The organization submitted to the Ministry of Finance a position on the planned tax changes as part of the Polish system.
According to the PZFD, the proposed date for the new regulations to go into effect (January 1, 2022) is too short, considering the complexity of the changes introduced. Even with the explicit pace of passing regulations, taxpayers will not be able to prepare for changes or adapt accounting systems – the union notes and assumes that the entry into force of tax changes should be delayed until at least January 1, 2023.
The PZFD is also negatively evaluating the impacts of the proposed solutions in relation to the development industry, particularly the private rental sector (PRS).
“The PZFD in a letter to the Ministry referred primarily to the problem of depreciation in real estate companies. It is related to commercial rental properties and investment properties. Either way, these are long-term projects and expensive, rate of return that are calculated on a multi-year basis. PZFD does not have any There is no doubt that the implementation of the proposed regulations will shake the commercial and investment real estate market, since the reduction in tax depreciation is not included in the investment plans ”- emphasized PZFD lawyer Sebastian Juszczak.
In his opinion, the proposed change will affect, to the maximum extent, the entities that consume buildings and apartment buildings. The project provides for the exclusion of tax costs for depreciation write-offs for buildings and apartment buildings, both on the basis of personal income tax and CIT. The association notes that expenses incurred to purchase buildings and apartment buildings will constitute a tax-deductible cost only at the time of their sale (as in the case of real estate properties).
PZFD counsel noted that the proposed change would not only apply to the “Kwalski average”, but would also have a strong impact on the PRSP sector. “In the PRS segment, the goal is to build a residential investment and then rent it out. Since PRS projects are not for sale to end customers – so it will be difficult to depreciate customers,” he assessed.
As part of the Polish system, changes must also be made to taxes on income earned from rent or rent. According to the PZFD, the regulation deprives the taxpayer of prior freedom to decide on the most advantageous method of taxation in a particular case, that is, it forbids the settlement of revenue generated, among other things, from rent and lease within the tax ladder in favor of the settlement of the lump sum.
“In practice, the taxpayers who thought about the renovation of the rental premises were most often chosen to settle the tax scale, and the settlement in this way made it possible to operationalize expenditures for this purpose by means of taxes. The proposed regulation may have a negative effect on the condition of the premises subject to the lease ”- he believes Juszczak.
The ministry also plans to introduce regulations that limit the generation of artificial tax deduction costs in the form of the payment of so-called “hidden profits”. Distributions to the shareholder or related party that are created artificially and may be considered as hidden earnings will not be deducted for tax purposes.
In the view of the relationship, this solution gives illegitimate power to the tax authorities, who may seek “hidden profits” payments in real transactions.
In the position presented to the Ministry, the organization also emphasized that the proposed requirements for the Polish VAT group in terms of financial relations were too restrictive. She suggested the introduction of a clause providing for an economic link in the VAT group if the entities were operating in the same industry or in the same market for a particular product.
On Monday, public consultations on tax regulations as part of the Polish deal ended. The tax package consists of three areas: tax reform providing for an increase in the tax-exempt amount and other related solutions, changes to health insurance adjustment and simplified tax forms; Business-targeted tax solutions and incentives package and tax system stamp package.
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