Tax exemptions, reliefs and preferences – support for Ukraine and Ukrainian citizens
#1
Which tax preferences will be used for humanitarian aid received by Ukrainian citizens?
Pursuant to the Special Law of 12 March 2022 on assistance to Ukrainian citizens in connection with the armed conflict in the territory of Ukraine (“Special Law”), PIT exemption will apply to humanitarian aid received by Ukrainian citizens entering the territory
of Poland directly from Ukraine between 24 February 2022 and 31 December 2022 as a result of military operations in that country.
According to the Special Law, however, humanitarian aid received by Ukrainian citizens will not be subject to additional exemption from inheritance and gift tax.
#2
Will the special cash benefit granted to cover costs of accommodation and board of Ukrainian citizens constitute PIT or CIT taxable revenue?
According to the Special Law, the cash benefit received by an entity providing accommodation and board to Ukrainian citizens will be both CIT- and PIT-exempt.
Such benefit will be granted based on an agreement concluded with the relevant municipality for a maximum period of 60 days; the period may be extended in particularly justified cases.
#3
Will (natural or legal) persons making donations destined for Ukrainian citizens be entitled to apply any PIT or CIT preferences?
According to the Special Law, taxable persons donating items or rights for purposes related to counteracting the effects of hostilities in Ukraine will be able to recognise costs of production or acquisition thereof as tax deductibles when donated to entities listed in the Special Law, including:
- Public benefit organisations (including Ukrainian)
- Local government units
- The Government Agency for Strategic Reserves
- Institutions providing medical or emergency rescue services in the territory of Poland or Ukraine
An additional condition for classifying such expenses as tax deductibles will be the fact that these were not previously classified as tax deductibles (including through depreciation write-offs).
Analogous rules will apply to costs incurred for non-paid benefits.
The proposed regulations will apply if the donation is made and the non-paidservice is provided between 24 February 2022 and 31 December 2022.
#4
Will donations/non-paid benefits received for purposes related to counteracting the effects of hostilities in Ukraine constitute PIT or CIT taxable revenue?
The Special Law provides for the exclusion from revenue of the value of donations and non-paid benefits received between 24 February 2022 and 31December 2022 only by:
- Public benefit organisations (including Ukrainian)
- Local government units
- The Government Agency for Strategic Reserves
- Institutions providing medical or emergency rescue services in the territory of Poland or Ukraine.
#5
Will CIT taxable persons be able to benefit from additional tax preferences in connection with donations for purposes related to counteracting the effects of hostilities in Ukraine?
The Special Law provides for such preferences to calculate the loss and the share of income in revenue that may be subject to minimum CIT.
Such calculation will not include the production costs or the acquisition price of items or rights that are subject to donations made between 24 February2022 and 31 December 2022 for purposes related to counteracting the effects of hostilities in Ukraine.
#6
Will the provision of goods or services free of charge for the purposes ofassistance to victims of warfare be subject to any VAT preference?
According to the Regulation of the Minister of Finance of 3 March 2022amending the Regulation on goods and services subject to reduced goods and services tax rates, and the conditions for the application of reduced tax rates(“VAT Regulation”), the non-paid supply of goods or provision of services for the purposes of assistance to victims of warfare in Ukraine will be subject to a reduced VAT rate, provided that the specific supply is made to:
- The Agency for Strategic Reserves;
- Medical institutions;
- Local government units
0% VAT will apply if a written agreement is concluded between a taxable person and one of the above entities, indicating that the donated goods or services are provided as assistance to victims of the Russian aggression against Ukraine.
0% VAT will apply to services provided between 24 February 2022 and 4 March 2022.Please note the term of this preference is shorter compared to preferences provided for in the Special Law.
#7
Will business owners planning to make donations directly to Ukrainian citizens –disregarding public benefit organisations, local government units, the Government Agency for Strategic Reserves and institutions providing medical/emergency rescue services – be able to recognise expenditure on humanitarian aid as tax deductibles?
Companies may consider recognising expenditure on such humanitarian aid as tax deductibles under their CSR policy.
#8
Should business owners issue a PIT-11 form in connection with aid provided to Ukrainian citizens?
It may be necessary in some cases to issue a PIT-11 form.
