PIT and other opportunities for entrepreneurs related to this tax in the so-called anti-crisis package

The draft of the so-called anti-crisis package introduces several simplifications for entrepreneurs in terms of PIT payments.

But before I continue with their description, let me remind you of one important institution, which I have already described in the following article: http://kpr.pl/41,news/368,coronavirus-what-if-you-do-not-pay-vat-on-time-or-do-not-pay-the-collected-advance-on-pit-on-employee-remuneration.html.

The simplifications include the possibility of tax deferrals, instalments and possible redemption of tax arrears, including PIT, which – in my opinion – is currently one of the strongest institutions in terms of facilitating PIT payments for entrepreneurs.

PIT DEFERRAL OR SPLITTING PAYMENT INTO INSTALMENTS, REDEMPTION OF TAX ARREARS

The Tax Ordinance in Section 7a has long provided for the possibility of granting relief for the payment of tax liabilities. Pursuant to Article 67a of the Tax Ordinance, with regard to PIT (and other taxes as well), the following solutions are possible:

1. the date of tax payment can be postponed or the payment can be divided into instalments;
2. the payment of tax arrears can be postponed or also divided into instalments, together with interest on arrears or interest on outstanding tax advances (if we are already overdue);
3. tax arrears, interest on arrears or an extension fee can be cancelled entirely or partially.

Who is eligible for it?

Taxpayers. 

What should be done?

Entrepreneurs should submit a request to the competent tax authority together with a justification which will demonstrate that there is an important interest of the taxpayer or a public interest. I believe that COVID-19 and its negative economic effects are sufficient justification for this relief. There is, however, no single applicable template of the request; it must be written by entrepreneurs themselves.

Will I get a relief?

This is a discretionary decision of the competent authority. The request should therefore be well-founded.

As far as the so-called anti-crisis package is concerned, the following important provisions on PIT were introduced.

1. DEFERRAL OF THE DATE OF TRANSFERRING THE ADVANCES COLLECTED FOR EMPLOYEES

Who is entitled? 

Each entrepreneur who is obliged to charge and transfer advance payments for personal income tax on persons who receive income from, among others, the following:

1. from the labour-based relationship,
2. employment relationships,
3. home-based work,
4. cooperative employment relationship,

and who has suffered negative economic consequences because of COVID-19 .

Which advances?

Charged in March and April 2020.

How does this deferral work?

The transfer of advance payments to the Tax Office may take place by 1 June 2020.

2. ONE-OFF REDUCTION IN INCOME OR INCOME EARNED IN 2019

Who is eligible for it?

Taxpayers who, because of COVID-19, met all of the following criteria:

1. suffered a loss from a non-agricultural economic activity in 2020;
2. in 2020 obtained at least 50% lower total revenues from non-agricultural business activity than total revenues obtained in 2019 from this activity.

On what terms?

Taxpayers may once reduce by the amount of the loss described above, but not more than by the amount of PLN 5,000,000, respectively the income or revenue obtained in 2019 from non-agricultural business activity.

What do you have to do? 

File a correction of the income statement for 2019.

3. DEDUCTION OF CERTAIN DONATIONS FROM THE TAXABLE INCOME OF UP TO 200%

Who is eligible for it? 

If the taxpayer makes a donation to the following:

1. entities carrying out medical activities, included in the list referred to in Article 7 of the COVID-19 Act;
2. the Material Reserves Agency for the purpose of carrying out statutory tasks;
3. Central Depot of Sanitary and Anti-epidemic Reserves for the purpose of carrying out statutory activities.

On what terms?

The taxpayer may deduct the above donations from the taxable income in the following amounts:

1. 200% if it was donated by 30 April 2020;
2. 150% if it was donated in May 2020;
3. 100% if it was donated from 1 June 2020 to 30 September 2020.

SMALL BUSINESS TAXPAYERS 

Small business taxpayers, who for 2020 have opted for a simplified form of advance payment, may opt out of this form of payment during the tax year for the months March–December 2020 if they suffer negative economic consequences due to COVID-19

These are not all changes regarding PIT. However, the remaining few changes pertain to very specific type of business, so I took the liberty to omit them.

I hope that this short guide will be useful to you or your business in these difficult times.

Beata Bieniek-Wiera, attorney-at-law