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Sustainable development goals for Poland

The program is based on 17 Sustainable Development Goals (SDGs), which identify and describe a wide range of challenges our world is facing today. From fighting poverty and famine through making quality education, clean drinking water and sanitation accessible for all, through battling climate change and protecting all life on earth, all the way to guarding peace and justice, the targets are nothing short of intimidating. However, through strengthening the bonds amongst its member state, the UN is determined to meet them.

From a strictly organizational perspective, the implementation of Agenda 2030 requires universal involvement of governments or international organizations, the private sector, and civil society, as well as research and education centers. A large variety of institutions are encouraged to integrate the Sustainable Development Goals into their strategies, business models and operational activities.

Key aspects of Agenda 2030 for organizations:

• Introduction of Sustainable Development Goals – Organizations should analyze how their operations contribute to the SDGs and identify areas where they can make the greatest difference, be it through minimizing the negative impact of their activity or maximizing its positive effects.
• Innovation and sustainability – Enterprises should introduce new solutions for products, services, business processes and business models, so that they may contribute to creating a sustainable future.
• Cooperation – As achieving the goals requires strong cooperation across all sectors, organizations should seek to work with governments, NGOs, academic institutions and other businesses to exchange experiences, resources, and knowledge.
• Transparency and reporting – Organizations are encouraged to build transparency and report on their progress toward sustainability goals. Sustainability reporting not only helps monitor progress, but also builds stakeholder trust.
• Stakeholder engagement – Companies need to engage employees, customers, suppliers, and local communities in the conversation on sustainability and joint efforts to achieve goals.

As environmental and social issues gain more public awareness, market leaders and investors are starting to look beyond short-term financial gain. The aftermath of natural disasters, social discontent and economic inequality paint a gloomy picture of our future, but there is potential and hope to be found in our solidarity against these struggles. The only solution to bring companies closer to stability and long-term growth is to take responsibility for their share of damage done to the environment and concentrate efforts to alleviate its consequences.

Sustainability indicators – what are they?

This system of ratings serves as an informational and diagnostic tool that helps direct social, economic, and environmental activity at various administrative levels, from local to national. Sustainability scoring aims to facilitate supervision of how local, regional, national, and EU authorities , as well as enterprises, implement provisions in various strategic documents, such as plans, programs, or policies.

Types of sustainability indicators

These metrics can be divided into several categories, according to the four main dimensions of the idea of sustainability:

• Social – focusing on improving the quality of life of citizens, ensuring social equality, and promoting cohesion. They consider public health, education, demographic change, public security, and social integration, among others.
• Economic – focusing on promoting sustainable economic growth that supports universal welfare while minimizing negative environmental impacts and ensuring equitable distribution of profits. Indicators in this category include gross domestic product (GDP) per capita, level of public debt, labor market indicators, innovation, and transportation, among others.
• Environmental – concerning the protection of natural ecosystems and the promotion of sustainable resource management practices. Indicators in this category regard greenhouse gas emissions, freshwater resources, land use, waste management or biodiversity conservation, among others.
• Institutional-political – these include global partnerships, cohesion and efficiency policies, openness and participation, and citizen engagement.

One goal of Poland’s Sustainable Development Strategy is to optimise the exploitation of raw materials, fuels and natural resources , ensure territorial security and environmental protection. Another of its objectives is to preserve national sovereignty, provide universal health care and social welfare, as well as compliance with existing legal system.

ESRS

The cross-cutting standards, regardless of sector, were adopted in July 2023 with the sector and third-country standards set to follow less than a year later, in June 2024. However, since October of last year, the legislators have been debating delaying these requirements by a few years.

With this most recent compromise, the new standards are expected by 30 June 2026, though the MEPs requested the publication of the standards as soon as they are ready, ideally long before the deadline. This is given to allow more time to develop these specific standards and focus on applying the universal requirements without overburdening companies with obligations.

One way to achieve this objective [of boosting European competitiveness] is to reduce the administrative burden on companies. Today’s agreement limits reporting requirements to the minimum and gives companies time to implement the ESRS and prepare for the sectorial European Sustainability Reporting Standards.

Vincent Van Peteghem, Belgian Deputy Prime Minister and Minister of Finance

Despite this delay, the third-country companies operating in the EU will still be required to report in 2028, as established in the original CSRD. Other firms, including large EU listed and non-listed companies, will be reporting earlier than this, starting in January 2025 for 2024 data.

This decision now needs to be officially adopted by both institutions.

Sources:

– Council of the EU, Press Release, 7 Feb 24
– Mark Segal, ESG Today, 24 Jan 24

VAT rate changes

In this blog post, we will delve into the world of ESG ratings and understand why they matter for companies and investors alike. The beginning of a new year often brings changes to various tax laws and policies around the world, and 2024 will be no exception. Effective January 1, 2024, a number of countries will introduce changes to their Value Added Tax (VAT) or GST rates which you need to know to stay compliant. These changes are driven by a variety of factors, including the desire to simplify the VAT system, promote economic growth or support certain economic sectors.

Czech Republic

On November 22, 2023, the Czech Republic’s President endorsed a budget law unifying the reduced rates of 15% and 10% into a singular reduced rate of 12%, effective January 1, 2024.

Estonia

The Estonian Parliament, on June 16, 2023, approved legislation raising the standard VAT rate from 20% to 22%, taking effect on January 1, 2024. Furthermore, commencing January 1, 2025, reduced VAT rates for both printed and electronic press publications will increase from 5% to 9%, while rates for accommodation services will elevate from 9% to 13%.

Luxembourg

The temporary 1% VAT rate deduction on standard and reduced rates, established by the Law of October 26, 2022, will expire at the year’s end. From January 1, 2024, the rates will revert to 17%, 14%, and 8%, respectively.

Switzerland and Liechtenstein

Following a September 25, 2022, referendum, Switzerland decided to raise VAT rates from January 1, 2024. The standard rate will climb from 7.7% to 8.1%, the reduced rate from 2.5% to 2.6%, and the special rate for accommodation services from 3.7% to 3.8%. These adjustments will also be applicable in Liechtenstein due to the shared VAT system.

Consolidation of reduced VAT rates

Alongside this consolidation, the legislation entails the elimination of 22 tax exemptions, the imposition of restrictions on employee benefit deductions, and adjustments to excise taxes and taxes related to gambling activities. The standard VAT rate will remain steady at 21%.

Supplies subject to the 21% standard rate include:

• Alcohol
• Draft beer
• Services like hairdressing

Supplies moving to the new 12% VAT rate include:

• Essential foods
• Printed magazines and journals
• Newspapers
• Medicines
• Housing

Books, currently taxed at 10%, will be exempt from VAT.

Invoicing guideline

The guideline update focuses on:

• Information on quantity and scope. By specifying the quantity of goods is understood that the invoice must contain information about the exact number of goods delivered. In terms of scope of services, it is required to report on how much of each service was performed by the seller. To enter this information, you can provide the total time that was required to complete a specific service (the number of hours).
• The nature of the goods or services. This requirement means that the invoice must contain a description with sufficient detail to identify the type of goods or services that were provided or delivered. This description does not have to be exhaustive, but it must be sufficiently detailed. Please find below some examples that will help you understand what a sufficient description means. In the case of goods, it must include a trade description or the name of the goods. In the case of services, the type of services provided should be sufficient, as long as the description does not cover a wide range of services. This applies, for example, to “legal services” or “consulting services.” In those cases, the services provided must be described in more detail.

You can find more information in the official guidelines here.

Understanding Steuernummer

The Steuernummer, often translated as a “tax number,” is a unique identification number assigned by the local tax office (Finanzamt) to individuals and businesses for taxation purposes. This number helps tax authorities track and manage income tax, trade tax, and other local taxes. The Steuernummer is used primarily for domestic tax-related matters and is assigned by the local tax office where the individual or business is registered.

Understanding VAT ID Number (USt-IdNr)

The VAT ID number, known as “Umsatzsteuer-Identifikationsnummer” (USt-IdNr) in German, is distinct from the Steuernummer. It is a unique identifier assigned to businesses engaged in cross-border trade within the European Union (EU). The USt-IdNr is used for VAT-related transactions and interactions between businesses across EU member states.

Key differences:

Scope of use

• Steuernummer: Used for domestic tax purposes within Germany, including income tax and trade tax.
• USt-IdNr: Primarily used for cross-border transactions within the EU, enabling businesses to trade goods and services without charging VAT.

Cross-Border Relevance

• Steuernummer: Generally not used in cross-border trade; it applies to national taxation matters.
• USt-IdNr: Essential for businesses engaged in cross-border trade within the EU to ensure proper VAT treatment.

Issuing Authority

• Steuernummer: Issued by the local tax office where the individual or business is registered.
• USt-IdNr: Assigned by the Federal Central Tax Office (Bundeszentralamt für Steuern) in Germany.

Purpose

• Steuernummer: Facilitates domestic tax assessment and liability determination.
• USt-IdNr: Enables businesses to engage in cross-border trade with VAT exemptions under the reverse charge mechanism.

What is import of services from EU countries?

Businesses working with customers abroad are required to include a reverse charge clause on the invoice. The reverse charge mechanism is nothing more than the transfer of VAT liability from the seller to the buyer. This means that the buyer, who is an active VAT taxpayer, charges tax on such transactions. This may later be deducted, as the customer receives an invoice documenting the import of services from the European Union.

According to Article 2(9) of the VAT Act, import of services is defined as a transaction where:

• the buyer is a natural person engaged in business activity or a legal person who has a registered office or a permanent place of business in Poland,
• the taxpayer has a registered office or permanent place of business in Poland and purchases services from a taxpayer whose registered office or permanent place of business is located outside Poland,
• the services are supplied in the country where the buyer’s registered office is located (Article 28b. of the VAT Act),
• the service is not subject to separate regulations that would indicate tax obligations in the supplier’s country.

When does tax liability arise on import of services? At the time the service is performed. This means that the purchase of services from a taxpayer from another member state constitutes obligation to report import of services on the invoice received, and charging VAT in Poland, at the rate established for the service.

Note that an invoice with a reverse charge annotation must be shown in the JPK_V7 file (on the output and input tax side) in the same accounting period in which the tax liability for importing services from the EU arose. The invoice must include the VAT number of the issuing taxpayer (with “PL” prefix), as well as the tax identification number of the buyer (with their corresponding country prefix).

The EU VAT directive and reverse charge

The VAT Directive applies to all member states – each of them is obliged to implement its provisions. The European legal act in many places leaves freedom for national legislators to choose certain VAT solutions, but all EU countries are obliged to apply the same rules on fundamental matters. Accordingly, countries such as Belgium, France, and Italy have introduced reverse charge for goods and services. By contrast, in Germany, Austria, Denmark, Hungary and Lithuania, the taxpayer for domestic supplies is the seller, who should register for VAT in the country and issue an appropriate invoice.

Unique document code – ATCUD

With this policy, the informal economy, fraud, and tax evasion are intended to be reduced and the communication of invoices and taxpayer transactions improved.
All Portuguese companies (or companies registered for Portuguese VAT) producing electronic invoices will need to modify their systems to comply with the new legal standards.

The document code ATCUD must be included on invoices and tax documents.
Regardless of the method, including both electronic and printed invoices, in which they are provided to the customer, ATCUD codes must be readable. Only paper invoices and PDFs with signed signatures will display the QR code.

The ATCUD code must appear on each page of documents that have multiple pages. Either the first or last page can have the QR code.

If you need support in that matter, feel free to contact one of our experts.