Anti-crisis Shield 4.0 – bad debt relief and the so-called minimum income tax

On June 24, 2020, the so-called anti-crisis Shield 4.0 regulations entered into force introducing to the acts on income taxes i.a. an episodic exemption from the tax on revenues from buildings and shortening the period after which a taxpayer is entitled to take advantage of the so-called bad debt relief.

Exemption from tax on revenues from buildings

New regulations introduced an episodic exemption from tax on revenues from buildings established for the period from 1 March 2020 to 31 December 2020.

According to the regulations in force, taxpayers are obliged to pay income tax on revenues from buildings which:

  • constitute ownership or co-ownership of a taxpayer,
  • have been given for use in whole or in part under a lease, tenancy or another contract of a similar nature,
  • are located in the territory of the Republic of Poland,
  • are assets connected with economic activity – in case of PIT taxpayers.

The above solution shall apply to all taxpayers of this tax as these regulations do not introduce any additional restrictions (conditions). What is important, taxpayers may also obtain a refund of tax they have already paid.

Bad debts relief

For taxpayers suffering negative economic consequences due to the COVID-19 outbreak, a possibility has been introduced to reduce the income constituting the basis for calculating the tax advance payment by the value of the receivable debts, included in receivable revenues, said value not having been paid or transferred, with the proviso that the reduction shall be made starting from the settlement period in which 30 days elapsed from the day of expiry of the time limit for the payment prescribed in the invoice (bill) or in a contract to the period in which the receivable debt was paid or transferred.

This possibility is also provided for taxpayers who have chosen a simplified form of advance payment for 2020. The advance due may be reduced by:

  •  9% of the value of receivable debts – in the case of a small taxpayer or
  • 19% of the value of receivable debts – in the case of other taxpayers.

It is worth noting that the Polish regulations do not explain the concept of negative economic consequences due to the COVID-19 outbreak. It seems difficult to define this term considering, for example, the diversification of the actual situations and sectors in which taxpayers operate and the applicable economic factors. As examples of circumstances that may be taken into account are: a decrease or lack of revenues, an increase in costs, non-receipt of payments due, and the inability to settle liabilities due to COVID-19.

If you are interested in using solutions implemented by Anti-crisis Shield, please contact us.

We will analyze the options that are available for you, indicate the detailed conditions that you need to meet in order to take advantage of the solution and help you to fill in and submit respective applications.

Our experts stay at your disposal:

Łukasz Bączyk
Head of Tax, Board Member

Jarosław Szajkowski
Tax Manager – Tax Adviser

Marta Skrodzka
Tax Manager – Tax Adviser

Piotr Szeliga
Tax Manager – Tax Adviser

Paweł Jóźwik
Tax Manager – Attorney-at-law

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