Below we present selected legal and tax issues of the Act of 16 April 2020 on special support instruments in connection with the spread of the SARS-CoV-2 virus, which is a continuation of the Government’s activities in the area of implementation of the Anti-Crisis Shield.
Changes introduced by the Anti-Crisis Shield 1.1. are divided into:
– requiring submission of an application
– not requiring submission of an application
– procedural changes
In subsequent tax alerts we will inform you about any changes and additional clarifications of current doubts as to the manner of implementation and the scope of support offered.
If you have additional questions or concerns, please contact us.
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Support that requires submission of an application
Financial support for a protection of workplaces
– The catalogue of entities that may benefit from the financial support for protection of workplaces has been expanded to include non-governmental organizations, associations of local government units, social cooperatives, sports clubs, public benefit organizations and state legal persons who faced a reduction in economic turnover following COVID-19.
– Financial support is granted for a total period of 3 months falling from the month of submitting the application, and not – as before – from the date of its submission, which means that the support will cover the entire calendar month, regardless of the date of submission of the application.
– In addition, the amended regulations abandon the rule that the employer cannot terminate the employment agreement for reasons not related to the employee during or in the periods immediately following the period of receiving the support, however not longer than for a total period of 3 months. Therefore, the employee will benefit from protection against dismissal only during the period of receiving the grant by the employer.
Financial support for self-employed
– The requirement was abandoned that a self-employed entrepreneur (not employing employees) who received the financial support was obliged to conduct business activity after the end of the financial support for a time equal to the period of receiving the support.
Exemption from social contributions for small entrepreneurs
– The group of entrepreneurs that may benefit from the exemption from the obligation to pay unpaid social security contributions, health insurance, Labour Fund, Solidarity Fund, Guaranteed Employee Benefits Fund or Bridging Pension Fund has been expanded to include payers who as of 29 February 2020 have reported for insurance between 10 up and 49 people. The number of insured persons is calculated excluding young employees.
– An entrepreneur employing between 10 and 49 people will be able to benefit from a 50% exemption from the total amount of contributions due for the period from 1 March 2020 to 31 May 2020, if such entrepreneur was registered as social contributions remitter before 1 April 2020. The application for exemption must be submitted to Social Insurance Institution (hereinafter: ZUS).
– Exemption from the obligation to pay contributions shown in the settlement declaration for March 2020 will also be possible if the contributions for that month have already been paid. Contributions that have been paid are refundable under the principles set out in the Act on social security system.
Exemption from social contributions for self-employed
– Entrepreneurs who pay social security contributions exclusively for themselves (so-called self-employed) will be able to submit an application for the exemption with respect to unpaid social security and health insurance contributions for the period from 1 March 2020 to 31 May 2020, only if the business have been operating before 1 April 2020 year (and not only before 1 February 2020 as before) and on condition that the revenue from business activity earned in the first month for which the application for exemption from paying contributions is submitted was not higher than 300% of the forecasted average monthly gross salary in the national economy in 2020 (PLN 15,681); the application must be submitted to ZUS.
Withdrawal from charging late payment interest on ZUS contributions
– Social security contributions payers (regardless of the size of the enterprise) will be able to submit a request to waive penalty (late payment) interest on contributions due for the period after 31 December 2019. The application shall be submitted to the Social Insurance Institution within the period of epidemic emergency or epidemic status or in the 30 days following their cancellation.
Pay for downtime
– So far, the regulations foreseen a one-off downtime pay in the amount of PLN 2,080 (i.e. 80% of the minimum remuneration for work ). The amendment foresees the possibility of re-granting this benefit, but not more than three times. Downtime pay may be received again not earlier than in the month following the month of payment of the support. The condition for granting the downtime period benefit is to declare and demonstrate by the entrepreneur that her/his financial situation has not improved. The entrepreneur needs to submit relevant application to ZUS to obtain the support.
– A person who runs a non-agricultural economic activity (self-employed) will also be entitled to a downtime pay, if she/he started conducting the economic activity before 1 February 2020 and:
- has not suspended the economic activity and if the revenue from the economic activity obtained in the month preceding the month of submitting the application for a downtime pay was at least 15% lower than the revenue obtained in the month preceding that month;
- suspended the economic activity after 31 January 2020.
– Thus, the requirement that the entrepreneur’s revenue earned in the month preceding the month of submitting the application for downtime pay was not higher than 300% of the average monthly remuneration from the previous quarter announced by the President of the Central Statistical Office (GUS) (currently PLN 15,596) was abandoned.
– In the case of persons conducting economic activity subject to flat-rate income tax in the form of a tax card, and who benefited from the VAT exemption – the downtime pay will amount to PLN 1,300 (i.e. 50% of the minimum remuneration for a work <2,600 PLN>).
– The amended provisions of Shield 1.1. apply also to the agreements granting the support for the protection of workplaces, concluded before the date of entry of the Shield 1.1 into force.
Support as admissible state aid
– It has been clarified that support:
- granted on the basis of the Shield 1.1. and
- granted on the basis of the provisions of the Tax Ordinance Act in connection with COVID-19
In line with the conditions set out in the Commission Communication – Temporary framework for state aid measures to support the economy in the current COVID-19 outbreak (2020 / C 91 I / 01) constitutes the state aid to remedy a serious disturbance in the economy.
Support not requiring submission of an application
Tax capital groups
– A taxpayer being a tax capital group, which will suffer negative economic consequences in 2020 due to COVID-19 and will, therefore, not fulfill the condition of a 2% profitability ratio and the lack of tax arrears, will maintain the status of a tax capital group. The above solution applies to the tax year that began before 1 January 2020 and ends after 31 December 2019, or began after 31 December 2019 and before 1 January 2021.
– The deadlines for preparing local and group transfer pricing documentation have been extended for taxpayers with a shortened tax year. For entities whose tax year or financial year started after 31 December 2018 and ended before 31 December 2019, the deadline for submitting a statement on the preparation of local transfer pricing documentation was extended to 30 September 2020. The deadline to attach group transfer pricing documentation to local transfer pricing documentation was extended to 31 December 2020.
The possibility of allocating 1% PIT after the deadline
– Taxpayers who will submit a tax return or PIT-OP declaration for 2019 after the original deadline, but no later than by 1 June 2020 as well as those who will correct the tax return submitted by 30 June 2020, may transfer 1% of tax to a selected public-benefit organizations.
The tax on civil law transactions (PCC)
Exemption from taxation of the sale or exchange of a virtual currency
– The regulation of 11 July 2018 that waived the collection of tax on civil law transactions on sale or exchange of a virtual currency transactions is valid until 30 June 2020. In order to ensure continuity in not charging this tax on the sale and exchange of virtual currencies, an exemption has been introduced, applicable to the sale and exchange of virtual currencies transactions made as of 1 July 2020.
Optional exemption/ deferral in real estate tax
– Municipalities will be able to introduce a real estate tax exemption or extend the deadlines for payment of real estate tax installments (no longer than until 30 September 2020) also for non-governmental organizations and other entities such as associations of local self-government units, social cooperatives, sports clubs whose financial liquidity worsened as a result of the COVID-19 outbreak.
Extending the scope of customs and treasury control
– The scope of customs and treasury control has been extended by the possibility to audit the complying with the rules stipulated in the Act of 5 December 2008 on preventing and combating infections and infectious human diseases relating to the restrictions or prohibitions on selling and use of certain items or food products. Such controls may be carried out on the basis of the professional ID card and permanent authorization to perform the control.
– New controlling rights have also been introduced, such as:
- the right to inspect goods and means of transport;
- rights in relation to the contractor of the entity to whom restrictions or prohibitions apply, if the restricted goods are to be delivered to this entity or are to be released from the contractor’s warehouse.
Delivery of postal items
Suspension of the deadline for returning a postal advice notice to the sender and no presumption of effective delivery
– The letter that was subject to confirmation of receipt (if the date of receipt fell during the period of epidemic emergency or epidemic status) shall not be considered delivered during the period of epidemic emergency or epidemic status and within 14 days from the date of lifting these conditions.
– The above regulations do not apply to:
- proceedings conducted on the basis of the provisions of the gambling act,
- proceedings in the area of counteracting the use of the financial sector for tax fraud,
- tax control, customs and treasury control and tax proceedings, if these controls or proceedings are related to the suspicion of committing a crime or tax misdemeanour;
- postal items sent to or sent by courts and tribunals, the prosecutor’s office and other law enforcement bodies, court bailiffs.
– The postal operator will not return to the sender a postal item, which – based on the above mentioned regulations – could not be delivered to the addressee and will be entitled to deliver it at a later date than standard. However, this does not apply to postal items sent to or sent by the courts and tribunals, the prosecutor’s office and other law enforcement bodies, court bailiffs.
– The possibility of using the postal service was introduced, in which the registered mail will be accepted and then delivered to the addressee in the form of an electronic document without the need to provide a personal signature (so-called hybrid mail). Delivery of such a mail may take place by means of electronic communication, if the addressee agrees to it and authorizes the operator designated to receive registered mails to do so.
– Importantly, the possibility of using this form of delivery applies only to entities with a trusted profile that can still carry out procedural activities in administrative proceedings using the ePUAP system.
– This form of a service does not apply to postal items sent to or sent by the courts and the Tribunals, the prosecutor’s office and other law enforcement bodies and the court bailiff.