With the introduction of the Polish Order we are dealing with a fundamental and revolutionary change to the Polish tax system. This multi-faceted and extensive amendment will certainly affect a broad spectrum of interests of many taxpayers. The assumptions of the programme are not only related to taxes, but also to the social security system, pensions, principles of conducting business activity and even housing, health or agriculture. Seemingly, the Polish Deal is part of the equal opportunities policy and provides for lower taxes for the lowest earners, while remaining neutral for the so-called middle class. The provisions of the Polish Deal assume changes in, among others, the Act on Consumer Rights, the Act on Entrepreneur Law and the Act on Tax on Civil Law Transactions.
The provisions of the Polish Deal add to the Consumer Rights Act Article 7b, which creates an obligation on the part of the consumer to make payments via a payment account if the single value of the transaction with the entrepreneur exceeds PLN 20 000. The number of payments resulting from this transaction is irrelevant. Transactions in foreign currencies are converted into PLN at the average exchange rate of foreign currencies published by the National Bank of Poland on the last business day preceding the day of the transaction.
In addition, the provisions of the Polish Ordinance also establish an upper cash settlement threshold of PLN 20 000, beyond which the consumer, when concluding a transaction with the trader, will be required to use non-cash forms of payment. Traders will also be obliged to ensure that payments can be made using non-cash payment instruments, which is a response to consumer needs and the desire to ensure a choice of the most convenient payment method. This obligation does not apply to traders who are not obliged to keep records of sales using cash registers. If a trader accepts a cash payment from a consumer in a situation where the consumer is obliged to make the payment via a payment account, the trader will generate revenue in the amount of the payment made without the intermediation of a payment account.
The Polish Governance and the law of entrepreneurs
The provisions of the Polish Order amend the Act of 6 March 2018- Entrepreneurs’ Law (Journal of Laws of 2019, item 1292, as amended) by amending Article 19(2) of the same Act by replacing the word “PLN 15,000” with the word “PLN 8,000”. This means that making or accepting payments related to the performed business activity is to take place through the entrepreneur’s payment account whenever a single transaction value, regardless of the number of resulting payments, exceeds PLN 8,000. It should be remembered that in 2022 the limit of PLN 1,5000 is still in force, as the change regarding this limit comes into force on 1 January 2023.
Additionally, art. 19a has been added to the Entrepreneurs’ Law introducing the obligation to use payment terminals. According to the newly added art. 19a section 1 of the Entrepreneurs’ Law: an entrepreneur shall ensure a possibility to make payments in any place where business activity is actually carried out, in particular on the premises, outside the business premises or in a vehicle used for the provision of passenger transport services, using a payment instrument within the meaning of the Act of 19 August 2011 on payment services (Journal of Laws of 2021, item 1907 and 1814). The second paragraph of the added art. 19a specifies that the obligation to ensure the possibility of making payment using a payment instrument will not apply to taxpayers who are not obliged to keep records with the use of cash registers. In turn, we learn from the new art. 19a par. 3 of the Act on entrepreneurs that an entrepreneur who ensures the possibility to accept payments with a payment terminal and keeps records of sales with the use of cash registers enabling connection and data transfer between the cash register and the Central Repository of Cash registers, as specified in art. 111a par. 3 of the VAT Act, shall ensure cooperation of the cash register with the payment terminal, in accordance with the technical requirements for cash registers, which are specified in the executive regulations issued pursuant to this Act. Therefore, it can be interpreted from the cited provision that a taxpayer who uses cash registers is also obliged to install a payment terminal to his cash register. The existence of such obligation is confirmed by the new Article 111 par. 6kb of the VAT Act, according to which: ‘if it is found that the taxpayer keeping records of sales with the use of a cash register, contrary to the obligation referred to in Article 19a(3) of the Act of 6 March 2018. – Entrepreneurs’ Law, does not ensure cooperation of the register cash register with the payment terminal with the use of which it provides the possibility to accept payments, in accordance with the technical requirements for register cash registers, the head of the tax office, by way of a decision, imposes on that taxpayer a financial penalty in the amount of PLN 5000.
It should be noted that the possible obligation to install a payment terminal cooperating with the cash register will apply to taxpayers using online cash registers. This follows from the fact that Article 111 par. 6kb of the VAT Act indicates a register cash register which is to ensure cooperation with a payment terminal, and the only such cash register is an online one. It follows from § 44 subparagraph 1 of the Regulation of the Minister of Development, Labour and Technology of 12 September 2021 on technical requirements for cash registers (Journal of Laws of 2021, item 1759), which is dedicated exclusively to online cash registers, that the cash register cooperates with the payment terminal using a communication protocol of cooperation between the cash register and the payment terminal. Similarly, this issue is regulated in the regulation of the Minister of Finance of 26 May 2020 on cash registers having the form of software (Journal of Laws of 2020, item 957), the so-called virtual cash registers. In the light of § 48 subparagraph 1 of that regulation, cash register cooperates with a payment terminal with the use of a communication protocol of cooperation between the cash register and the payment terminal. Cash registers with a paper and electronic recording of a copy of cash register receipts do not have functionality consisting in the possibility for the cash register to cooperate with the payment terminal.
In addition, as follows from Article 89.3 of the Act amending the Act on personal income tax, the Act on corporate income tax and certain other acts, the possible obligation to install payment terminals will be introduced as from 1 July 2022.
There is one more issue to consider, as it is indisputable that Article 19a of the Business Law introduces an obligation for taxpayers who record sales to natural persons not conducting business activity and flat-rate farmers to provide the buyer with a possibility to make payment using a payment instrument. However, in the light of Article 19(3) of the above Act, not all taxpayers who have an online cash register will have to install payment terminals. Based on the commentary to the Payment Services Act, edited by Jan Byrski and Anna Zalcewicz, 2nd edition, WKP 2021, ”a payment instrument is therefore used to complete a payment transaction. It may take various forms and use both traditional forms (e.g. non-cash payment instruments, such as credit transfer, direct debit), as well as (more and more often) modern tools and technologies, leading in consequence to the execution of a payment transaction” we may conclude that the implementation of the obligation under Article 19a of the Business Law may take place through the seller providing access to a computer, smartphone or tablet used by the buyer to execute the payment through access to a bank account, enabling the buyer to make a fast pay-by-link payment using the above-mentioned devices.
Polish Deal and tax on civil law transactions
The Polish Deal involves changes in the law on tax on civil law transactions, which are related to the introduction of the institution of VAT groups to the Law on tax on goods and services. With the emergence of a new institution, the necessity has been noticed to introduce a provision that will exclude from taxation transactions made between entities belonging to a VAT group, and therefore having the status of a VAT taxpayer, with the exception of transactions currently subject to tax on civil law transactions. In Article 2(4) of the Act on civil law transactions, letter c has been added, according to which activities constituting the supply of goods or provision of services, other than contracts of partnership or its changes, performed between members of a VAT group which are exempt from VAT taxation, are also exempt from taxation.
The Polish Order introduces a tax relief which will allow for the possibility to deduct certain costs incurred by the entrepreneur from the tax base.