- SAC held that remission of shares without consideration constitutes a controlled transaction
- Crucial judgment of the CJEU – management board members’ liability
- The issue of TCLT taxation of a loan agreement – a thing or a property right?
- Withholding tax (WHT) and the concept of industrial equipment – an unfavourable position of the SAC
- New rules for vehicle excise duties from 1st April 2025
- Deregulation Act – what changes will it bring?
- Safety relief – what does it apply to and will it be introduced?
SAC held that remission of shares without consideration constitutes a controlled transaction
In a judgement of 6 March 2025 (ref. II FSK 772/22), the Supreme Administrative Court (hereinafter: “SAC”) ruled that the remission of shares, whether voluntary or compulsory, may be considered a controlled transaction for TP purposes.
The case concerned a company that made a voluntary remission of shares of a shareholder without consideration. It applied to the Director of the National Tax Information System (hereinafter: “NTIS”) for an individual interpretation to confirm the position as to whether such an activity constitutes a controlled transaction on transfer pricing grounds. In her opinion, the transaction does not meet this definition on the grounds of the CIT Act, as its terms and conditions were not established and the redemption itself does not give rise to any income or tax cost on her part.
NTIS disagreed with the company’s position. It took the view that the remission of shares, regardless of its nature (voluntary or compulsory), would fall within the concept of a “transaction” and should be subject to tax documentation, once the prerequisites of the CIT Act are met. The applicant appealed against the unfavourable interpretation to the Voivodship Administrative Court (hereinafter: “VAC”) in Bydgoszcz, which, in its judgment of 22 March 2022 (ref. I SA/Bd 30/22), repealed the appealed individual interpretation. The VAC indicated that the remission of shares is not a controlled transaction and the transfer pricing regulations do not apply to the voluntary remission of shares without remuneration. The verdict of the VAC in Bydgoszcz was appealed against to the SAC by the tax authority and the Cassation Court, in its verdict of 6 March 2025 (case ref. II FSK 772/22), reversed the verdict of the WSA in Bydgoszcz, favourable for the applicant, sharing the position of the tax authority.
The SAC emphasised that the remission of shares should be regarded as an economic transaction. If there is a relationship between the company and the shareholder, it may be considered a controlled transaction. With such redemption, therefore, transfer pricing documentation obligations should be borne in mind.
If you have any doubts regarding the topic of transfer pricing or any restructurings carried out/planned within the capital group – it is worth contacting our experts at Nexia Advicero.
Crucial judgment of the CJEU – management board members’ liability
The Court of Justice of the European Union (hereinafter: “CJEU”), in its judgment of 27th February 2025 in Case C-277/24 (Adjak), addressed the liability of third parties for tax liabilities.
The preliminary question was referred by the Voivodeship Administative Court in Wrocław by decision (ref. I SA Wr 4/23) of 25th January 2024. The essence of the question was whether, in terms of VAT, a national solution which does not grant party status to a management board member of such a company in the case of proceedings concerning the determination of the amount of a company’s tax liabilities is consistent with EU law.
In its judgment of 27th February 2025, the CJEU ruled that this does not prevent that third party, in the course of any proceedings against it for joint and several liability, from being able effectively to challenge the factual findings and legal qualifications made by the tax authority in the first proceedings and to have access to its file, while respecting the rights of the said legal person or other third parties.
This judgment is particularly important as it may constitute a basis for the resumption of completed proceedings concerning such VAT cases:
- in the case of tax proceedings which have been concluded by a final decision – within 1 month from the publication of the operative part of the judgment of the Court of Justice of the European Union in the Official Journal of the European Union;
- for administrative court proceedings – within 3 months of the publication.
The operative part of the judgment has not yet been published in the Official Journal of the EU; it is important to note that the above deadlines are calculated from this date.
It is worth analysing the board of directors held liable, to see whether this judgment, will not have the impact of challenging this liability – we will be happy to support you in such an analysis, as well as in the process of drafting and filing an appropriate application for resumption of proceedings.
The issue of TCLT taxation of a loan agreement – a thing or a property right?
In a judgment of 12th March 2025 (ref. III FSK 1670/23), the Supreme Administrative Court (hereinafter: “SAC”) ruled that a loan transferred in the form of a transfer is also subject to tax on civil law transactions (hereinafter: “TCLT”).
The case concerned a Polish subsidiary that granted a loan to a German company. The loan was transferred from a Polish bank account to the German company’s bank account. The German company requested a tax ruling on whether a loan agreement, the subject of which was a transfer of funds in kind from the lender located in the Republic of Poland to an account located in Germany, was an activity subject to the TCLT.
According to the Polish company, the loan agreement constitutes a property right exercised in the territory of Germany which is not be subject to TCLT in Poland. In a tax ruling dated 17th October 2022 (mark: 0111-KDIB2-3.4014.399.2022.1.MD), Director of National Tax Information (hereinafter: ”DNTI”) considered the applicant’s position to be incorrect. The DNTI pointed out that, despite the specific characteristics of cashless money, it should be considered as an object which, at the time of its transfer, is located on the territory of the Republic of Poland and, as such, is subject to the TCLT.
The German company challenged the unfavourable tax ruling before the Voivodeship Administrative Court in Gliwice (“VAC”). The VAC in Gliwice, in its judgment of 26th July 2002 (ref. I SA/Gl 1698/22), dismissed the appeal and agreed with the DNTI’s arguments. It stated that Article 1(4)(1) of the Act on Tax on Civil Law Transactions (hereinafter: “the TCLT Act”) applied to the transaction and emphasised that, despite the fact that the money was transferred by means of a transfer, it still had the status of an object for the purposes of the TCLT.
A German company appealed against the decision of the VAC in Gliwice to the SAC, which in its decision of 12th March 2025 (ref. III FSK 1670/23) dismissed the appeal in cassation.The SAC agreed with the judgment of the first instance, pointing out that money, when concluding a loan agreement, may be transferred in various forms, not only in cash, but also in the form of a transfer. This does not affect the taxation of the loan agreement with TCLT, the tax obligation arises at the moment of making a civil law transaction – according to art. 3 section 1 item. 1 of the TCLT Act.
The granting of loans is a very common practice in the activity of companies, which has tax consequences for both the lender and the borrower. It is therefore worth analysing these consequences – in case of doubt, do not hesitate to contact the experts at Nexia Advicero, who have extensive experience in the field of TCLT.
Withholding tax (WHT) and the concept of industrial equipment – an unfavourable position of the SAC
The Supreme Administrative Court (hereinafter: ”SAC”), in a judgment of 4th March 2025 (ref. II FSK 742/22), recognised social containers for employees leased from abroad as facilities falling within the catalogue of industrial equipment.
The case concerned a company that applied for a tax ruling on the recognition of a set of containers leased from a contractor as industrial equipment under Article 21(1) of the CIT Act. In the event that this facility is deemed to be an industrial equipment, the company, would be obliged to collect flat-rate income tax (hereinafter: ‘WHT’) when paying the Contractor the remuneration for it. The Director of National Tax Information (hereinafter: ‘DNTI’) adopted a broad understanding of the term ‘industrial equipment’ and indicated that the facility fell within the scope of such equipment. It emphasised that this includes any industrial creation.
The company appealed against this tax ruling to the Voivodeship Administrative Court (hereinafter: ”VAC”) in Gorzów Wielkopolski. In a judgment of 24th March 2022 (ref. I SA/Go 436/21), the VAC overturned the individual ruling and agreed with the company’s position. It indicated in the justification that the containers, which are the subject of the lease agreement and are intended for social purposes, are not industrial equipment, as they only fulfil auxiliary functions and are not functionally used in the production process.
DNTI filed a cassation appeal against this judgment with the SAC, which in its judgment of 4th March 2025 (ref. II FSK 742/22) overturned the judgment of the VAC. The SAC shared the broad understanding of the concept of industrial equipment presented by DNTI. It also referred in its reasoning to Article 5 of the OECD Model Convention, where the issue of such containers was addressed. By considering such containers as industrial equipment, the SAC shared the interpretation of the legislation, which is unfavourable to taxpayers, that industrial equipment on WHT grounds can be any industrial creation used for business activities.
At Nexia Advicero, we have a number of specialists who deal with WHT issues – please feel free to contact us.
New rules for vehicle excise duties from 1st April 2025
An amendment to the Excise Duty Act came into force on 1st April 2025. The most important changes concern the refund of excise duty on temporarily registered passenger vehicles and an exemption for vehicles registered for professional test driving.
The most important changes to the excise duty concern:
- the excise taxation of passenger vehicles not previously registered on the territory of the country, to which the provisions relating to a passenger vehicles apply respectively:
- registered temporarily in the territory of the country in order to enable its export abroad in accordance with the provisions on road traffic, on which the excise duty has been reimbursed
- registered professionally in the territory of the country for the purpose of test drives in accordance with the provisions on road traffic:
- on which the excise duty has been reimbursed or;
- which has been exempted from excise duty.
- a subject who acquired the right to dispose as owner of a passenger vehicle not previously registered on the territory of the country, on which excise duty was paid on the territory of the country, in the event of an intra-Community supply or export of a passenger vehicle, is entitled to reimbursement of excise duty:
- registered temporarily on the territory of the country in order to enable its export abroad in accordance with the regulations on road traffic,
- registered professionally on the territory of the country in order to perform test drives in accordance with the regulations on road traffic
on which excise duty has been paid on the territory of the country.
If the passenger of such vehicle referred to in the point aboveparagraph 1a is registered on the territory of the country in accordance with the provisions on road traffic within one year from the date of the intra-Community supply or export, the excise duty shall not be reimbursed.
- new excise duty exemptions for passenger vehicles professionally registered in the country for test drives.
We encourage you to analyse whether the above may apply to your situation – if in doubt, do not hesitate to contact the experts at Nexia Advicero.
Deregulation law – what changes will it introduce?
Further examples of proposed changes and simplifications affecting the sphere of tax law have been presented. This is another proposal for changes to be introduced as part of the package of the so-called Deregulation Act.
The most important proposals for change concern the issues of:
- presumption of taxpayer’s innocence – unless the office proves the taxpayer’s mistake;
- no punishment for unintentional mistakes – rationalisation of the administration’s approach to entrepreneurs;
- more clear and uniform tax law interpretations – to prevent misinterpretation of tax law;
- rationalisation of imprisonment – taking into account the need to effectively prosecute the most serious tax offences;
- digitisation package – new services in mCitizen (e-signature, chatbot, mFirma, e-legitimacy);
- tacit settlement of a case – automatic resolution of a case in favour of the applicant if the office does not respond in time;
- no need to provide data that the office holds – the authorities will use registers in which the data are made available and the citizen will not have to provide them again.
The work of the deregulation team is still ongoing. We are keeping up to date with all their proposals and the translation into specific taxpayers – if you are interested – please do not hesitate to contact us.
Safety relief – what does it apply to and will it be introduced?
The security relief is a proposed tax change that has come from the National Chamber of Tax Advisers. It is intended to be a new income tax relief to be the state’s response to security threats and emergencies. It is to be modelled on existing solutions from the research and development (R&D) relief.
The mechanism of the security relief is to be that qualified expenses will be deducted in the annual return at the rate of 200% of the expense incurred. The purpose of this relief is to increase the citizens’ sense of security, primarily in emergency situations.
The safety relief is intended to cover expenses such as fire safety, safety and first aid training, the purchase of emergency backpacks, also by employers for employees. A deduction for the cost of building a shelter by individuals is also being considered.
The preference would be aimed at:
- PIT taxpayers – settling according to the tax scale (12% and 32%),
- to entrepreneurs settling PIT in the form of a 19% flat tax, and
- to entrepreneurs settling PIT in the form of a lump sum on registered income, and
- to CIT taxpayers.
As it stands, the safety relief could also be used by individuals who are not entrepreneurs – up to a limit of PLN 1,000 in the annual return. Work on the relief is still in progress, it needs to be approved by the government.
This relief may have a big impact on the situation of individual taxpayers – as soon as it is introduced – we will let you know. We already encourage you to contact us about this and other reliefs available to entrepreneurs.