NEWSLETTER - February 2013 www.wbwlegal.pl
Dear Readers,

We are happy to present you the February issue of our newsletter.

We particularly recommend the article regarding the possibility to exercise a jurisdiction clause included in a contract with regard to an entity which is not the party to the contract which provides for such a clause. This matter was decided by the Court of Justice of the European Union in a case of 7 February 2013.  

Moreover, you will find information on the remission of social security contributions and the new regulations regarding the issuance of VAT invoices which came into force at the beginning of 2013.

One of our articles also discusses the most vital provisions of the new act on pay periods in business transactions passed by the Sejm on 8 February 2013.
   
We wish you a pleasant read.

WBW Team

Chains of successive contracts and the jurisdiction clause

At present, many contracts for sale concluded between parties with their official seat or a place of residence in different European Union member states. In such agreements one can often find the co-called jurisdiction clause, which determines a court of local jurisdiction where any disputes arising out of the contract are to be settled. The arrangements between the parties in this respect help them to escape the general rule of litigation, i.e.  the rule which states that disputes should be resolved in a court of local jurisdiction for the seat or place of residence of the defendant, and introduce the contractual jurisdiction as agreed by the parties.  In a situation where the initial buyer sells an item to another buyer, and the latter sells it to yet another buyer, where each participant of this “chain of successive contracts” has its seat or place of residence in a different EU country, the application of the jurisdiction clause becomes ambiguous. The problem appears in a situation where a subsequent buyer wants to take a legal action against the very first seller (usually the manufacturer) on account of, for example, a defective product. Does such buyer purchaser have the right to exercise the jurisdiction clause included in the very first agreement which he or she was not the party to or which concerns the same product?  

The Court of Justice of the European Union answered this question in the judgment of 7 February 2013 (case C-543/10). The Court stated that the jurisdiction clause applies only in a situation where both parties have expressly agreed to this, whereas in a situation where the party that wishes to take a legal action is a sub-buyer of a product, it cannot be assumed that the jurisdiction clause was concluded between this sub-buyer and the original seller since there is no contractual relationship between these parties. Therefore, exercising the jurisdiction clause is acceptable only in a situation when it is established that the sub-buyer knew about the jurisdiction clause in the contract between the initial seller and the initial buyer and has given his consent to that clause.      

The above-mentioned judgment means that in order for the jurisdiction clause to apply in each contract which is part of a chain, the said clause should, just in case, be included in each and every successive contract.

Daria Pawelczak, trainee solicitor


Social insurance contribution amnesty

On 15 January 2013, the act of 9 November 2012 on remission of contribution payables by individuals conducting business activity (Journal of Laws of 31 December 2012 item 1551; hereinafter: „act on remission of social insurance contributions”) came into effect.

The remission concerns the period between 1 January 1999 and 28 February 2009 and it involves persons covered with compulsory pension insurance and compulsory disability insurance as well as compulsory work accident insurance on account of the business activity they conduct, i.e.:
1. persons running business outside of agriculture under general provisions on business activity or other specific provisions;
2. artists and authors;
3. freelancers conducting their professional activity within the understanding of the law on flat-rate personal income tax on selected incomes earned by individuals or who derive their income from business activity within the understanding of the law on personal income tax;
4. shareholders of single-person limited liability companies as well as partners in a general partnership, limited partnership and limited liability partnership;

The act introduces two categories of persons who can apply for remission of outstanding contributions. The first category includes people who stopped conducting business activity before 1 September 2012 and do not conduct it on the day of granting the decision on terms and conditions of remission. The remaining persons fall into the second category.

As far as the persons belonging to the second category are concerned, the decision on terms and conditions of remission or on denial of remission may only be issued upon announcing by the European Commission the decision whether remission of outstanding contributions constitutes public aid within the meaning of the Treaty on the functioning of the European Union.  

Under the new regulation, the persons covered in the above-mentioned period with compulsory pension insurance and compulsory disability insurance as well as compulsory work accident insurance on account of the activities mentioned above will be eligible to apply for remission of outstanding contributions in the scope of these types of insurance as well as default interest and other costs (including enforcement fees and charges) for the period between 1 January 1999 and 28 February 2009. The application for remission may be filed within 24 months following the date on which the act came into effect.

The Social Insurance Institution (ZUS) will decide on granting (or denial) the remission by way of a decision. In order to be granted the remission, the person should meet the following conditions:
1. as on the date of the decision on the remission the person has no debts which are not subject to remission (i.e. for example contributions for employees which should be paid from the contribution payer’s own resources) except for contributions due for the period before 1 January 1999, or
2. the person has paid off all debts which are not subject to remission  (i.e. for example contributions for employees which should be paid from the contribution payer’s own resources), default interest and other costs (including enforcement fees and charges) within 12 months following the date on which the decision determining the terms and conditions  of remission becomes final; this condition will also be met in the case when, within 12 months following the date on which the decision determining the terms and conditions  of remission becomes final, the debts which are not subject to remission are divided into installments or the payment is deferred – under the provisions of the act on the social insurance system;   

In accordance with art. 2 of the act on remission of social insurance contributions, the application for remission can also be filed by beneficiaries or third parties, if ZUS has granted a decision on their liability for debts on account of such contributions.    

The remission of compulsory pension insurance and compulsory disability insurance as well as compulsory work accident insurance contributions results in the remission of health insurance and labour fund contribution for the same period. However, one should bear in mind that in case of remission of pension insurance and disability insurance contributions made by ZUS, the period for which the contributions have been remitted shall not be taken into account when establishing the right to and the amount of retirement pension and disability pension paid from social security fund and that the amount of remitted contributions shall not be included in the pension assessment basis.

Przemyslaw Jakubowski, legal advisor trainee


Changes in issuing VAT invoices

As of 1 January 2013, regulations of the directive of the Minister of Finance concerning tax refund for some taxpayers, invoice issuing, invoice keeping and the list of goods and services to which the exemption from VAT tax is not applicable changed (Journal of Laws of 2012, item 1428).

One of the most significant changes that have been introduced by the legislator is a possibility of issuing statement invoices. This should be good news especially for those taxpayers who within one calendar month make several separate deliveries of goods or services to one entity.

In accordance with the newly adopted regulations if a taxpayer in a given calendar month e.g. in June makes four separate deliveries to an entity A e.g. 6 June, 11 June, 17 June and 28 June, they can issue only one invoice instead of four separate ones. In order to be eligible for this option, the invoice which includes delivery of goods and services to the entity A must be issued by the end of the calendar year in which they were made i.e. in the case described by 30 June.

The amendment of the aforementioned directive of the Council of Ministers introduces a number of other changes concerning invoice issuing.  In accordance with the newly amended § 16 of the directive, as of 1 January 2013, active VAT taxpayers do not issue “VAT invoice” but just “Invoice”. Since the beginning of 2013 there is no requirement to issue an original and a copy of an invoice – the amended § 19 of the directive of the Council of Ministers points out that any invoice is issued in two copies; one for a purchaser and the other for a taxpayer who is a seller.

Przemyslaw Jakubowski, legal advisor trainee


A new act on pay period in sale transactions

On 8 February 2013, the Sejm passed a bill on pay period in sale transactions, which is to replace the currently binding act of 12 June 2003 on pay periods in sale transactions (Journal of Laws No. 139, item 1323 as amended).  The amendment aims at disciplining debtors and improving financial liquidity of companies and, as a result, leading to improvement of safety of business trading.

The amendment introduces a rule according to which a pay period stated in the agreement between the parties should not exceed 60 days from the delivery of invoice or a bill to the debtor confirming service provision unless the parties state otherwise. However, if a pay period agreed in an agreement which is longer than 60 days, counted from the delivery day of an invoice or a bill to the debtor, is contradictory to a social and economic purpose of an agreement and is not objectively justified, taking into account the characteristics of goods and services, after 60 days a creditor is eligible for overdue interest in the amount of interest charges calculated under art. 56 § 1 of the act of 29 August 1997 – Tax ordinance, provided that he/she has fulfilled their service.

Another novelty introduced by the act is periods required to conduct the procedure of goods verification. Namely, if parties of a business transaction provided for verification of a product or service or such verification is applicable by other acts, the period required for such verification as stated in the act cannot be contradictory to social and economic purpose or principles of community life and ought to be objectively justified, taking into account the characteristics of a product or service and cannot exceed 30 days, counted from the date of the reception of the product or service.

Another change beneficial for creditors is compensation for the expenses of debt recovery. It will be a set amount of 40 euro converted into PLN. In case the costs of debt recovery incurred by the creditor due to a delay in payment exceed this amount, the creditor is eligible for a refund of all the incurred expenses.

Katarzyna Bor, legal advisor trainee



This Newsletter is for general informational purposes only. It is not intended and shall not be treated as professional advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.

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