Poland: Removal of bureaucratic hurdles in economic transactions
On 01.01.2013, the act of 16.11.2012 on the removal of bureaucratic hurdles in economic transactions is in force. Based on that law, modifications on tax regulations with regard to leasing transactions were enforced. In particular leasing of intangible assets and rights was admitted as well as the rights of usufruct on real estate. So far the assertion of such rights on the basis of leasing contracts for tax purposes was not possible. Moreover, the conclusion of leasing contracts with regard to tangible fixed assets or intangible assets and rights, which were previously subject of leasing agreements and the assignment of leasings to another lessee without the risk of possible tax disadvantages, became possible. In the case that tangible fixed assets are repeatedly part of a leasing, the initial value shall correspond to the market value at the time of the transfer of the leasing. At the same time the minimum duration for leasing of real estate was reduced to 5 years.
A significant modification in the tax regulations, which has an impact on every participant of commercial transactions, is the introduction of a regulation in order to avoid payment gridlocks. In accordance with the new regulation, in cases, in which amounts resulting out of invoices have been accounted for as operating expenses and there was no obligation to issue a formal invoice, the tax payer is obliged to reduce his declared operating expenses by those amounts – if those amounts derived out of a contract or a different document and the tax payer failed to pay the amount within a period of 30 days from maturity.
This means an obligation to remove from tax statements operating expenses in relation to payments that were not made in due time and that obligation arises in the month in which the 30 day period expired without payment. Controversial however is a provision that provides for a reduction of the right to declare operating expenses with the tax authorities within 90 days as of the of statement of the amount as operating expense, if the payment term date on the invoice was more than 60 days. In this way, the freedom of trade is limited for the purpose of combating payment gridlocks. While a similar construction is justified in the case of a transgression of mutually agreed payment terms, the latter case seems to show that the Polish legislative body doubts the parties’ common sense. In each case the aforementioned provisions leads to a situation, in which a payment that is not made in time has significant impact on the tax situation. Regulations are also provided for a situation that in the month, in which the taxpayer is obliged to reduce his declared operating expenses, and he does not bear any further operating costs. In that case he is obliged to increase his declared operating income by the amount by which the declared operating expenses must be reduced. The operating expenses can then only be added to a tax declaration after the obligations were actually settled and only to the extent that payment was actually made.
Finally it is to be highlighted that the waiting period for the declaration of a relief for bad debt (with regard to VAT) was shortened. From now on the waiting period for a correction of VAT on unpaid debts amounts is 150 days (previously it was 180 days). At the same time a restriction was implemented when making use of the relief, if the debtor on the eve of the advance VAT return is neither in bankruptcy proceedings nor liquidation proceedings.
The clients of our law firm are mainly foreign companies (non-EU and EU-companies) as well as German companies. We serve middle-sized companies (mainly corporations) as well as bigger companies listed on the stock exchange.
In addition to companies of the financial service sector (banks and investment companies), most of our clients belong to the manufacturing trade or the industrial sector. Our client's industrial focus is, among others engineering (mechanical and plant engineering), furniture and food industry and the transportation sector, however we are also experienced in the construction sector. The issues arising with the business activities of those companies with regard to fiscal and business law, under which we also define issues with regard to individual and collective labour law, therefore belong to our consulting spectrum. In case of acquisition of companies, we undertake the transaction advisory and preparation of documentation as well as a legal due diligence. If fiscal or economical issues arise, we have renowned corporation partners at hand.
Due to the international profile of the law firm, a very important field of consultation naturally is cross-border commercial law and the securitisation of receivables by appropriate means of securitisation, as well as the collection of commercial receivables.
As a result of our expertise in national and international insolvencies and restructurings, another important scope of our services is the consultation in reorganization/restructuring and insolvency related matters. With regard to the European insolvency regulation (Counsel Regulation) (E.C.) (No.1346/2000) we possess profound knowledge and experience, which has been maintained after having been tried and tested in practice.
Due to previous activities of the founder of the law-firm as "workout" specialist for large credits in a German financial institution, we are able to advise our clients from the point of view of a potential creditor as well as the debtor company's view. Our founder's strength in mediating between the debtor and financial institutions and negotiate realisable restructuring plans results in acceptable and overall prompt solutions for all participants.
We are members of B.R.S.I (Bundesverband Restrukturierung, Sanierung und Interim Management- Corporate Restructering Associations Germany), BCCG (British Chamber of Commerce in Germany), PZGH (Polskie Zrzeszenie Gospodarzo Handlowe) –Polish Association of Economy and Commerce), GRUR (Deutsche Vereinigung für gewerblichen Rechtsschutz und Urheberrecht e.V. – German Association for the Protection of Intellectual Property) and DAV (Deutscher Anwaltsverein - German Lawyers Association).
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