These guidelines contain an interesting interpretation of the current laws governing investment relief. The most important issues addressed are as follows:
1. Clear instructions as to the intention of the legislator concerning para. 2.1.2 and 7.1.1 of the Council of Ministers' Decree regarding deductions of investment expenditure from income and reductions in income tax, which read as follows:
the taxpayer '...before carrying out each particular deduction, does not have any outstanding or required tax obligations owing to the State Budget, contributions to social security or contributions to the Labour Fund...'
taxpayers loose their right to reductions and deductions where '...for individual years there occur arrears in the payment of taxes which constitute income of the State Budget, contributions to social security or contributions to the Labour Fund exceeding, separately for each title, 0.5% of the payments made in those years...'
The intention of the above cited regulations is that only taxpayers who honestly and with due diligence carry out their fiscal obligations can apply the relief granted.
2. Tax offices have been instructed to take into account the honesty and promptness of the taxpayer in fulfilling his tax obligations, particularly when any overdue tax does not result from wilful action on the part of the taxpayer.
Further, the tax offices are encouraged to 'delay' the due date of the payment, and once payment of arrears has been effected, no further action in respect of depriving the taxpayer of the right to investment relief should be taken.
Payment of the arrears should take place within 14 days of the date the decision is received which:
a) defines the tax arrears, and possibly
b) delays the payment deadline depending upon the circumstances under which the arrears were discovered.
Furthermore, under certain conditions, up to 50% of penalty interest due on tax arrears may be remitted at the discretion of the tax office. Moreover, in clarification of para. 7.1.1 cited above; the tax office will no longer consider the 0.5% limit 'separately for each title', but as the joint sum of all taxes/contributions regardless of their fiscal title.
Tax laws and practise are constantly being revised and, whilst every effort is made to ensure that the information in this tax newsletter is accurate and timely, no decision should be taken on the basis of the information herein without first consulting with KPMG Polska.
Should you have any questions in relation to the above issues, please contact:
Oliver Sinton KPMG Polska LIM Center - Marriott Hotel - IX floor Al. Jerozolimskie 65/79 00-697 Warsaw, Poland Tel: +48 (22) 630 7236 Fax: +48 (22) 630 6355This information was correct as of 2 October 1996.