Shield 4.0 with the President’s signature – summary of changes
On June 23, 2020 the Journal of Laws published the Act on subsidies to interest rates on bank loans granted to entrepreneurs affected by COVID-19 and on a simplified procedure for approval of settlements in connection with COVID-19 (Journal of Laws 2020, item 1086). According to an announcement, this is the last package of changes to help entrepreneurs affected by the coronavirus epidemic. Below, we present key solutions in respect of taxes which are provided for in the so-called Shield 4.0.
Tax schemes
According to the regulations implemented by a previous version of the Anti-Crisis Shield, the deadlines for reporting tax schemes, both domestic and cross-border ones, were suspended from March 31, 2020 until the cancellation of the state of emergency and epidemic imposed in connection with COVID-19, but not later than until 30 June 2020.
Shield 4.0 provides for suspension of the MDR deadlines for domestic schemes until 30 days following the cancellation of the state of emergency and epidemic. However, the extension does not apply to the notification of cross-border schemes. In that case, the suspension will only be in force until June 30, 2020.
Relief for bad debts in CIT and PIT
Shield 4.0 introduces the possibility of earlier use of the so-called bad debts relief in taxes for creditors who suffer negative economic consequences due to COVID-19. They will be able to reduce their taxable revenue starting from the accounting period, in which 30 days have lapsed from the date of the payment deadline specified in the invoice (bill) or in an agreement. Currently, the legislation provides for a 90-day deadline. Notably, this solution only applies to income taxes - there have been no changes in the relief for bad debts in VAT.
Transfer pricing
Related parties have received more time to comply with obligations connected with transfer-pricing documentation. According to Shield 4.0, the deadline for the submission of a transfer pricing report (TPR) and a statement of preparation of local transfer-pricing documentation has been extended:
- until December 31, 2020 – where that deadline expires between March 31, 2020 and September 30, 2020;
- by 3 months – where that deadline expires between October 1, 2020 and January 31, 2021;
In the case of a large group of taxpayers whose financial year coincides with the calendar year, those time-limits will therefore expire on 31 December rather than 30 September. What is more, the provisions also provide for an extension of the deadline for preparing the group documentation (the so-called Master file) until the end of the third month from the day following the day on which the deadline for submitting the statement expired.
Tax on revenue from buildings
Shield 4.0 has introduced an exemption from the tax on revenues from buildings for the period between March 1, 2020 and December 31, 2020. The possibility of using the exemption is not subject to any additional conditions.
Certificate of residence
In the case of a certificate of residence, whose 12-month period of validity expires during the state of emergency or epidemic imposed in connection with COVID-19, when collecting the tax, the taxpayer may use this certificate for the two months after the state has been cancelled. In the same period, the taxpayer’s residence or seat for tax purposes may be confirmed by a copy of the certificate of residence. What is more, tax authorities can also deem a certificate issued in 2019 valid if the taxpayer has a statement on the validity of the data included in it.
New JPK (SAF-T) structure
The regulations have postponed the entry into force of the provisions of the VAT Act regarding a new JPK_V7 from July 1 to October 1, 2020.
Possibility of deduction of donations
The list of entities has been extended to whom a donation made between January 1, 2020 and September 30, 2020 to counter COVID-19 will entitle the donor to a reduction of the taxable base. These include among others homes for mothers with small children and pregnant women, public accommodation facilities, shelters for the homeless and social welfare homes.
Furthermore, the taxpayer may also deduct from the tax in-kind contributions of laptops or tablets donated between January 1, 2020 and September 30, 2020 to authorities running educational institutions and to public benefit organisations. The regulations state that such computers must be fit for use and manufactured not later than 3 years before the date of being donated.
Anna Skórska, Tax Consultant, ATA Tax Sp. z o.o.
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