the employer is not the buyer of the rental service and does not make payments directly to the foreign rental entity. Summary Failure to analyse the effects of using cars rented abroad on the basis of withholding tax and deficiencies in the documentation confirming such an analysis may result in irregularities in the settlements of Polish taxpayers. As a rule, these are not large amounts at a time, but the repetition of such transactions in the long run will increase the amount of risk and result in the need to rectify settlements for longer periods. Therefore, if there are cases of use of cars rented from foreign entities in your business, or if you are planning such transactions and you are interested in creating or refining procedures in this area – please contact us. As part of our services, we offer: Authors: Katarzyna Jaromińska / Agnieszka Czarnecka 1 Article 21(1)(1) of the Corporate Income Tax Act and, respectively,

Minimum tax for 2025 (and subsequent years?) – who will pay it and how to calculate it?

The end of the year is not only the need to settle “ordinary” income tax (CIT). On the date of filing the annual return, taxpayers may also be obliged to calculate and pay the so-called national (Polish) minimum tax. Note: The national (Polish) minimum tax commented below is different from the equalization tax (Pillar II), which covers the taxation of large capital groups at the global and local level. The national minimum tax can apply to virtually any taxpayer, which is why it is necessary to carry out detailed calculations – especially since tax authorities are increasingly demanding that they be provided, even from those entrepreneurs who have not been affected by this tax in the end. So who can be covered by the national minimum tax obligations and what actions should be taken to demonstrate that they have been carried out with due diligence? What is the minimum tax? The minimum income tax is an additional tax introduced into the Polish Corporate Income Tax Act to prevent the artificial underestimation of income and its transfer abroad. As a result, it assumes taxation of those entities that show a loss on their business or a very low level of the so-called profitability (no more than 2%). Who does it concern? Any person may be subject to the national minimum tax: being a Polish tax resident and a foreign entrepreneur conducting business through a permanent establishment located in Poland. Importantly, the Corporate Income Tax Act contains a number of exceptions, excluding from the group of taxpayers of the national minimum tax, m.in. “small taxpayers”, financial institutions or companies whose shareholders are only natural persons, as well as taxpayers who are part of a group of at least two companies meeting the relevant ownership requirements and profitability levels. However, most exclusions are subject to additional requirements, so they should be applied with caution, taking into account all relevant circumstances. Step 1: Profitability calculation In order to determine whether a taxpayer meets the conditions for taxation with the national minimum tax for a given tax year, it is necessary to first verify the level of its profitability. ATTENTION! Step 2: Determination the tax base If the taxpayer’s profitability is no more than 2% or if he has incurred a loss on his business (and does not benefit from any exemptions), he may use two alternative methods of determining the tax base (you should inform your head of the tax office about its choice): Depending on the structure of costs and revenues of the taxpayer, method 1 or method 2 may be more advantageous, so it is worth making this decision consciously. Step 3: Calculation and payment the minimum tax The national minimum tax is 10% of the tax base. Its value is disclosed in the CIT-8 return (next to the “ordinary” income tax) and in the CIT/M attachment “Information on the amount of minimum income tax”. However, this does not mean that the entrepreneur pays double tax. The following are subject to payment to the tax office: and What is more, the taxpayer has the right to deduct the national minimum tax paid in subsequent tax years. Summary The current regulations on the national minimum tax lead to the situation that in practice a significant number of entities may not be obliged to pay it. However, this does not exempt them from the obligation to carry out detailed analyses and complex calculations, even before the deadline for filing the annual tax return (i.e. by the end of the third month after the end of the tax year). If you need support in fulfilling the obligations related to the minimum national tax – please contact us. As part of our services, we offer: Author: Agnieszka Czarnecka

Author name: Alicja