PKF Alerts

On January 27th, 2023, the polish President signed the Act of December 1st, 2022 amending the Labor Code and certain other acts (hereinafter: the "Act"), introducing significant changes to the Polish legislative system, including, among others, regulating remote work as a permanent solution. The provisions in this regard come into force on 7 April this year.

In the current legal status – in the case of tax schemes (MDR), other than cross-border, from 31.03.2020, the deadlines for reporting to the Head of the National Tax Administration remain suspended until the 30th day following the date of cancellation of the state of epidemic threat and the state of epidemic announced in connection with COVID-19.

From 1 January 2022, the institution of the Polish Holding Company (PSH) was introduced into the Polish legal system. The regulation is addressed to Polish holding companies that have domestic or foreign subsidiaries. PSH is an alternative to the tax capital group (TCG) and exemptions within a special economic zone or the Polish Investment Zone.

On June 10th, 2022, the Council of the European Union (hereinafter: the EU Council) published a draft of the derogation decision, which authorizes Poland to introduce the obligation to issue invoices in a structured form. The draft document has been made available on the website of the official database of European Union legal acts EUR-Lex.

Remote work is used by many employers, especially those recruiting employees abroad. Many of them are unaware of the tax risk involved. In the opinion of the tax authorities, hiring employees who work remotely from their locations in Poland, may lead to the establishment of a permanent establishment on its territory. Such position was presented, i.a., by the Director of the National Tax Information in the tax ruling of 17th February 2022 (no. 0111-KDIB1-2.4010.655.2021.2.BD).

The National e-Invoices System (hereinafter: KSeF) has been operating in the Polish legal order since January 1, 2022. These regulations were adopted as part of a wider package of tax changes called SLIM VAT 2.

In addition to the popular changes with respect to personal income taxation, the Polish Deal has also introduced significant changes with respect to withholding tax. Below we present the most important of them.

On the website of the Government Legislation Center on October 18, 2022, another version of the draft act amending the Act - Code of Commercial Companies and certain other acts (hereinafter: "Draft", "Amendment") was published. As an introduction, it should be noted that the Amendment focuses primarily on the processes of mergers, transformations and divisions of companies and is the next stage of the implementation of the so-called company law package, which includes Directive 2019/2121 of the European Parliament and of the Council of 27 November 2019 amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions (OJ L 321 of 12.12.2019) (hereinafter: "Directive 2019/2121").

Thanks to the Polish Governance, the subjective scope of a foreign controlled entity (ZJK) has once again been extended. Due to the new criteria for separating ZJK, the regulation may apply to a wide range of Polish taxpayers who have a certain level of control in foreign entities and thus impose on them the obligation to tax undistributed profits of ZJK in Poland.

In the list of legislative and program works of the Council of Ministers under the number UC118, the assumptions for the draft act amending the Act of Labour Code and some other acts (hereinafter: the "Draft Act") implementing the Directive of the European Parliament and of the Council (EU) 2019/1152 into the Polish legal system of 20 June 2019 on transparent and predictable working conditions in the European Union (Journal of Laws of the European Union L No. 186, p. 105) (hereinafter: the "Transparent Conditions Directive" or "Directive").