Central Europe Tax&Legal Highlights

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Central Europe Tax & Legal Highlights

December 2019

Welcome to the Tax & Legal Highlights newsletter. This page provides you with the latest information on tax and legal related issues from around the Central Europe region. For more specific information – choose your country and find out more about local tax practices and news around the region.

Bulgaria

Amendments in the Corporate Income Tax Act (“CITA”)

Rules aimed at neutralising the effects of “hybrid mismatches”. Their focus is on the financial hybrid mismatches.
Other amendments - specific tax treatment for expenses for repair, construction and development of technical infrastructure.
 
 
Amendments in the Value Added Tax Act (“VATA”)
  

VAT treatment of goods in the continental shelf and EEZ. The requirements would affect exploration activities in the Black Sea.
No mandatory VAT registration threshold for foreign taxpayers
Quick fixes: 4 changes in the treatment of the supplies of goods.
Other amendments
 
 
Amendments in the Personal Income Tax Act (“PITA”)
  

Less requirements for utilizing tax relief
Added clarification for taxation of received dividends in the form of hidden profit distribution amounts
Opted out requirement for mandatory reporting by income payers 
 
 
Amendments in the Local Taxes and Fees Act (“LTFA”)
  

Valuation for tax purposes in cases of violation of the accounting legislation
Other amendments
  
  
Amendments in the Tax and Social Security Procedure Code (“TSSPC”)
  

Who is obliged to prepare a transfer pricing documentation?
     

Read more (PDF)

 

Poland

Central Register of Beneficial Owners launched on 13 October 2019 
   
13 October 2019 saw the provisions of the Anti-Money Laundering Act (the AML Act) come into force, based on which the Central Register of Beneficial Owners was launched. 

   
The next wave of perpetual usufruct fee updates
   
The fourth quarter of the calendar year is usually the time when perpetual usufructuaries see the perpetual usufruct fees they have been paying so far terminated, and higher fees offered. For such fee updates to be effective from the following year, they must be carried out by 31 December of the prior year (in accordance with Article 78.1 of the Act on Real Property Management).

  
Amended Act on public offering and conditions governing the introduction of financial instruments. New obligations regarding the remuneration policy, related party transactions, and identifying shareholders
   

On 16 October 2019 the Sejm amended the Act on public offering, conditions governing the introduction of financial instruments, and public companies, thereby changing twenty other acts. The President has already signed the bill into law, and the new provisions are to come into force fourteen days after they are published in the Polish Journal of Laws.


Transfer Pricing
  
Taxpayers whose tax year ends between October 1, 2019 and December 31, 2019 may be required to prepare tax documentation within 3 months of its end


New withholding tax (WHT) rules. Are more changes in store?
  
To sum up the current situation: certain amendments concerning withholding tax took effect beginning from January 1, 2019. They include the new, extended definition of the beneficial owner concept and introduce the duty of care for the tax remitter to verify the taxpayer's compliance with the conditions for the application of tax relief with respect to payments received in Poland subject to withholding tax; in addition, legislators have also significantly limited the range of situations in which the said tax relief can be applied.


Withholding Tax (WHT). Application of the new rules probably postponed till 30 June 2020

09 December 2019 saw the publication of the Regulation of the Minister of Finance amending the Regulation on the exclusion or restriction of the application of Article 26(2e) of the Corporate Income Tax Act. In accordance with the amended Regulation, the temporary exclusion of the application of Article 26(2e) of the CIT Act is extended until 30 June 2020 (within the scope not originally covered by indefinite exclusion).


Changes in income taxes in the context of the White List, split payment and prevention of payment system gridlock. Restrictions on the tax deductibility of certain costs.

Amendments restricting the tax deductibility of certain costs will come into force as from 1 January 2020. Potential negative consequences on the grounds of PIT and CIT regulations may occur for payments made to accounts not disclosed in the list of VAT taxpayers (White List repository), payments made outside the split-payment mechanism in a situation where the purchaser is obliged to make the payment, as well as the liabilities not settled within the deadline that results from the regulations on preventing payment system gridlock. 


Read more (PDF)

Serbia

Amendment of customs declaration upon release of goods
   
The Customs Authorities issued a Ruling no. 148-I-030-01-537/2019 as of 21st November, 2019, which pertains to amendment of customs declaration after the goods have been released, including the possibility of imposing liability for misdemeanor penalties in that case. Said ruling may be of interest to importers which have, in the period after the new Customs law came into force, been required or will be required to submit amended customs declarations.


Law on amendments to the Law on Corporate Income Tax has been adopted 
   

Law on changes and amendments to the Law on Corporate Income Tax (the Law) has been adopted by the National Assembly of the Republic of Serbia on 6 December 2019, and will apply starting from corporate income tax calculation for 2020, or for tax periods commencing in 2020, except for rule referring to deductibility of expenses for banks incurred in line with the legislation on conversion of house loans indexed in CHF, which will be applicable for 2019 corporate income tax calculation.


Amendments to the Personal Income Tax Law have been adopted
   

Draft Law on changes and amendments to the Law on Personal Income Tax (the Law) has been adopted in National Assembly of the Republic of Serbia on 6 December 2019, and will enter into force 8 days from publishing in the Official Gazette RS, i.e. on the 14 December 2019.


Law on changes and amendments of the Law on Mandatory Social Security Contributions has been adopted 
 
Law on changes and amendments to the Law on Mandatory Social Security Contributions (the Law) has been adopted in National Assembly of the Republic of Serbia on 6 December 2019, and it will enter into force 8 days from publishing in the Official Gazette RS, i.e. on 14 December 2019.


Amendments to the Law on Tax Procedure and Tax Administration have been adopted 

Law on Tax Procedure and Tax Administration (the Law), has been adopted by the National Assembly of the Republic of Serbia on 6 December 2019, and will enter into force within 8 days of its publication in the RS Official Gazette, i.e. on 14 December 2019.


Read more (PDF) 

Romania

Hungarian Competition Authority imposes a fine of EUR 3.6 million for unfair commercial practices 
    
Following similar decisions in other EU member states, the Hungarian Competition Authority (which is also competent in the field of consumer protection) sanctioned with a fine of 3.6 million EUR the behaviour of a social media services provider presenting its services to consumers as “free”.


Berlin DPA fine of 14.5 million EUR highlights the importance of storage limitation principle
    

Berlin Data Protection Authority (“DPA”) imposed a huge fine of 14.5 million EUR (5th biggest fine in the EU and highest in Germany) against a real estate company for the failure to observe the storage limitation and data privacy by design principles.


Read more (PDF) 

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