PIT 2015: Companies only have a few days left to decide whether, instead of tax for December, to settle the whole year. In the latter case, they must watch out for a mistake

Companies don’t have to pay the December tax advance. This has been the case since 2012, when such a possibility was introduced. The first time it was possible to make use of this was at the beginning of 2013. In that event an annual return must be filed by 20 January. This year the deadline will pass this coming Wednesday.

“Taxpayers pay advances towards income tax by the 20th day of the following month. For December, this obligation only exists if the taxpayer doesn’t file an annual return earlier and doesn’t pay due tax,” says Marta Ignasiak, tax advisor at FKA Furtek Komosa Aleksandrowicz law firm.

This rule has been specified in Article 44 par. 6 of the Personal Income Tax Act (PIT). It concerns not only advance payments regulated monthly but also quarterly ones, and it doesn’t matter if the business activity is taxed according to the tax scale (i.e. general rules with two rates – 18 and 32 per cent) or linearly, with a single rate of 19 per cent.

Filing a return by 20 January – on PIT-36 (intended for general rules) or PIT-36L forms (for linear taxpayers) – releases the taxpayer from having to settle December income separately. The taxpayer must fulfil one more condition – pay tax on rules provided for in Article 45. However, this requirement causes problems.

Troublesome regulations

Article 45 states that taxpayers are obliged to file a return according to the established model by 30 April, and that they must pay tax resulting from the return by that deadline. This year the deadline is exceptionally 2 May, because the last day of the PIT procedure is a Saturday. Taxpayers are asking whether they can wait until then to settle the underpayment calculated in a PIT return filed by 20 January. The problem has been in existence longer than today. It is caused by imprecise regulations.

“Stating in the law that filing a return within the time period of the December advance requires paying tax according to the rules stated in Article 45 could mean that resigning from paying the advance does not require an immediate settling of the annual obligation, but only filing an annual return by 20 January,” says the FKA advisor. However, in her opinion the matter is not so obvious. In connection with the vague referring of some rules of the PIT law to other rules in it, the dominating view in this matter is that they do in reality require the tax to be paid not later than by 20 January, and that is logical from the point of view of the purpose of introducing the new right.

This opinion is clearly presented by the tax authorities, among other things in tax interpretations issued in that matter. This has also from the beginning been the standpoint of the Ministry of Finance (MF) which was against maintaining that in the case in question the payment of tax resulting from an annual settlement can be put off until 30 April, i.e. until the end of the PIT procedure. It was explained that this was not the intention in releasing the December advance from being paid on condition of filing a return. However, the minister of finance has not issued a general interpretation in this matter.

Not many keen on this

So far the problem has not concerned many taxpayers, because companies are not making mass use of the new right.

The MF does not keep statistics which could show what percentage of people entitled file annual returns by 20 January. Authorities subject to the ministry do not indicate such data either. The Tax Chamber in Warsaw carried out a survey for “Puls Biznesu” on the subject in several Warsaw tax offices. Great interest was not being shown there in the possibility of filing an annual PIT return by the deadline of the December advance settlements.

“The clear majority of those conducting business activity prepare their annual PIT return by 30 April. Returns filed by 20 January make up – depending on the tax office – between 0.4 and 2.4 per cent of all annual returns filed by such taxpayers. Neither has any growth trend been observed in relation to previous years,” says Anita Siedlecka, a specialist at the Warsaw Tax Chamber.

The number of January returns filed by the deadline for the December advance settlements has also been counted in the Tax Office in Zduńska Wola. Two years ago just under 1 per cent of persons authorised made use of this possibility. The percentage was the same a year ago.

“In about 60 per cent of those returns, the taxpayers showed overpayments of the annual tax,” says Andrzej Kukuła, deputy head of the Zduńska Wola office. No one is really checking to find the reasons why only a few people rush to settle their PIT by 20 January. Companies calculate advances in the amount of the difference in tax.