Changes regarding the reporting of applicable payment terms for 2022
In connection with the amendment of the Act on Prevention of Excessive payment Delays in Commercial Transactions (as per Journal of Laws of 2022, item 893, as amended), which took place at the end of 2022, we would like to draw your attention to the changes in the provisions regarding the obligation to submit a report on the applicable payment terms in commercial transactions.
We would like to remind you that this is an obligation incumbent upon taxpayers other than tax capital groups, whose revenues in the previous year exceeded the amount expressed in Polish zloty equivalent of EUR 50,000,000. Under the transitional provisions, the amended regulations will apply to the submission of reports for 2022 and their adjustments.
Below we present the most crucial changes resulting from the above-mentioned novelty.
Change in the scope of entities and transactions covered by the reporting obligation
The entities referred to in Article 27b (2)(2) of the CIT Act, whose individual data were made public within the time limit indicated in Article 27b (1) of that Act, are subject to the obligation. Public entities that are therapeutic entities within the meaning of the Medical Activities Act (as per Journal of Laws 2022, item 633, as amended) and tax capital groups are excluded from the reporting obligation.
In addition, the report currently excludes:
- commercial transactions concluded within the scope of insurance and reinsurance activity, referred to respectively in Article 4(1) and (2) of the Act of 11 September 2015 on insurance and reinsurance activity (Journal of Laws of 2022, item 2283);
- commercial transactions, whose exclusive parties comprise entities belonging to the same capital group;
- monetary services for which time barring applies.
Change in the deadline for submission of the report
The deadline for submission of the report has also changed. Previously, the managers of entities were required to submit a report on the payment terms applied by these entities in the previous calendar year in commercial transactions by 31 January. Under the current legislation, the submission of the report should be made by 30 April of the year immediately following the year in which the individual data of the taxpayer were made public.
Therefore, if the taxpayer’s individual data referred to in Article 27b of the CIT Act (i.e., after exceeding EUR 50 million in revenue for 2021) was made public in 2022, then the submission of the report should take place by 30 April 2023.
Change in the scope of transactions that are required to be included in the report
According to the amended regulations, the report should contain the following data:
- company (name) and tax identification number;
- the value of cash payments received in the previous calendar year within the timeframe specified in the agreement
- the value of cash payments fulfilled in the previous calendar year within the timeframe specified in the agreement;
- the value of cash payments not received in the previous calendar year within the deadline specified in the contract, for which the deadline was exceeded by
- not more than 5 days,
- 6 to 30 days,
- 31 to 60 days,
- 61 to 120 days,
- more than 120 days;
- the value of monetary payments not fulfilled in the previous calendar year within the timeframe specified in the contract, for which the deadline was exceeded by:
- not more than 5 days,
- 6 to 30 days,
- 31 to 60 days,
- 61 to 120 days,
- more than 120 days;
- the percentage of individual cash payments referred to in point 4 in proportion to the total cash payments due to this entity in the preceding calendar year;
- the percentage of the individual cash payments referred to in item 5 in proportion to the total cash payments this entity was obliged to fulfil in the previous calendar year.
It was further added to the Act that:
- the above data contained in items 2 to 7 are applied taking into account Article 13 (2) of the Act on Prevention of Excessive Delays in Commercial Transactions, i.e., applying the maximum statutory deadlines in a situation where the contractual provisions violate the statutory deadlines;
- the values of monetary performances referred to in points 2-5 have to be given in the Polish currency;
- the monetary values referred to in points 2-5 of paragraph 4 expressed in a foreign currency are converted into the Polish currency in accordance with the accounting principles adopted by the entity;
- the values of the cash payments referred to in subsections 4(2) to (5) and the percentages referred to in subsections 4(6) and (7) must be stated to one Polish cent and the hundredths of a percent, respectively.
Changes in the way reports are corrected
An entity that has submitted a report should submit a correction to that report if, in at least one item of the report submitted, the data have changed by minimum 10% in value. If, on the other hand, the values of the cash payments have changed in the years following the year for which the report is submitted – then these changes are included in the report for the year in which the cash payment to the extent of the changed value is due. Essentially, this means that the changes in the value of cash payments following the year for which the report is filed should be stated in the report filed for the year in which such payment falls due and a refund or surcharge has occurred or should occur.
In addition, a correction to the report should be submitted with an explanation of the reasons for the correction.
Defining of the understanding of the position of head of the entity, i.e., the person responsible for submitting the report on time
The legislator, by virtue of the amended provisions, has defined the concept of the manager of the entity obliged to submit the report as a member of the board of directors or any other governing body, a person acting as such a body or, if there is no such body in the entity, the person managing its activities.
In the case of a limited joint-stock partnership and a limited partnership, the general partner managing the affairs of the partnership is considered the manager of the entity and in the case of a general partnership, the partner managing the affairs of the general partnership is considered the manager of the entity.
Summarising the above, it should be pointed out that
- the current deadline for the submission of the report is 30 April (the report for 2022 must be submitted by 30 April 2023).
- both the elements that should be included in the report and the issues related to its correction have changed;
- the body responsible for submitting the report, i.e., the head of the entity, has been defined;
- certain entities have been excluded from the obligation to submit the report.
Source: article prepared by our cooperation partner TaxAGroup
Legal basis:
- Announcement by the Speaker of the Sejm of the Republic of Poland of 23 March 2022 on the publication of the uniform text of the Act on the macro prudential supervision over the financial system and the crisis management in the financial system (Journal of Laws of 2022, item 963)
- Announcement by the Speaker of the Sejm of the Republic of Poland dated 24 February 2022 on the publication of the uniform text of the Act on therapeutic activity (Journal of Laws 2022, item 633)
- Announcement by the Speaker of the Sejm of the Republic of Poland of 7 October 2022 on the publication of the uniform text of the Act on insurance and reinsurance activity (Journal of Laws of 2022, item 2283)
If you have any questions regarding this topic or if you are in need for any additional information – please do not hesitate to contact us:
CUSTOMER RELATIONSHIPS DEPARTMENT
ELŻBIETA NARON
Head of Customer Relationships
Department / Senior Manager
getsix® Group
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