Tax treatment of assistance for Ukrainian citizens is to have retroactive effects as of 24 February 2022. The relevant provisions are laid down in:

  • Ukrainian Citizens War-Related Assistance Bill (“Bill”) which is past its second reading in the Sejm, and
  • the Finance Minister regulation of 3 March 2022 to amend the regulation on the goods and services for which the goods and services tax rates are reduced, and the applicability of reduced rates (“Regulation”).

The Regulation introduces the zero rate of VAT on supplies of goods and services made for no consideration in order to assist victims of the war in Ukraine; the supplies meant are those made to the Government Strategic Reserves Agency, local authorities or healthcare entities (as defined in Article 4(1) of the Healthcare Activities Act of 15 April 2011) between 24 February 2022 and 30 June 2022, on condition there is a written contract between the supplier and the relevant recipient.

The Bill seeks to introduce a series of amendments, including in tax regulations, to facilitate assistance for Ukrainian citizens and confer privileges on those that provide such assistance. Some of the privileges are listed below:

  • Gits made in support of Ukraine war victims will be deductible from tax on condition they are documented and provided to public benefit organisations.
  • A deduction from income will be available for the manufacture or purchase cost of property or rights donated between 24 February 2022 and 31 December 2022 for mitigation of the consequences of the war in Ukraine, provided the donations are made to relevant recipients, including local authorities, the Government Strategic Reserves Agency, and entities carrying out healthcare activities or providing emergency medical services in Poland or Ukraine, unless such cost has earlier been deducted via tax depreciation or amortisation. At the same time, the recipients of such donations will not be deemed to earn taxable income on them, whether for PIT or CIT purposes.
  • There will be a gifts and inheritance tax exemption available for property and rights acquired between 24 February 2022 and 31 December 2022 by way of gift or donor instructions by Ukrainian citizens (individuals) who arrived in Poland from Ukraine during that time as a result of the pending war.
  • Income tax exemption will be available for humanitarian aid (e.g. provision of accommodation or food) received between 24 February 2022 and 31 December 2022 by Ukrainian citizens (individuals) who arrived in Poland from Ukraine during that time as a result of the pending war, provided they are taxpayers.
  • Polish visas for Ukrainian citizens which would expire on or after 24 February 2022 will be extended by operation of law until 31 December 2022.
  • There will be fewer formalities for Ukrainian citizens to be hired or obtain a PESEL number.
  • Ukrainian citizens remaining legally in Poland will be entitled to certain benefits, including family benefits, childraising benefit, and “good start” benefit.

If this issue pertains to your business and you are interested in our assistance, please  contact us.

This blog post is provided for general information purposes to keep you up-to-date with changes in tax law, tax rulings by authorities, case law of courts and interesting commentaries. Doradztwo Podatkowe WTS&SAJA shall not be held legally liable for any acts or omissions resulting from reliance on such information.