On June 1, 2020, the regulation of the Minister of Finance on the extension of deadlines for the remittance of income tax advances and flat-rate income tax by some payers was published in the Official Journal of Poland. The regulation shall enter into force on the day of its publication.
According to the Personal Income Tax (PIT) act, an employer is obliged to withhold PIT advances
from employee’s monthly remuneration and pay them to the account of an appropriate tax office by
the 20th day of the next month following collection of such advances from each employee.
The Anti-Crisis Shield law introduced a later due date for remittance of PIT advances from employment income, social security cash benefits paid by tax remitters and revenues from the mandate contract and specific task contract collected in March and April 2020 until June 1, 2020 (see Article 52o of the PIT Act). Now, the Minister of Finance has extended the deadlines for payment of tax advances, including the PIT advance for May 2020.
According to the regulation, the deadline for payment of PIT advances and flat-rate income tax collected in March 2020 is extended until 20 August 2020, collected in April 2020 - until 20 October 2020, and collected in May 2020 - until December 20, 2020.
As mentioned in the explanatory to the regulation, the extension of the deadlines is to help tax remitters affected by the current economic slowdown to meet their statutory obligations and to avoid penalty interests from late payments of tax.
To be eligible for such deferred due date, a remitter needs to show that it has suffered negative economic consequences of COVID-19. Unfortunately, neither the Anti-Crisis Shield law nor the regulation specifies how a remitter can prove its deteriorated financial standing.
However, the Ministry of Finance provided some examples of adverse effects of the economic downturn due to COVID-19", i.e.:
- a decrease in revenue as compared to the previous month or another corresponding period,
- resignation of contractors from contracts that would be performed later (no decrease in revenue, but also there is no increase),
- abandoning of developmental and strategic investments,
- loss of co-financing, subsidies, due to e.g. failure to meet the required conditions that could not be met due to COVID-19,
- loss of financial liquidity due to the lack of payments from contractors while maintaining operations at the current level,
- losses due to the incapacity to sell goods and products that were produced before the COVID-19 epidemic, and currently there is consumer appetite for them or it is significantly reduced.
Notably, the extended due date for PIT advances does not apply to individuals earning income from foreign employment contracts. Those individuals are required to pay monthly PIT advances directly to the tax office without any remitters’ assistance. As the Anti-Crisis Shield law and the regulation does not cover employees who work in Poland based on non-Polish employment contracts, they should follow the standard payment due dates.
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