We would like to present you with a short, original summary of important tax and business law topics in 2024. This applies both to changes in tax law and other important issues. It is worth analysing them in terms of their impact on your business.
National System of e-Invoices (Pol. KSeF)
The tax “number one” topic of the coming year will certainly be KSeF.
Let us remind you that the mandatory KSeF enters into force – as a rule – on 1 July 2024. Exempt taxpayers have a little more time. This obligation will apply to them from 1 January 2025.
It is worth emphasizing once again that KSeF will be a significant revolution in the activity of entrepreneurs. It will apply not only to issuing and sending invoices. The changes will inevitably also affect business processes, such as the rules for document circulation, acceptance and archiving.
Therefore, KSeF is a challenge not only for financial departments, but also for many business departments.
We recommend that you do not postpone the changes, but start preparing for the KSeF as soon as possible.
The current parliamentary majority made many promises in the area of taxes during the election campaign. They concerned, for example, an increase in the tax-free amount or changes in the health insurance contribution. At the moment, however, it is difficult to predict what solutions will be implemented – so far, there are no specifics yet.
Tax on shifted income
The tax on shifted income for 2023 will be settled in accordance with the amended regulations. Some of them have clarified or modified the previous rules.
Crucially, however, this will be the first year of the presumption that the tax is due – it will be the Polish entity that will have the burden of proving that the conditions for taxation have not been met!
Gathering the right documentation may therefore be one of the biggest challenges during the 2023 annual settlement.
“Minimum” income tax (the Polish CIT Act)
The minimum income tax was introduced by the provisions of the “Polish Deal”. However, the application of these provisions has so far been postponed. From 2024, they are to be applied again. So far, there is no information about another postponement.
Let us remind you that this tax is to be paid by CIT taxpayers who during the tax year incurred a loss from an “operating” source of income or achieved a “tax” profitability of no more than 2%. The tax is to be 10% of the tax base.
Importantly, the tax would be paid for the year 2024. Therefore, its first effective settlement will take place after the end of 2024 (effective settlement in 2025). Taxpayers will be obliged to settle it on their own, according to one of two methods (standard calculation or simplified method).
It will be important to determine: whether a given taxpayer is subject to this tax at all (the CIT Act provides for a number of exclusions) and to forecast the annual result on an ongoing basis.
Reduced VAT rate on food
Under the current law, the 0% VAT rate on food will be in force until the end of March 2024. This is a change introduced by a ministerial decree.
However, it is not certain whether there will be a return to statutory rates after this date. The key aspect here will probably be the economic situation and the financial condition of the state budget.
“Minimum” tax (Pillar II)
From 2024 Poland should implement the so-called Pillar II Directive (Directive on ensuring a global minimum level of taxation for international groups of companies and large domestic groups).
It introduces a minimum tax addressed to international and local capital groups with an annual global turnover of more than EUR 750 million.
Its role is to ensure that such entities settle the tax at the level of at least 15%.
So far, however, there has been no legislative work in this area disclosed by the Ministry of Finance. It is possible, however, that the new management of the ministry will soon present such proposals.
In 2024, it will be possible to shorten the depreciation period for buildings and residential structures by taxpayers from the SME sector, depending on the level of unemployment in a given county (Pol. powiat).
These are self-generated fixed assets that are non-residential buildings (premises) and structures included in groups 1 and 2 of the Classification of Fixed Assets (KŚT), entered into the fixed asset register of a given taxpayer for the first time.
The regulations apply when this fixed asset is located in the territory of the municipality:
- located in a county where the average unemployment rate is at least 120% of the average unemployment rate in the country, and
- where the rate of tax revenue per capita in the municipality is less than 100% of the rate of tax revenue for all municipalities.
The depreciation period may be shortened to 5 or 10 years (depending on the unemployment rate in a given municipality).
In 2024, we expect the adoption of legislation implementing DAC7 and Directive 2021/2101. The first one introduces reporting obligations for operators of digital platforms, the second is the obligation to publicly disclose the income tax report by country (for the largest entities).
Real Estate Tax
The maximum Real Estate Tax rates that communities can impose have been increased. For example, the rate: on land related to conducting business activity may amount to PLN 1.34 per 1 m2 of area, and on buildings related to conducting business activity and on residential buildings or their parts occupied for conducting business activity may amount to PLN 33.1 per 1 m2 of usable area.
It is worth following the approach of specific communes where fixed assets are held on an ongoing basis.
We are still waiting for the implementation of the Whistleblower Protection Directive. Poland is significantly behind in this process.
By the end of January 2024, the first quarterly report on CBAM must be submitted. Further reports after the end of each subsequent quarter.
PIT exemption limits for benefits from the Company Social Benefits Fund are returning to the “pre-pandemic” level of PLN 1,000 (from PLN 2,000 currently).
Due to the two-fold (1 January 1 and 1 July) increase in the minimum wage, the quota thresholds in the Penal Fiscal Code will increase, in particular:
- the threshold for delineating a crime and a minor offence will be: PLN 21,210 (from 1 January to 30 June) and PLN 21,500 (from 1 July to 31 December);
- analogous values will be applied to the maximum level of the fine that may be imposed by a fine ticket;
- the maximum fine for a fiscal offense may amount to PLN 40,723,200 (from 1 January to 30 June) and PLN 41,279,040 (from 1 July to 31 December).
On 1 January 2024, the levy for single-use plastic packaging products comes into force. It is to be 20 groszy for cups and 25 groszy for meal packaging.
The Council of Ministers of Mateusz Morawiecki has proposed to increase certain limits for depreciation purposes. However, it is difficult to predict whether this solution will be supported by the new parliamentary majority.