Tax consequences of canceling the state of the epidemic

Income from buildings

Pursuant to Article 38ha of the CIT Act (Article 52pa of the PIT Act), income taxable under Article 24b of the CIT Act (Article 30g of the PIT Act) is exempt from tax on revenues from buildings (Article 30g of the PIT Act), determined for the period from March 1, 2020 to the end of the month in which the epidemic was called off. As a consequence, CIT / PIT taxpayers obliged to calculate and pay tax on revenues from buildings must, from June 1, 2022, settle the tax on revenues from buildings.

One-time depreciation

Pursuant to Article 38k of the CIT Act (Article 52s of the PIT Act), taxpayers may make one-off depreciation write-offs from the initial value of fixed assets that were acquired for the production of goods related to counteracting Covid-19 and entered into the register of fixed assets and intangible and legal assets in the period from 2020 to the end of the month in which the state of the epidemic declared due to Covid-19 was canceled. As a result, CIT / PIT taxpayers can only make a one-off depreciation of fixed assets that have been acquired for the production of goods related to counteracting Covid-19 only until the end of May 2022 (this includes, in particular, goods such as: protective masks, respirators, disinfectants, medical protective clothing, shoe covers, gloves, glasses, goggles, hand disinfectants and hand hygiene products).

Donations of computer hardware

Pursuant to Article 38p of the CIT Act (Article 52x of the PIT Act), from the tax calculation basis, in order to calculate the tax or advance payment, the taxpayer could deduct in-kind donations (in the amount of 200% / 150% / 100%), the subject of which were laptops or tablets handed over from January 1, 2020 until the end of the month in which the Covid-19 outbreak was recalled to educational authorities. Thus, from June 1, 2022, CIT / PIT taxpayers will not be able to deduct from their income donations of computer equipment transferred to educational institutions.

Donations for counteracting Covid-19

According to Article 38g of the CIT Act (Article 52n of the PIT Act), from the tax calculation basis, in order to calculate the tax or advance payment, the taxpayer could deduct (in the amount of 200% / 150% / 100%) donations to counteract Covid- 19 submitted from January 1, 2020 to the end of the month in which the state of the epidemic declared due to Covid-19 was canceled, to entities performing medical activities, the Government Strategic Reserves Agency, the Central Base of Sanitary and Anti-Epidemic Reserves, homes for mothers with minor children and women in pregnancy, night shelters, shelters for the homeless or the Covid-19 Countermeasure Fund. Thus, from June 1, 2022, CIT / PIT taxpayers will not be able to deduct donations for counteracting Covid-19 from their income.

IP BOX

Pursuant to Article 38m of the CIT Act, taxpayers earning qualified income from qualified intellectual property rights in a tax year (but no later than the month in which the state of the epidemic declared for Covid-19 was canceled), which are used to counteract Covid-19, could use a 5% tax rate to tax this income during the tax year when calculating income tax advances. And PIT taxpayers, in accordance with Article 52u of the PIT Act, have the right to apply a 5% tax rate until the end of the tax year in which the epidemic state announced due to Covid-19 was canceled. Therefore, the changes will affect CIT taxpayers from June 1, 2022, and PIT taxpayers from January 1, 2023.

R&D relief

Pursuant to Article 38l of the CIT Act, a CIT taxpayer could deduct eligible costs incurred for research and development activities aimed at developing products necessary to counteract COVID-19 from the income on which the advance is calculated. However, this deduction was possible no later than the month in which the state of the epidemic declared for Covid-19 was canceled. This means that taxpayers will be able to deduct such eligible costs for the last time in the CIT advance payment for May 2022. As for PIT taxpayers, pursuant to Article 52t of the PIT Act, a PIT taxpayer may deduct eligible costs incurred on R&D activities aimed at developing the products necessary to counteract Covid-19 by the end of the fiscal year in which the Covid-19 epidemic was canceled, i.e. by the end of 2022.

Bad debt relief

Facilitating bad debt relief introduced for taxpayers suffering negative economic consequences due to the Covid-19 epidemic, the so-called Anti-crisis Shield 4.0. (i.e. added Article 52w of the PIT Act and Article 38o of the CIT Act), shortening the deadline from 90 to 30 days allowing creditors to take advantage of the bad debt relief, will apply until the end of the year in which the epidemic state was announced due to Covid -19, so CIT and PIT taxpayers can use this facility until the end of 2022. The bad debt relief facility, from the perspective of debtors suffering negative economic consequences due to the Covid-19 epidemic (and thus the rule provided for in Article 52w of the PIT Act and Article 38i of the CIT Act, according to which debtors do not have to increase their tax income after 90 days by the amount not paid to the creditor in the tax year), will also apply until the end of the year in which the state of the epidemic was declared due to Covid-19, i.e. the end of 2022.

Certificates of Residence

Changing the state of an epidemic to an epidemic emergency will not affect the facilities provided for in the certificate of residence (these facilities are also to apply during an epidemic emergency).  Consequently, pursuant to Art. 31ya of the so-called Anti-Crisis Shield 1.0. during the period of the epidemic threat, as well as during the next 2 months after its cancellation, the place of residence and registered office of the taxpayer for tax purposes may be confirmed with a copy of the certificate of residence, if the information resulting from the submitted copy of the certificate of residence does not raise reasonable doubts as to compliance with the actual state.

White list of VAT payers

Changing the state of the epidemic into an epidemic threat will also have no effect on the deadline for notifying about the payment of amounts due to a bank account outside the so-called white list of VAT taxpayers, extended from 7 days to 14 days from the date of ordering the transfer. The extended,14-day period, pursuant to Article 15zzn of the so-called Anti-Crisis Shield 1.0, will also apply throughout the entire period of the epidemic threat.

MDR reporting

The suspension of the deadlines for reporting the so-called MDR national schemes for the duration of the epidemic emergency introduced by Article 31y of the so-called anti-crisis shield 1.0 will also apply during the epidemic emergency, as a consequence, the reporting dates for national schemes will start only after the date of recalling the epidemic emergency.

Applications for tax interpretations

Unfortunately, the change of the epidemic status into an epidemic threat will not translate into faster deadlines for considering applications for individual interpretations. The periods for examining requests for individual interpretations from 3 months to 6 months, extended by the provisions of Article 31g of the so-called Anti-Crisis Shield 1.0, will also apply in the period of an epidemic threat.