Timely payment of taxes may still be profitable
Increased rates of remuneration for timely payment of taxes to the state budget are in force until the end of 2023. Currently, payers can receive up to 0.6% of the amount of PIT collected and 0.3% of other taxes.
The payer shall benefit
According to Article 28 of the Tax Ordinance, payers are entitled to a lump sum remuneration for timely payment of taxes deducted. The legislation refers to the payer, i.e. the entity obliged to calculate, collect and pay to the office the tax deducted from the taxpayer. The institution of the payer occurs most frequently with regard to income and local taxes. Less frequently, payers are executive bodies for turnover taxes, or the so-called VAT payers on intra-Community acquisition of motor fuels, who are also entitled to remuneration on timely payments.Increased remuneration amounts only until the end of 2023
When collecting tax, the payer calculates the amount of remuneration and deducts it from the amount of tax to be paid to the tax authority himself. The basis for determining the rate of remuneration is the Ordinance of the Minister of Finance dated June 28, 2022, on remuneration of payers and collectors for timely payment of taxes to the state budget (Journal of Laws, item 1377, hereinafter: the "Ordinance"). According to the Ordinance, the remuneration for timely payment of taxes to the state budget is 0.3% of the amount of such taxes collected by the payer.
After the implementation of the "Polish Order" by the legislator, the Ministry of Finance decided to temporarily increase the remuneration for timely PIT payments. According to the amended Ordinance, in the period from July 1, 2022, to December 31, 2023, the remuneration for taxpayers of tax calculated according to the tax scale is 0.6% of the amount of tax collected. As a general rule, for payments of other tax liabilities, payers will be remunerated at the basic rate of 0.3% of the tax collected.
Until the liability is time-barred
Most often, payers calculate remuneration on timely payments on an ongoing basis, e.g. together with the advance payment of employees' PIT. However, such an approach may be risky. According to the well-established approach of the administrative courts, if, when settling the taxes collected by the payer, it turns out that an overpayment has occurred, the payer will be obliged to return the remuneration:If the competent tax authority has stated an overpayment in the tax collected by the payer (which thus turned out to be tax collected unduly or in an amount higher than the due one), the payer is obliged to return the relevant part of the remuneration, regardless of the circumstance, when the prerequisites for stating the overpayment occurred, as well as when they appeared after the collection of the tax by the payer. The fact that it became possible to determine an overpayment because the taxpayer submitted a certificate of residence after the tax had already been withheld does not relieve the payer, from the obligation to refund the remuneration. - Judgment of the Supreme Administrative Court of 30.06.2014, II FSK 1784/12, LEX
It is worth remembering then that if the payer has not previously exercised the option to calculate remuneration for timely payments, he/she may calculate it until the tax liability is time-barred. The provisions of the Tax Ordinance do not require the payer to make deductions from the remuneration due in the same month in which the tax collected is paid, nor set a separate deadline in which such possibility is to be lost. Therefore, the general rules for the expiry of tax liabilities apply. This approach is also confirmed by the Director of the National Tax Information (KIS):
It should be mentioned that there is no provision of the Tax Ordinance, which imposes an obligation on the payer to make the deductions of the remuneration due to him/her, referred to in Article 28 of the Tax Ordinance, in the same month in which he/she paid the previously collected tax, or specifies the deadline in which this right of the payer may be exercised.
This means that there is no legal objection to deducting remuneration on a quarterly, annual or multi-year basis. However, one must assume that this entitlement shall remain in force for the entire period in which the obligation exists, i.e. until its limitation period expires. - individual interpretation of 6.06.2023 0111-KDIB2-2.4017.1.2023.2.MM
At the same time, it should be kept in mind that the remuneration calculated on timely payment of taxes should be reported in the tax return and it should correspond to the tax collected by the payer, e.g. PIT-4r or CIT-10.
When the remuneration for timely payments for a given period is calculated by the payer, the tax authorities may verify the correctness of the remuneration calculated. It may then be a good idea to provide the authority with documentation confirming the amounts of taxes collected and the timeliness of the payments, which allow it to establish the validity of the remuneration collected by the payer.
Providing correct calculation of remuneration for timely payments and professional support when preparing documentation is the key to taking effective advantage of the benefits of current legislation. Tax specialists will help you avoid mistakes and maximise the financial benefits of paying your taxes on time.
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We offer our clients the support during tax and fiscal inspections and during tax proceedings. We also submit requests for individual interpretations of the tax regulations on behalf of our clients.Crowe's tax advisory services also include ongoing support for CIT, PIT and VAT taxes. We also offer assistance in areas selected by the company such as:
