Dear Sirs,

We hereby present to you a summary of the most important changes that came into force as a result of the amendment of the Act on Employee Equity Plans. A significant part of the changes already came into force on 4 June 2022.

We encourage you to contact us to discuss the detailed impact of these changes on the tax settlements of your companies.

Changes in Employee Capital Plans

1. Extension of the definition of employing entity
2. Deadline for concluding agreements on PPK
3. Rules for concluding agreements on PPK for employees 55+
4. Deadline for a new employee to submit a declaration on concluded agreements on running PPK
5. Applications for transfer payment – information on deadlines
6. Funding of additional payment – deadline for first declaration of participant
7. Deadline for calculating, collecting and making the first payment to a new PPK participant.
8. Obligation to inform the employing entity about making a withdrawal, transfer payment or return of funds accumulated on the PPK account
9. Return of undue payments
10. Obligation to inform the employing entity and the PFR about the commencement of a withdrawal after age 60 and a withdrawal in the form of a marital benefit in order to cease making payments to a PPK participant
11. Extension of the scope of powers of the State Labour Inspectorate

1. Extension of the definition of the employing entity

The amendment to the Act on PPK assumes extension of the definition of the employing entity also to the payer of social insurance contributions in the case of employers or ordering parties without an identification number (NIP or REGON). It is the payer that will also bear all the obligations of the employing entity arising from the Act on PPK, for instance those connected with launching the program. The new regulations will affect persons employed by foreign employers who have taken over the obligations arising from the Act on Social Insurance System.

2. Deadline for concluding agreements on PPK

According to the new regulations, an agreement on running PPK will be able to be concluded no earlier than after 14 days of employment and no later than on the 10th day of the month following the month in which 3 months of employment have elapsed. This change will enable employing entities to conclude an agreement on running PPK for an employed person earlier. At the same time, the maximum deadline for concluding such an agreement remained unchanged.

3. Rules for concluding agreements on running PPK for employees 55+

The new regulations have removed the obligation for an employer to examine the period of employment of an employee 55+ in the employing entity in the last 12 months for the purpose of verifying entitlement to conclude an agreement on running PPK. However, the employer will still be required to conclude an agreement to operate the PPK upon the request of the employee 55+.

4. Deadline for a new employee to submit a statement on concluded agreements on running PPK

The deadline for an employee to submit a statement on the concluded agreements on running PPK has been changed. Before the changes, a new employee was obliged to submit a statement about concluded agreements on running PPK within 7 days, after the 10th day of the month following the month in which the period of 3 months of employment expired. According to the new regulations, the deadline is 7 days from the date of concluding the agreement on running PPK without taking into account the other conditions.

5. Transfer payment requests – information on deadlines

An employing entity to which a statement on concluded agreements on running the PPK has been submitted is obliged to inform a PPK participant of the obligation to submit a transfer payment application on his/her behalf immediately after concluding an agreement on running the PPK for and on behalf of the PPK participant. However, after the amendment of the regulations, the employing entity will be obliged to inform, immediately upon receipt of a declaration from a PPK participant, of the obligation to request a transfer payment.

6. Financing of the additional payment – the term of validity of the first declaration of the participant

The new regulations have introduced a deadline for the validity of the taxpayer’s first declaration in respect of the additional payment. The previous lack of regulation in this respect has been replaced by a provision according to which the additional payment, in the amount declared by the PPK participant, is effective from the month following the month in which the PPK participant submitted the additional payment declaration to the employer.

7. Deadline for calculating, collecting and making the first payments to a new PPK participant

Under the previous rules, the first payments were transferred to a financial institution, starting from the month following the month in which the legal relationship arising from the PPK agreement arose. The new regulations introduce regulations according to which:

• the first payments are calculated and collected from the remuneration paid to the PPK participant after the legal relationship arising from the PPK agreement comes into being, and
  
• the first payments shall be transferred to a financial institution within the 15th day of the month following the month in which they were calculated and collected.

8. Obligation to inform the employing entity about making a withdrawal, transfer payment or return of funds accumulated on the PPK account

The previous rules on mandatory notification to the employing entity of a withdrawal, transfer payment or return of funds accumulated in a PPK account have been repealed. According to the current state of the law, financial institutions are no longer under this obligation. The purpose of these changes is to reduce the information obligations imposed on financial institutions.

9. Return of undue payments

Pursuant to the amendment, payments to PPK, which prove to be undue in whole or in part, shall be returned to the entity financing a given payment. Until now, the Act on PPK lacked detailed regulations in this respect. Where a financial institution returns an undue payment in the part financed by a PPK participant to the employer’s bank account, the employer shall be obliged to transfer this amount to the PPK participant immediately, no later than within 5 working days, counting from the day of receiving this amount.

10. Obligation to inform the employing entity and the PFR about the commencement of payments after age 60 and payments in the form of a marital benefit in order to cease making payments to the PPK participant

Another novelty is the obligation of the financial institution to inform the employing entity and the PFR about the commencement of payments after age 60 and payments in the form of a spousal benefit. The PFR shall inform other financial institutions of the commencement of withdrawals from the PPK account of the PPK participant for whom these institutions maintain PPK accounts. Other financial institutions, upon receiving the aforementioned information from PFR, shall inform the employing entities with which they have entered into agreements on management of PPK about the commencement of disbursements to a given PPK participant. Upon receipt of the information on the commencement of disbursements, the employing entity shall not calculate, collect or make payments to the PPK.

11. Extension of the scope of authority of the State Labour Inspectorate

The State Labour Inspectorate has been given powers to prosecute offences of inducing employed persons to resign from saving in the PPK.