tax | In Principle

Member states of the European Union, following other jurisdictions around the world, are stepping up their work on extending the scope of automatic exchange of tax information, which is regarded as the most effective means of combating tax avoidance.

Payments to the rightful owners of real estate taken over without legal grounds by the State Treasury or local governmental unit are subject to personal income tax as income “from other sources.” Whether the payments are subject to VAT depends on the specific circumstances.

Income from the sale of recovered real estate expropriated under the Warsaw Decree may be subject to personal income tax.

Damages won from the State Treasury are exempt from personal income tax. Does this exemption also apply to statutory interest awarded in a legally final judgment?

Benjamin Franklin said nothing is certain but death and taxes. For heirs, the latter can be a consequence of the former. Lawmakers have made certain that the passage of time does not discharge tax obligations connected with an inheritance even decades into the past. Tax obligations can be revived as a result of certain events provided by law.

There is divergence in the case law on whether the percentage rate that should be applied in setting the amount of inheritance tax is the rate in force on the date the tax obligation accrued or the date when the tax authority issues the decision setting the amount of the tax.

The Inheritance and Gift Tax Act provides special exemptions for persons who inherit landmarks but are not eligible for the exemption for inheritance from family members. But not every heir of an old building or a fine piece of Chippendale or Biedermeier furniture will be exempt from the tax.

On 1 February 2016, the Act on the Tax on Certain Financial Institutions came into force, introducing a “banking tax” and giving rise to multiple differences of opinion in the Polish banking and insurance sectors.

High social insurance premiums in Poland motivate remitters and insureds to seek business models allowing them to reduce their contributions. But the Social Insurance Institution—with the support of lawmakers—is closing more loopholes.

Amendments to Poland’s Corporate Income Tax (CIT) Act and Personal Income Tax (PIT) Act went into force at the beginning of 2015. One of the key changes is taxation of income earned by controlled foreign companies (CFC, in Polish: zagraniczne spółki kontrolowane).

On 7 October 2014 the Polish government signed an agreement with the United States to implement FATCA in Poland. The agreement now awaits ratification. It is supposed to enter into force prior to 30 September 2015.

Classification of an income tax exemption as state aid entails a number of consequences extending far beyond tax issues.