Cancellation of an epidemic state in Poland - tax implications

Turning the state of epidemic into a state of epidemic emergency changes the tax situation for some entrepreneurs. From 16 May, tax preferences aimed at combating and counteracting the effects of the COVID-19 pandemic will be gradually lifted. What changes should entrepreneurs prepare for?

Cancellation of epidemic state - end of tax reliefs

The replacement of an epidemic state by an epidemic emergency state means that some of the special tax preferences will soon cease to be available. This situation will therefore affect companies' current tax returns, including the deductibility of donations made to fight coronavirus.

Donations to fight coronavirus

As a consequence of turning an epidemic state into an epidemic state, the deductibility of certain donations made to fight coronavirus will only be available until the end of May 2022. 31 May is therefore the last day to make such a tax-deductible donation.

Until 31 May 2022, taxpayers can still benefit from CIT and PIT deductions for the following donations:

• donations made to the fight against coronavirus,
• donations of computer equipment to the educational establishments' governing bodies,
• donations related to plasma donation.

Tax reliefs

Cabinet's decision to revoke the state of epidemic on 16 May means that the following tax exemptions and reliefs will not be available as of the dates indicated below:

• bad debt relief - it is possible to exclude the need to increase the tax base (under certain conditions) until the end of the year during which the state of epidemic is lifted,
• exemption from tax on income from buildings - until the end of the month in which the state of epidemic is lifted,
• IP BOX relief, i.e. application of 5% PIT/CIT for income from qualified IP used to counter COVID-19 - CIT taxpayers until the end of May (advance payments), PIT taxpayers until the end of 2022,
• R&D tax relief, i.e. expiry of the right to settle in PIT/CIT advance payments qualified R&D costs incurred in order to develop products necessary to counteract COVID-19 - settlement in costs until the end of May 2022
• the right to a one-off depreciation write-off on fixed assets used for the production of goods associated with counteracting COVID-19 - until the end of May 2022.

Until the end of the tax year in which the epidemic state is cancelled, i.e. until the end of 2022, an increase in the limits for certain PIT exemptions for allowances paid to employees will continue to be in force, i.e., for example, downtime allowances granted in connection with the COVID-19 epidemic shall continue to be tax-free.

State of epidemic emergency - tax preferences in force

Some of the special tax preferences have been retained until the state of emergency is revoked. These solutions include:

• suspension of the deadlines for reporting information on tax schemes (MDR) - this will apply until the 30th day following the day on which the state of epidemic emergency is revoked,
• preferences with respect to holding a tax residence certificate,
• extension by 14 days of the deadlines for informing about the payment of dues to an account outside the so-called white list,
• extension by 3 months of the deadlines for issuing individual tax interpretations.