Simplification of the rules of tax collection in the case of the so-called cashback in terms of the PIT and CIT Act


Reasons for changes in the PIT and CIT Acts

The government is working on a bill to amend the PIT and CIT Acts and some other acts. The main objective of the modification in this respect is, first of all, to clarify the existing uncertainties and to minimize the mechanisms of using the provisions of the applicable acts to avoid taxation. One of the changes is the simplification of the rules of tax collection in the case of the so-called cashback (moneyback)

Cashback (moneyback) - before the amendment to the PIT and CIT Acts

Currently, taxpayers' settlement of revenues from the so-called cashback or moneyback offered by banks is ambiguous, because the tax authorities recognize them as taxable income in accordance with Art. 20 paragraph 1 of the Personal Income Tax Act, and banks do not always agree with it.

In such a situation, financial sector entities should issue PIT-8C to clients to enable "Kowalski" to settle income in the annual tax return. However, in practice, banks do not do this, explaining that in their opinion it is the so-called bonus sale, subject to tax exemption, until it does not exceed the amount of PLN 760, as provided for in art. 21 sec. 1 point 68 of the PIT Act.

The consequence of such conduct is that taxpayers do not report income earned under moneyback (cashback).

Cashback (moneyback) - after changes in the PIT and CIT Act

The draft provides for cashback taxation with a flat tax rate, which will simplify settlements with the tax authorities and contribute to not concealing revenues. After the changes, the tax will be collected by the bank, which will thus become a tax payer. The tax rate will be 19%.