LAW FOR ENTREPRENEURS
On 1 January 2020, an act that is supposed to reduce payment gridlocks entered into force. It will shorten (up to max. 30 days from the date of delivery of the invoice) the payment deadlines in commercial transactions in which the debtor is a public entity (excluding public entities that are healthcare entities). It'll also shorten (up to max. 60 days) payment deadline in transactions in which the creditor is a micro-, small or medium-sized entrepreneur, and the debtor is a large entrepreneur (the so-called asymmetrical transaction). The largest corporate income tax payers (capital groups and CIT taxpayers whose income exceeds EUR 50 million annually) will send annual reports on their payment deadlines to the Minister for Economy (Ministry of Development). These reports will be publicly available. The first reports on payment practices are to be published in 2021 (they will provide information about 2020). The President of the Office of Competition and Consumer Protection will impose fines on companies that delay the settlement of their obligations the most.
From January 1, a large part of the Friendly Law Package (PPP) also entered into force, which among others establishes the right to make a mistake - if an entrepreneur was to make a mistake (for which a fine or penalty can be imposed), he won't be given a penalty, only an instruction and he will be obliged to remove the violations and their effects within the time limit set by the authority. The right to a mistake will apply to entrepreneurs registered in the Central Register and Information on Economic Activity (CEIDG). It will apply for one year from the date of setting up a business for the first time or again, after at least 36 months from the date of the last suspension or termination of business.
White list of VAT taxpayers already with sanctions
Anyone who pays for a transaction worth over PLN 15,000 to the account of the contractor that is not present on the electronic list of active VAT taxpayers, cannot include this expense as tax deductible cost. In addition, he will answer jointly and severally with the seller if he does not pay VAT on this transaction.
How to avoid sanctions? A buyer who does not find the seller's account on the white list can completely withdraw from the transaction or force the contractor to register the account on the electronic list. If he does not want to risk problems with the contractor, but plans to avoid tax penalties, he may use another solution. Within three days of making the payment to the account that is not on the white list, he should notify the tax office competent for the seller about it.
The notification should be submitted on the ZAW-NR form. As indicated by the tax clarifications of December 23, one such notification will apply to all payments that are made to an account that is not registered on the white list.
The buyer’s responsibility
However, only the buyer can submit the notification. If the seller wants to do it, then it will not be valid, and the buyer will incur sanctions for payment to an unregistered account (no tax-deductible costs as well as joint and several liability for VAT).
If the buyer makes a mistake and sends a notification to a different tax office than he should (i.e. not to the one that is competent for the seller), it will be forwarded according to jurisdiction and no sanctions should be imposed.
The ministry is also working on amendments to regulations that will allow the buyer to avoid sanctions in income taxes and VAT if he pays the supplier to an unregistered account in the split payment mechanism. Currently, "split payment" allows to avoid only joint and several liability for unsettled VAT.
How do mistakes get treated?
The regulations that are in force since September 2019 also indicate that sanctions will not be imposed if the buyer makes a payment to a third party's account that is registered on the white list. This is especially important mainly in case of factoring transactions. That's because the regulations don't prohibit payments on the account of an entrepreneur dealing with service of debt collection. However, if he accepts the payment and then transfers it to the service provider to an unregistered account, he should declare tax income (Art. 14 paragraph 2h of the PIT Act, Art. 12 paragraph 2i of the CIT Act).
The factor does not have to declare income if:
- the value of the transaction does not exceed PLN 15,000 and hence is not subject to the regulations regarding the white list, or
- if he notifies the relevant tax office of the payment to an unregistered account.
Payments abroad treated like unregistered accounts
The provisions on sanctions for payments to unregistered accounts also apply to transactions carried out with foreign entities that are registered in Poland as an active VAT taxpayer. Therefore, entrepreneurs should first check the tax status of a foreign seller or service provider (whether he acts as a Polish VAT taxpayer), and then check whether his account appears on the electronic list of the head of The National Revenue Administration. There are no foreign accounts on this list, so to avoid sanctions, you should pay only to the Polish white-list account of such an entity that is a VAT taxpayer (or submit a payment notification to the tax office within three days).
LABOUR LAW
The amount of the minimum remuneration for work is PLN 2,600 gross, effective from January 1, 2020. Full-time employees are eligible to the minimal wage and it applies to any type of employment contract. A person employed full-time should receive a salary of at least PLN 2,600.
From 2020, the seniority allowance will not be included in the minimum wage. The seniority allowance is a supplement to the remuneration that an employee receives for reaching a certain period of employment, on terms specified by the employer. This supplement is available only with employers who have established such a component of remuneration (e.g. in the remuneration regulations, collective labour agreement).
Allowance for night work
An increase in the minimum wage also means an increase in the allowance for night time work. The night time is eight hours between 9:00 p.m. and 7:00 a.m., although the exact time range is specified by each employer in the in-house files. An employee who performs work at night is entitled to an allowance for each hour of such work in the amount of 20% of the hourly rate resulting from the minimum remuneration for work.
Hourly rate for civil law contracts
Persons who work based on civil law contracts are guaranteed the payment of a minimum hourly rate. From 1 January 2020, the hourly rate is PLN 17 gross.
The minimum hourly rate applies to contracts of mandate (Art. 734 of the Civil Code) or contracts for the provision of services, to which the regulations regarding the mandate apply (Art. 750 of the Civil Code).
The guarantee of receiving the minimum rate includes:
- natural persons who do not conduct business activity and
- natural persons conducting business activity, who are sole proprietors and personally perform tasks resulting from the contract.
