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Newsletter No. 10/2019

29.10.2019

Central Register of Real Beneficiaries not accessible to foreigners

On October 13 this year, the Central Registry of Real Beneficiaries was created, which we wrote about in more detail in our legal alert. During the register’s first days of operation, several problems came to light that may be troublesome for foreigners.

First of all, according to the current wording of the provisions, only persons authorised to represent a company can submit data to the register. Submitting data is not a legal act that can be performed through a representative. It should be remembered, however, that there was a similar case regarding submitting financial statements to the Financial Documents Repository, and after some time the legislator allowed notifications to be submitted by the proxies of companies.

Secondly, persons authorised to represent a company who do not have a PESEL number or who have an electronic signature in which the PESEL number does not appear cannot currently submit data to the register. This is because submissions are made via ePUAP, which requires a PESEL number to work properly.

It should also be remembered that the register is only available in Polish, which is another obstacle for foreigners when navigating a complicated form.

We have sent an inquiry to the Ministry of Finance on how foreigners are to deal with these problems, but so far we have not received an answer.

ECOVIS expert comments on more favourable tax rates for employees from outside the European Union

In the penultimate issue this year of the quarterly ‘Transport Manager’ Patrycja Ignaszak, an expert from our office, spoke about how foreigners employed in Poland can obtain a more favourable tax rate in connection with the change in the PIT rate.

In order to take advantage of this change, foreigners employed in Poland must submit a declaration about whether or not they are a Polish tax resident pursuant to the PIT Act due to “having a centre of personal or economic interest in Poland” or “actually staying on Polish territory for more than 183 days in a tax year”. The procedure for submitting declarations by employees replaced the need to obtain a residence certificate, which was a much more complicated process. The director of the National Revenue Administration emphasised that the conjunction “or” means that a Polish tax resident is a person who meets at least one of these conditions.

According to the Tax Chamber, the “centre of personal […] interests” should be understood as all family ties, such as home or social activity, while the “centre of […] economic interests” is primarily a place of business or a source of income.

In addition, an employee should should provide the employer with data enabling verification of their status. Otherwise, an employer should treat the employer as a non-tax resident of Poland and calculate income tax at a flat rate of 20%.

Changes in transport

At the end of this year, together with the mobility package, the EU Delegation Directive will come into force, which will be important for the transport industry. Under the new regulations, drivers will have to be paid according to the rules that apply in the country of loading or unloading.

Experts predict that in practice the directive means an increase in the wages of Polish drivers by up to 50-60%, because it seeks to equalise earnings in the European Union. The new regulations will prohibit lump-sums and per diems to be included in the basic salary, but they will not exempt businesses from paying allowances and per diems that occur in connection with business trips under applicable labour regulations in Poland.

Polish transport organisations are afraid that these changes will mean that not only small but also larger transport companies will go out of business as they will not be able to afford the higher costs due to the low profitability of the sector. That is why they are demanding that the burden of new regulations be distributed evenly to both businesses and drivers.

Loans of spouses can be tax deductible

Tax offices are issuing individual interpretations favourable to entrepreneurs regarding the accounting of loans in which interest on loans taken out by the spouse of an entrepreneur can be counted as a company cost if they have joint marital property, if the amount received is used for the entrepreneur’s business.

Regulations do not make including loan interest in costs dependent on the classification, type or name of the loan. This is also not determined the content of the loan agreement with the bank. Therefore, if there is joint marital property between the spouses, it does not matter from whose bank account interest is repaid, even if the loan was taken for consumer purposes.

This means that entrepreneurs who are not creditworthy can ask their spouses for help finance their business, and then include the proportionate value of interest in tax costs.

Application of Art. 108 of the Civil Code to the operation of corporate bodies

One of the most interesting and contentious issues in the area of commercial law is the issue of actions taken by two companies that are represented by someone sitting on the management board of both companies. Such activities may result in a conflict of interests between companies.

In a recent ruling, the Supreme Court considered such a case. In its judgment, it ruled that in some cases of actions taken by a corporate body it is possible to apply, by analogy, art. 108 of the Civil Code. This article provides that a representative may not be the other party to a legal act which it performs on behalf of its principal.

If there is a situation in which a member of the management board of company A is also a member of the management board of company B and is authorised to represent both companies independently, then if such a person performs a legal action “with himself”, he should ensure that the condition allowing for such action is met, i.e. that due to the content of the legal action, the possibility of violating the principal’s interests is excluded.

Due to the fact that the application of art. 108 of the Civil Code by analogy aims to eliminate the potential conflict of interests of both companies, the Supreme Court underlined that this should always be done carefully so as not to cause damage to their interests.

Bank transfers can be proof of purchase

In a recent individual interpretation issued by the director of the National Revenue Information System, the issue of presenting a bank transfer as proof of purchase was raised in the situation when a business’s supplier is in a third country, and therefore cannot receive a VAT invoice from the business.

The tax authority confirmed that when taxing on general terms, a list of bank transfers to a supplier can be considered as an accounting document confirming the costs incurred by the business. This is because the lack of the required form does not automatically mean that expenses cannot be considered as tax deductible costs within the meaning of the PIT Act. The most important is the cause-and-effect relationship, because the legislator links the costs of obtaining revenues to the reason for incurring them, i.e. obtaining, securing or maintaining the source of revenues.

The director of the National Revenue Information System emphasised that it is the taxpayer who is required to demonstrate the relationship between the costs incurred and the business activity, and that their incurrence has an impact on the amount of revenues generated. It also added that it cannot be clearly stated what is a sufficient document to include expenses in tax costs. Therefore, the final assessment belongs to the relevant tax authorities.

The EU Council adopts the whistleblower directive

On October 7 this year, the EU Council adopted a new directive aimed at effectively protecting whistleblowers. Within 2 years of its publication in the Official Journal of the European Union, Poland will have to implement the relevant provisions, and Polish companies will have to prepare properly for them.

The new regulations provide for a secure way to report violations of law. Harassment of whistleblowers is to be punished, and in the event of an accusation of harassment the harasser must prove that they are innocent of the charge. In addition, if a whistleblower is dismissed from work or feels victimised due to reporting violations, they will be able to seek compensation.

The directive is intended to cover both public entities and private businesses that employ at least 50 employees or operate in sectors subject to specific regulations, irrespective of the number of employees.

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