Maintaining financial flow in terms of tax liabilities
On 31 March 2020, the Sejm adopted the so-called “Anti-Crisis Shield“ Act together with secondary legislation.
Unfortunately, the Shield provisions regarding tax deferrals and other obligations arising from tax law are rather limited. In this difficult period, these obligations may prove to be crucial for the continuation of business activity. Therefore, please find below a summary of available options.
Tax deferment or tax debt redemption
- The Tax Ordinance allows for extension of the deadline for payment of tax and even of existing tax arrears (including interest);
- In justified cases, the tax authority may also redeem existing tax arrears (with interest);
- To benefit from the above, the Taxpayer must submit an application to the competent tax authority. The request must be duly justified by the important interest of the taxpayer or the public interest.
Payment in instalments
- Taxpayers may also apply for future tax liabilities or existing tax arrears (including interest) to be spread into instalments;
- Also in this case, the Taxpayer must submit an application to the competent tax authority, which must be justified by the important interest of the taxpayer or the public interest.
- The Shield provides for the possible exemption from the prolongation fee – in some cases.
Application for reduction of tax advances
- A taxpayer may apply for a temporary suspension of the obligation to pay tax advances;
- The application is not limited in time and not subject to a prolongation fee;
- The funds so released may be used to pay other current liabilities.
Importantly, Directors of Tax Administration Chambers (Izby Administracji Skarbowej) received guidelines for granting tax reliefs in situations where the coronavirus factors plays a role. The guidelines contain instructions on preferential treatment of businesses in certain sectors (e.g. transport, tourism, culture, catering, hairdressing and beauty services, sports, fitness, wellness centres). This means that applications for relief by companies from other sectors should be particularly well-justified.
Deferrals based on the Shield
- Extension of the deadline for payment of CIT and submission of CIT-8 returns until 31 May 2020 (for some taxpayers until 31 July 2020);
- Extension, until 1 June 2020, of the deadline for payment of PIT advances withheld by tax remitters from salaries for March and April 2020;
- Extension, until 20 July 2020, of the deadline for payment of the tax on revenue from buildings due for March-May 2020;
- Potential introduction of an exemption from or reduction of, property tax or extension of the deadline for payment of instalments of this tax by the Municipal Council (Rada Gminy).
Advocate, Partner, Head of Tax Practice
M: + 48 668 886 370