PIT advance payments – new deadlines

As part of the support program for entrepreneurs in the time of the COVID-19 pandemic, the government decided to postpone the deadlines for submitting advance payments for personal income tax (PIT) to tax offices. The new regulations were introduced under the Anti-Crisis Shield by the amendment to the PIT Act.

The original, previously in force regulations concerning PIT advance (and also the flat-rate income tax payments) have required that the payments were to be made by June 1st, 2020.

According to the legislator’s intention, the purpose of the delays in advance payments is the need to support companies that employ workers in maintaining financial liquidity and, consequently, protecting jobs.

Entities eligible for the new deadlines

The regulation applies to the PIT payers who have suffered negative economic consequences due to the COVID-19 coronavirus, therefore qualify:

• work establishments that pay income resulting from the employment relationship, service relationship, outwork, cooperative employment relationship, benefits from social insurance;
• natural persons (conducting business, as well as legal persons and their organizational units and organizational units without legal personality) who provide services for activities performed in person, as well as for copyright and related rights.

It is worth remembering that the premise about negative consequences due to COVID-19 does not have a definition in the new regulations. The conditions for qualifying for the deadline extension is determined each time by the tax authority through an interpretation. The lack of clear rules results from the fact that the scope of damage caused by the lockdown may differ depending on the industry.

Advance types covered by new regulations

The regulation covers:

1. Advance payments for tax collected on income from the employment relationship, business relationship, outwork, cooperative employment relationship, benefits from social insurance, and the performance of services under a contract of mandate or contract for work.
2. Flat-rate income tax charged on revenues for:

• performance of services, based on a contract of mandate or a contract for work;
• copyright and related rights.

The collection of advances for contracts of mandate and specific work applies to those obtained only from:

• a natural person running a business;
• a legal person and its organizational unit;
• an organizational unit without legal personality – owner, manager or administrator of the real estate with business premises rented – only if the taxpayer performs services related exclusively to the subject property,
• the enterprise inheritance.

Provisions include flat-rate income tax in the amount of 20% of the obtained income. The 17% rate applies when it concerns small contracts of mandate, or when the amount due does not exceed PLN 200 PLN, and the for the contracts not concluded with the employee in person.

PIT advance payments – new deadlines

The Minister of Finance has set new deadlines for transferring advance payments to the tax office only for a specified period. The change covers three calendar months: March, April, and May.