Month: May 2025

Member States of the European Union, including Poland, are currently developing special regulations (so-called special acts) enabling the legal residence and work of Ukrainians fleeing the war. National regulations will differ from one another. However, regardless of national solutions, on 4 March 2022, by Council Decision 2022/382, the provisions of Council Directive 2001/55/EC of 20 July 2001 establishing minimum standards for temporary protection in the event of a mass influx of displaced persons were activated.

The decision introduces temporary protection for three categories of persons:

• Ukrainian citizens residing in Ukraine who were displaced from 24 February 2022 as a result of the military invasion by Russian armed forces which took place on that day;
• third-country nationals or stateless persons legally residing in Ukraine who were displaced from 24 February 2022 due to the military invasion by Russian armed forces which occurred on that day, and who are unable to return to their country or region of origin in a safe and durable manner due to the situation prevailing in that country of origin. This may include persons who, at the time of events leading to the mass influx of displaced persons, held refugee status or equivalent protection in Ukraine, or who applied for asylum. Third-country nationals who were legally long-term residents in Ukraine at the time of the events leading to the mass influx should benefit from temporary protection regardless of whether they could return to their country or region of origin safely and durably;
• family members of the two above-mentioned categories, provided such families existed in Ukraine at the time of the circumstances leading to the mass influx of displaced persons, regardless of whether the family member could return to their country of origin safely and durably. According to Council Directive 2001/55/EC, a family member means the spouse of a person belonging to the two aforementioned categories or a partner in a stable relationship with that person, if the law or practice of the Member State treats unmarried couples comparably to married couples under its immigration law; minor and unmarried children of the two categories or their spouses, regardless of whether they were born in or out of wedlock or adopted; other close relatives who lived together as one family at the time of the circumstances leading to the mass influx of displaced persons and who were wholly or partly dependent on the persons belonging to the two categories.

Problems with the Polish special act
Poland, based on Implementing Decision 2022/382, is obliged to provide assistance to every Ukrainian citizen arriving in Poland, as well as stateless persons and third-country nationals other than Ukrainians who resided in Ukraine before the outbreak of war, i.e. before 24 February 2022, and who meet the conditions described in that decision. Meanwhile, the Polish special act published on Saturday, 12 March 2022, completely omitted the category of other persons, including stateless persons and third-country nationals other than Ukrainians, who legally resided in Ukraine and who are unable to return safely and durably to their country or region of origin.

Issues concerning the posting of workers

The Council Decision has significant implications for the European labour market, as Ukrainians covered by temporary protection should gain full and free access to the labour markets of all Member States. However, legislation in some countries may create additional problems in this regard. For example, German regulations preventing third-country nationals from taking up work without an additional visa – the so-called Vander Elst visa – may be considered incompatible with the directive’s content. It is, however, difficult to predict whether under German law such cases would qualify, for example, as tolerated stay with the possibility of work and thus exempt refugees from the need to obtain a visa.

Note

Ukrainian citizens who did not reside in Ukraine before the Russian invasion began (i.e. 23 February) or who left Ukraine before the invasion began (i.e. before 24 February) are not covered by the scope of the EU decision.

The Ministry of Development and Technology submitted last Thursday, i.e. 10.03.22, a draft amendment to the Act on Counteracting Excessive Delays in Commercial Transactions for public consultation. The authors of the draft declare a response to entrepreneurs’ demands regarding changes in the process of submitting reports and the elimination of interpretative doubts. Furthermore, the new solutions aim to increase the efficiency of proceedings conducted by the President of the UOKiK concerning excessive delays in fulfilling monetary obligations.

“The decision to amend the anti-delay act results – primarily – from our analyses carried out in connection with the ex post evaluation of the regulation’s effects. We also listened to the demands of various entities, including the Office of Competition and Consumer Protection, which implements important tasks related to anti-delay proceedings based on the anti-delay act. We want the regulation to be consistent, more effective and flexible than it currently is. But also not to overwhelm entrepreneurs with obligations resulting from its provisions,” said the Deputy Minister of Development and Technology, Mariusz Jerzy Golecki.

Soft calls by the President of UOKiK

The amendment envisages, among others, the introduction of the so-called soft calls. “This solution has so far been successfully used in matters concerning consumer rights. Instead of immediately resorting to financial sanctions, the President of UOKiK will first be able to draw the entrepreneur’s attention to irregularities observed in their payment of obligations,” the Ministry of Development announced. “At the same time, we want to present a modern approach to administration, which emphasises flexibility and logic in action rather than bureaucracy,” the statement reads.

New procedure for reporting obligations

The draft amendment exempts from the reporting obligation: companies belonging to tax capital groups, public healthcare entities, and healthcare entities in the form of capital companies established by the State Treasury or local government units. It also extends the deadline for submitting the report from 31 January to 30 April.

There will be a change in the process of reporting fulfilled and received obligations – the values of monetary obligations fulfilled/received will be shown in the report in relation to contractual deadlines, rather than, as previously, in relation to deadlines specified on invoices or bills. The method of reporting the value of unreceived and unfulfilled monetary obligations will also change – these values will be reported with the indication of the delay period within specified time brackets. The matter of submitting corrections to the report will also be regulated.

The deadline for publishing the report based on submitted reports has been set – annually by 31 July. Changes aimed at improving the efficiency of proceedings regarding excessive delay have also been introduced. The President of UOKiK will gain greater flexibility in imposing financial penalties for excessive delays in fulfilling financial obligations towards contractors; there will also be a modification of the formula for calculating the maximum penalty for excessive delay in fulfilling monetary obligations.

Other changes

The amendment also provides, among other things, for the invalidity of contractual provisions prohibiting the assignment of receivables in commercial transactions and imposes an obligation on all large entrepreneurs to submit a statement regarding their status. Currently, large entrepreneurs are required to submit a statement about their status to the other party in a commercial transaction only when acting as debtors of a monetary obligation.

According to the drafters, the primary beneficiaries of the changes will be small entrepreneurs. As stated, increased efficiency of proceedings conducted by the President of UOKiK should motivate large entrepreneurs to settle their obligations on time towards entrepreneurs from the SME sector. The invalidity of the contractual provision prohibiting the assignment of receivables in commercial transactions is mainly introduced in the interest of SMEs. “The contractual prohibition on the assignment of receivables is particularly burdensome in asymmetric relationships where there is an element of contractual superiority,” the Ministry of Development and Technology announced.

According to the Ministry, the modified content of reports will better reflect the payment practices of the largest entrepreneurs, which will allow contractors to better assess their payment reliability and thus potentially protect them from entering into risky business relationships. Additionally, exemption from the reporting obligation for companies belonging to tax capital groups will relieve some SME entities of this obligation – individual companies within tax capital groups are often not the largest taxpayers.

From 15 March, it has been possible to submit notifications about assigning work to Ukrainian citizens via the portal praca.gov.pl, as provided for in the Act of 12 March 2022 on assistance to Ukrainian citizens in connection with the armed conflict on the territory of that country. However, some employers still have doubts as to whether the notification replaces a work permit/declaration of entrusting work for every employee from Ukraine, as well as which documents should be requested from the prospective employee to ensure their legal stay in Poland.

Which Ukrainian citizens does the special act grant the right to work in Poland?

According to Article 22(1) of the special act, a Ukrainian citizen is entitled to perform work on the territory of the Republic of Poland during a stay compliant with applicable regulations, if:

1. their stay in the territory of the Republic of Poland is considered legal under Article 2(1) of the special act, or
2. they are a Ukrainian citizen legally staying in the territory of the Republic of Poland

– provided that the entity entrusting the work notifies the poviat labour office competent for the seat or place of residence of the entity within 14 days from the day the Ukrainian citizen commenced work.
The above also applies to spouses of the aforementioned Ukrainian citizens.

When is a Ukrainian citizen’s stay in Poland legal?

According to information from the government website, this concerns Ukrainian citizens who:

• are legally staying in Poland and hold a valid residence title, or
• have arrived legally on Polish territory since 24 February 2022 from Ukraine and declare their intention to remain in Poland.

A residence title is a document that entitles a person to stay on the territory of Poland or another EU country. This may include, among others:

• a permanent residence permit
• a temporary residence permit
• a passport in the case of entry and stay in Poland under visa-free movement
• a certificate of temporary protection issued by the Office for Foreigners.

Employers’ obligations
A Polish employer can legally employ a Ukrainian citizen or the spouse of a Ukrainian citizen, provided their stay in the country is legal.

Within 14 days from the date the work commenced, the employer must inform the poviat labour office – competent for the seat or place of residence of the employer. This must be done via the portal praca.gov.pl by filling in the notification form about entrusting work to a Ukrainian citizen (PSZ-PPWPU).

This procedure applies both to Ukrainian citizens who entered Poland on or after 24 February 2022, as well as to persons legally staying in Poland on another basis (e.g., temporary residence permit).

Employers should also not forget about general obligations such as registering employees with the Social Insurance Institution (ZUS) or paying at least the statutory minimum wage.

The Court of Justice of the European Union (CJEU), in its judgment of 24 February this year, case C-257/20, ruled that Article 1(1) of Directive 2003/49 on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States, in conjunction with Article 4(1)(d) of that Directive, Article 5 of Directive 2011/96 on a common system of taxation applicable to parent companies and subsidiaries of different Member States, Articles 3 and 5 of Directive 2008/7 concerning indirect taxes on the raising of capital, and Article 63 of the Treaty on the Functioning of the European Union (TFEU), read in light of the principle of proportionality, must be interpreted as not precluding national legislation which provides for the taxation by way of withholding tax of fictitious interest that a resident subsidiary company, which has benefited from an interest-free loan granted by a non-resident parent company, would be obliged to pay to that parent company on an arm’s length basis.

In its judgment of 24 February this year, case C-257/20, the CJEU confirmed that tax authorities have the right to demand the payment of withholding tax on interest which should have been due on an interest-free loan but was not paid. According to the CJEU, the tax authorities may also determine the amount of such interest on an arm’s length basis.

Facts of the Case

In the case at hand, a company based in Bulgaria received an interest-free loan from a foreign shareholder. The loan agreement provided for a 60-year repayment term and extinguishment of the obligation if the company’s share capital was increased by the equivalent amount of the loan.

After establishing that at the time of the tax audit the loan had not been converted into share capital, and that the borrower neither repaid the loan nor paid interest, the tax authority found the existence of a transaction resulting in tax avoidance within the meaning of Article 16(2)(3) of the Bulgarian Corporate Income Tax Act (CITA). The tax authority determined the market interest rate, on the basis of which the unpaid interest was calculated, and subsequently imposed a 10% withholding tax on that amount.

The company appealed against this decision, and on 20 December 2017, the defendant in the main proceedings dismissed the appeal.

By judgment of 29 March 2019, the Sofia Administrative Court, to which the company brought a complaint challenging the legality of the decision dated 16 October 2017, dismissed the complaint, holding that the disputed loan constituted a financial asset of the company generating a gain due to non-payment of interest, whereas the lender incurred a financial loss due to non-receipt of interest. According to this court, the loan amount was used to repay certain financial liabilities of the borrower referred to in the loan agreement and therefore did not constitute equity capital.

The company lodged a cassation appeal before the referring court, the Varhoven administrativen sad (Supreme Administrative Court of Bulgaria), seeking to annul that judgment.

Reasoning of the CJEU

The CJEU found that the national regulation does not constitute a restriction on the free movement of capital guaranteed by Article 63 TFEU. The Court noted that a distinction must be made between differential treatment permitted under Article 65(1)(a) TFEU and arbitrary discrimination prohibited under Article 65(3) TFEU. Case law of the Court shows that for national tax provisions such as those at issue to be compatible with the provisions of the TFEU on free movement of capital, the differential treatment must relate to situations which are not objectively comparable or be justified by overriding reasons of general interest [see similarly judgment of 18 March 2021, Autoridade Tributária e Aduaneira (Capital Gains Tax on Real Estate), C-388/19, EU:C:2021:212, para. 35].

According to the Court, in the present case, Bulgaria chose, by way of the disputed national rules in the main proceedings, to exercise its tax competence in respect of interest-free loans between borrower companies resident in Bulgaria and lending companies not resident in Bulgaria, and consequently, non-resident companies must be considered, for costs directly connected with such loans, to be in a comparable situation to resident companies.

Furthermore, the Court held that resident companies granting interest-free loans obtain a financial benefit compared to non-resident companies granting such loans, arising from the different timing at which they may deduct costs directly associated with that loan. The extent of this benefit is determined by the duration of the refund procedure established by the disputed national regulation, enabling non-resident companies to apply for a recalculation of withholding tax levied on the gross amount of fictitious interest on the interest-free loan, so that that withholding corresponds to the corporate income tax that would have been paid by the resident company granting the loan.

In these circumstances, the Court concluded that the differential treatment regarding the taxation of fictitious interest on interest-free loans depending on whether the loan is granted by a resident or non-resident company is not limited to the method of tax collection. Accordingly, such differential treatment concerns objectively comparable situations.

The Court agreed with the defendant that, pursuant to the territoriality principle, Member States have the right to tax income generated on their territory in order to ensure a balanced allocation of taxing powers. In particular, in the absence of harmonising provisions adopted by the Union, Member States retain the power to determine criteria for allocating their taxing powers. The objective of the national rules is to combat tax avoidance.

The Court concluded that the provisions providing for withholding tax on fictitious interest on interest-free loans granted by non-resident companies to resident companies are appropriate to ensure a balanced allocation of taxing powers between Member States and to guarantee the effectiveness of tax collection aimed at preventing tax avoidance.

There are frequent situations where an employee recovers unpaid salary and severance pay through enforcement proceedings by a bailiff. It is important to remember the obligation to withhold income tax advances and social security contributions in such cases. Following enforcement by the bailiff, the responsibility for settling various public-law levies lies with the employer, the bailiff, and the employee alike — regardless of the parties’ intentions or who actually controls the funds used to satisfy the claim. This article explains which parties are responsible for fulfilling these obligations and how to avoid problems with the tax office and the Social Insurance Institution (ZUS).

PIT-11 from the Bailiff – Income Tax

According to Article 42e(1) of the Personal Income Tax Act (PIT Act), “where payments of benefits specified in Article 12 are made by a court bailiff (…), rather than the employer, the bailiff is obliged, as a payer, to withhold an advance income tax payment, applying the lowest tax rate specified in the tax scale.” Pursuant to Article 42e(4) of the same Act, provisions defining the duties of payers apply accordingly. This means the court bailiff must transfer the amounts of withheld tax advances by the 20th day of the month following the month in which they were collected to the tax office account administered by the head of the tax office competent for the payer’s place of residence, while simultaneously submitting a PIT-4 declaration. By the end of February of the year following the tax year, the bailiff is obliged to provide the taxpayer and the tax office with PIT-11/8B information. If the withholding obligation ceases during the year, the bailiff must submit the information by the 15th day of the month following the month in which the last advance was collected.

The amount recovered from the employer as salary constitutes taxable income for the taxpayer at the time it is received, and pursuant to Article 45(1) of the PIT Act, the taxpayer must report this income in the annual tax return and tax the income together with other income earned in that tax year.

Offer: Tax Law Firm | Tax Advisor Warsaw

Social Security Contributions

From the salary obtained by the employee as a result of bailiff enforcement, the employer is obliged to pay social security contributions on general terms (Article 4(2) in connection with Article 17(1) of the Social Insurance System Act). The employer is entitled to claim reimbursement from the employee for the part of the withheld social security contributions financed by the employee.

Arrears in Salary and Health Insurance Contributions

According to Article 84(2) in connection with Article 81(1) of the Act on Healthcare Services, the health insurance contribution must be paid by the former employee directly to the bank account indicated by the relevant regional branch of the National Health Fund (NFZ). Apart from reporting the income in the annual tax declaration, this is the sole obligation borne personally by the taxpayer.

In summary, when salary arrears are paid by a bailiff, the bailiff is responsible for withholding the appropriate advance income tax, the employer must pay social security contributions, and the taxpayer personally must pay only the health insurance contribution and declare the income in their annual tax return.

Severance Pay

According to the current position of ZUS, severance pay paid under the Act on special rules for terminating employment relationships for reasons not attributable to employees is not subject to social security contributions.

However, severance pay is not exempt from income tax. Similarly to salary, the taxpayer must declare the income from severance pay in the tax return and pay income tax on it, which is withheld by the court bailiff as the payer of the tax advances.

Life insurance contracts with an insurance capital fund (commonly known as “polisolokaty”) often contain unlawful contractual provisions regarding the calculation of fees in the event of early termination of these contracts. This is confirmed by the prevailing position expressed in the case law of common courts. By way of example, it is worth noting the recent judgment of the Warsaw Court of Appeal dated 10 February 2022, case no. I ACa 826/21, which recognised as unlawful the provisions concerning the “surrender fee” charged upon termination of the contract. In that case, the contract did not define this fee, did not specify its components or the rules for its calculation, and, as emphasised, merely setting a percentage for the fee was insufficient.

This raises the question of how long claims arising from such unlawful contractual provisions can be effectively pursued. Two more specific questions arise: what is the limitation period for these claims, and from which moment should that period be counted?

The issue of the length of the limitation period for such claims was clarified in a resolution of the Supreme Court dated 10 August 2018, case no. III CZP 13/18, which indicated that the limitation period for such claims is set out in Article 118 of the Civil Code. This leads to the conclusion that the limitation period is 10 years for polisolokaty contracts terminated before 9 July 2018, and 6 years for contracts terminated on or after 9 July 2018. This resolution therefore unequivocally stated that such claims should not expire within the 3-year limitation period applicable to insurance contracts. The Supreme Court pointed out that such a benefit is closely connected with the investment part of the polisolokaty contract.

The second question was answered by the Supreme Court in its ruling of 13 January 2022, case no. III CZP 61/22, which held that the limitation period for such a claim by a consumer who is an insured or policyholder cannot begin before the consumer knew, or reasonably ought to have known, about the unlawful nature of the provision. This approach corresponds to a similar solution adopted in cases relating to loans indexed to CHF. Supporting this concept is the need to ensure the effectiveness of Directive 93/13/EEC, which requires national law not to create excessive barriers to consumers seeking restitution claims arising from the assessment of abusive clauses. The institution of limitation must therefore not be an obstacle for consumers in exercising legal protection against abusive (unlawful) contractual provisions. Consequently, the limitation period for consumer restitution claims cannot begin before the consumer actually knew or reasonably should have known about the unlawful nature of the clause, as only then can the consumer call upon the entrepreneur to refund the benefit.

In practice, each individual case will require determining the moment when the consumer actually became aware, or could reasonably be deemed to have become aware, of the abusive nature of the provisions concerning the calculation of fees in the event of termination of polisolokaty contracts, which calls for a detailed examination of the particular circumstances.

There is a light at the end of the tunnel for consumers who have lost final court cases brought by banks concerning Swiss franc loans and who now face enforcement proceedings. This light is the possibility of filing an extraordinary complaint (skarga nadzwyczajna) by the Commissioner for Human Rights (Rzecznik Praw Obywatelskich, RPO) to the Supreme Court. The fact that this is a realistic prospect is demonstrated by two such extraordinary complaints submitted in March 2022.

The first case concerns a consumer who entered into a loan agreement indexed to the CHF exchange rate. Due to non-repayment of the loan, the court issued a final payment order in favour of the bank. The court dismissed the consumer’s objection on the grounds that it was filed after the statutory deadline.

The second case concerns consumers who also took out Swiss franc loans but failed to repay them regularly. Accordingly, in this case as well, the court issued a final payment order in favour of the bank because the consumers did not appeal the order.

In both complaints submitted in these cases, the Commissioner for Human Rights alleged that the courts failed to examine ex officio the abusiveness of the clauses contained in the loan agreement. According to the Commissioner, the courts did not fulfil their constitutional duty to ensure adequate protection of consumers, as the weaker party in the legal relationship, because they should have examined, ex officio and not only upon the consumers’ request, whether the loan agreement contained abusive contractual provisions.

Moreover, in the second case, due to the advanced stage of enforcement proceedings, the Commissioner requested a stay of execution of the payment order until the proceedings initiated by the extraordinary complaint are concluded.

In both complaints, the Commissioner sought the annulment of the payment orders and the referral of the cases back to the district court for reconsideration.

An extraordinary complaint may be filed when necessary to ensure compliance with the principle of a democratic state governed by the rule of law implementing the principles of social justice, against a final judgment of a common court which, among other things, violates the principles or freedoms and rights of a person and citizen set out in the Constitution. In these cases, this concerns the failure to provide consumer protection arising from Article 76 of the Constitution.

Importantly, an extraordinary complaint may be filed within five years from the date the challenged decision becomes final, or if a cassation complaint or cassation appeal has been filed against the decision, within one year from the date of its consideration. It may only be filed by a closed group of public entities, including the Commissioner for Human Rights and the Financial Ombudsman. If the challenged decision has caused, for example, irreversible legal effects, the Supreme Court limits itself to declaring that the challenged decision was issued in violation of the law and indicating the circumstances that led to such a ruling.

It is also worth remembering that an extraordinary complaint may be filed only once in the interest of the same party against the same decision. Furthermore, an extraordinary complaint cannot be based on objections that were already the subject of cassation complaints or cassation appeals accepted for consideration by the Supreme Court.

Provisions in indexed foreign currency loan agreements which authorise the lender to unilaterally determine the exchange rate used to calculate the borrower’s debt and set the loan instalments, without objective and verifiable criteria stipulated in the agreement, are contrary to the nature of such a legal relationship. Such provisions, if they meet the criteria for being deemed unfair contractual terms, are not invalid but do not bind the consumer within the meaning of Article 385¹ of the Civil Code. This was held by the Supreme Court in its resolution of 28 April 2022, file ref. III CZP 40/22.

According to the ruling, in credit agreements concluded with consumers, if objective criteria are not applied, the loan contract provisions are not considered invalid but fall under the scope of abusive clause regulations. Therefore, they will not bind the borrower-consumer within the meaning of Article 385¹ § 1 of the Civil Code. The resolution was adopted by a panel of three judges of the Civil Chamber of the Supreme Court.

 

Discrepancy in Case Law

The question referred to the Supreme Court aimed to resolve the prolonged divergence in case law concerning the validity of indexed foreign currency loan agreements where the bank may unilaterally determine the exchange rate without objective criteria.

Until now, courts have adopted one of the following interpretative approaches:

• The loan contract provisions were considered invalid under Article 353¹ of the Civil Code, which provides that the content of a legal relationship cannot contradict the nature of that relationship, statutory law, or the principles of social coexistence.
• The loan contract provisions were regarded as not binding on consumers due to regulations on abusive clauses. Under the aforementioned Article 385¹ § 1 of the Civil Code, contract terms concluded with a consumer that were not individually negotiated do not bind the consumer if they shape their rights and obligations in a manner contrary to good practice and grossly violate their interests.

The difference between these views is significant. The second interpretative line limits invalidity to consumers only.

Despite numerous proceedings relating to loans denominated in Swiss francs pending before common courts, discrepancies persist in case law regarding the nature of these provisions. Although the Supreme Court has assessed the structure of indexed bank loan agreements, it has not expressly ruled on the conformity of such provisions with the nature of the legal relationship or the applicability of the provisions on abusive clauses.

Implications of the Resolution for Ongoing Proceedings

As correctly noted by the Warsaw Court of Appeal, which submitted the question to the Supreme Court: “The resolution of this issue may be significant for a number of similar cases, but also for cases where, for example, the loan agreement has a mixed character, where part of the loan is intended for non-consumer purposes related to business activity, or where the consumer status applies only to one of the borrowers.”

According to information published by the Ministry of Finance on the website of the National Tax Information on 22 April 2022, the Council of Ministers adopted a draft amendment to the Personal Income Tax Act (PIT). The main assumptions of the draft Act amending the Personal Income Tax Act and certain other Acts are as follows:

• abolition of the middle-class tax relief,
• reduction of the income tax rate for taxpayers taxed according to the scale from 17% to 12%,
• and allowing entrepreneurs on the flat tax, lump sum, and tax card to deduct part of their health insurance contributions from their taxable base,
• additionally, single parents will be able to file joint tax returns with their children, and entrepreneurs will be able to change their chosen form of taxation once again within the tax year.

“All the changes are to the benefit of the taxpayer. Our proposals have been discussed with all relevant stakeholders, thoroughly analysed, agreed upon, and adopted by the government. They will be submitted to the Sejm this month. In June, we aim to return with the final provisions so that some of them can come into effect from 1 July. We reassure everyone — changes requiring adaptation by payers will start applying from 1 January 2023 to allow time for IT systems to be updated. The proposed solutions are stable, predictable, and more universal. The greatest benefits will still go to those with the lowest incomes, many of whom will not pay any PIT at all,” said Deputy Minister of Finance Artur Soboń.

The changes included in the draft cover, among others:

• The possibility for entrepreneurs on the flat tax, lump sum, and tax card to deduct part of their health insurance contributions.
• Joint tax settlement with a child for single parents, who will benefit from 1.5 times the tax-free allowance, i.e. PLN 45,000 (single parents raising a child with disabilities will benefit from double the tax-free allowance, i.e. PLN 60,000).
• A range of other family-friendly preferences, including increasing the income threshold a child can earn without causing the parents to lose tax benefits (from PLN 3,089 to PLN 16,061.28 in 2022).
• The possibility for entrepreneurs who chose the flat tax or lump sum to switch back to taxation according to the scale within the same tax year.
• Unification of deadlines for annual PIT filings (forms: PIT-37, PIT-36, PIT-36S, PIT-28, PIT-28S, PIT-36L, PIT-36LS, PIT-39, PIT-38). These returns will be filed between 15 February and 30 April.
• A unified PIT-2 form, which will include declarations and requests affecting the calculation of advance payments.
• No health insurance contributions on remuneration of persons appointed to perform social or civic duties — up to PLN 6,000 annually.
• From 1 January 2023, the possibility to settle the tax-free allowance in advance payments on income types where it was previously not applied, e.g. contracts of mandate.
• No employer liability in case of incorrect PIT advance deductions due to inaccurate information provided by the employee. Incorrect deductions may occur when an employee submits incorrect declarations to two employers, each applying the full tax-free allowance, whereas each should apply only half.
• Tax relief for historic monuments limited strictly to renovation costs. A formal condition will be introduced — relief can be claimed only after the renovation is approved by the monument conservator.

Offer: Legal advisor – tax law

The draft leaves unchanged favourable provisions effective since 1 January 2022, including the higher tax-free allowance (PLN 30,000) and higher tax threshold (PLN 120,000). The Deputy Minister of Finance points out that, out of 25 million taxpayers, the changes will benefit 13 million, while the rest will be neutral. Prime Minister Mateusz Morawiecki added that the proposed change in the settlement of health contributions will mean lower taxes for 1.4 million entrepreneurs.

Link to full draft text: Bill no. 2186 – Sejm of the Republic of Poland

President Andrzej Duda signed an amendment to the Act on Employee Pension Programmes (PPE), Individual Retirement Accounts (IKE), and Individual Retirement Security Accounts (IKZE) on 25 April this year, aimed at improving the functioning of employee pension programmes. The package of changes includes facilitation measures for employers as well as solutions encouraging the establishment of new PPEs. As a rule, the new provisions will come into force on 1 July 2022. They include, among other things, amendments to certain participation conditions in PPEs and the removal of the so-called optional ban restricting additional contributions to the programme.

 

Key changes introduced by the amendment (according to information from prezydent.gov.pl)

Facilitations for employers in running PPEs are introduced by transferring administrative duties related to PPEs from employers to financial institutions managing PPEs, which have the necessary technical infrastructure and staff. This includes transferring the obligation to prepare the annual report on programme implementation, submitted each year to the supervisory authority, and the obligation to notify the supervisory authority of changes to the manager’s data;

The procedure for employers to submit agreements with employee representatives on suspending or reducing basic contributions to PPEs to the supervisory authority has been simplified. Instead of registering such agreements by administrative decision, employers will simply notify the authority of the agreement and submit a copy;

The optional ban on making additional contributions has been abolished, introducing full possibility to make additional contributions. Currently, additional contributions are possible unless the company agreement prohibits them;

It is now possible to make additional contributions from sources other than salary for periods when the participant did not receive salary from the employer. Additional contributions from non-salary sources will be paid by the participant into an additional account indicated by the employer, who will then transfer the contribution to the participant’s PPE account at an agreed time;

The supervisory powers of the Polish Financial Supervision Authority (KNF) have been further specified. Following the amendment, the authority may refuse registration of programme amendments or removal of the programme from the register due to, among other reasons, non-compliance with PPE legislation or failure to remedy irregularities within the deadline set by the authority;

A new solution called “transfer of funds” has been introduced. According to the Act, “transfer of funds” means transferring assets accumulated under the programme by the previous manager to a new manager in connection with a change of programme form or manager. The provisions regulate:

    a) transfer of funds in case of a change of programme form or manager,

    b) the deadline within which the transfer should take place;

Provisions governing suspension and reduction of the basic contribution have been modified. The changes include:

    a) setting a maximum unilateral reduction period by the employer (within a 12-month consecutive calendar period, the total unilateral reduction cannot exceed 6 months);

    b) explicitly stating that after suspension or temporary reduction of the basic contribution, the employer is not obliged to pay the contribution amount not paid due to suspension or reduction;

The Act’s provisions have been aligned with the current regulations of the Act of 18 November 2020 on Electronic Service (Journal of Laws, item 2320, as amended), regarding the handling of matters and preparation of documents using electronic systems, including updated terminology distinguishing “paper” and “electronic” forms.

• Facilitations regarding temporary suspension and reduction of the basic contribution for employers running PPEs.
• Introduction of a maximum unilateral reduction period of the basic contribution by the employer (within 12 consecutive calendar months, total reduction period cannot exceed 6 months). After suspension or reduction, the employer will not have to pay contributions that were not made due to the suspension or reduction.
• Reduction of the notice period from 12 to 3 months in case of unilateral employer decision to liquidate PPE.
• New provisions concerning individual retirement accounts (IKE) and individual retirement security accounts (IKZE), including allowing contracts to be concluded electronically.

Changes to the Acts on Individual Retirement Accounts and Individual Retirement Security Accounts will come into force 14 days after publication. Provisions concerning additional contributions will come into force at the start of 2023. The remaining provisions will apply from 1 July 2022.