Publications

The new year will see the amendment of the provisions of the PIT Act regarding the tax decreasing amount, i.e. the amount determining the level of income on which no tax will have to be paid by a taxpayer.

Proper determination whether, for VAT purposes, a service will be connected with immovable property is often problematic for taxable persons.

The Act on the amendment of the Goods and Services Tax Act and certain other laws was published in the Journal of Laws no. 2024 of 15 December 2016.

The Act of 5 September 2016 amending the Personal Income Tax Act and the Corporate Income Tax Act, to be effective as of 1 January 2017, was published in the Journal of Laws No. 1550. The most significant change in the new regulations is a lower CIT rate for certain taxpayers, going down from 19% to 15%. Other amendments in both the CIT Act and the PIT Act are aimed at sealing the tax system by clarifying the regulations which may be prone to interpretation doubts.

On 29 November 2016, an amendment to the provisions of the Personal Income Tax Act, Corporate Income Tax Act and the Act – General Tax Code (Journal of Laws of 2016, item 1926; the “Amendment”) was announced. The part of the provisions of the Amendment concerning taxation of close-end investment funds and foreign close-end collective investment schemes comes into force on 01 January 2017.

On 7 October 2016, the Supreme Administrative Court gave a judgment (ref. no. II FSK 2532/14, unpublished), not favourable for taxpayers, about separate chargeability of real property tax on a building – a production hall in this case – and on a structure situated inside that hall, namely a production line.

On 15 September 2016, the Court of Justice of the European Union gave a judgment in Case C-516/14 Barlis 06 – Investimentos Imobiliarios e Turisticos SA v Autoridade Tributaria e Aduaneira, involving the right of the Portuguese company to deduct VAT from invoices documenting legal services provided to it by a firm of lawyers.

Recently there have been communications of changes to the system of taxation of income earned by natural persons. The principles of levying tax and social security contributions on income applied to date are to be replaced by the so called unified tax, the amount of which will take into account income tax of natural persons and contributions for social and health insurance.

When determining equity for the purpose of thin capitalization, a taxpayer has to leave out from the calculation e.g. the value of revaluation capitals or equity from subordinated loans received. Proper determination of equity for those purposes has an impact on tax deductible expenses in connection with interest paid on loans advanced by related companies.

Proper determination whether in the case of a real property sale transaction planned by taxpayers VAT exemption will be applicable or the sale has to be taxed by applying the basic rate seems to be problematic not only for taxpayers but for tax authorities as well.