In the Sejm, work is underway to amend the Act on Upbringing in Sobriety and Counteracting Alcoholism, and the Act on Administrative Enforcement Proceedings (hereinafter “the Act”).
The changes are aimed at optimizing:
- a fee payment system for advertising alcoholic beverages;
- the efficiency of taxpayers’ compliance with the obligations imposed on them;
- conditions enabling effective collection of fees for advertising alcoholic beverages by tax offices.
Amendments to the Act, according to the initial contents of the draft, are to become effective on 1 July 2020 (however, due to the state of epidemic, it cannot be excluded that the adoption of amendments and their entry into force may be delayed).
Advertising of alcoholic beverages
Pursuant to the provisions of the Act of 26 October 1982 on Upbringing in Sobriety and Counteracting Alcoholism (as amended), there is a general rule prohibiting the advertisement and promotion of alcoholic beverages in the country, except for beer, the advertisement and promotion of which is allowed, provided that the specified conditions listed in the Act are met (such conditions include requirement that the advertisement is not targeted at minors, does not involve minors, and does not encourage excessive alcohol consumption).
Advertising of alcoholic beverages involves the public dissemination of trademarks of alcoholic beverages or graphic symbols associated with them, as well as the names and visual symbols of entrepreneurs producing alcoholic beverages, which are used to promote trademarks of alcoholic beverages.
Advertising fee – current rules
Pursuant to the provisions currently in force, entities providing services in the field of advertising of alcoholic beverages pay to the account of the minister competent for physical culture a fee of 10% of the tax base on goods and services resulting from these services.
Entities providing advertising services for alcoholic beverages are required to draw up a monthly joint statement regarding the fee and submit it, by the 20th day of the month immediately following the month in which they were required to issue an invoice for advertising services, to the competent tax office, to which these entities normally file returns concerning the goods and services tax.
The receipts from the fee constitute the revenue of the Sports Activities Fund for Students, which is supervised by the minister competent for physical culture.
Based on the justification memorandum attached to the draft amendment to the Act, the fact that currently fees for advertising alcoholic beverages are paid to the account of one entity (minister competent for physical culture), while the declaration related to the payment of fees is submitted to another entity (head of the tax office), adversely affects the effectiveness of the fee payment system.
What changes can the market expect?
The amount of the fee for advertising alcoholic beverages remains unchanged (10% of the tax base on goods and services resulting from the advertising service), but the manner of its payment will be modified.
Entities providing services in the field of advertising alcoholic beverages will pay the fee to the account of the competent tax office (and not to the account of the minister competent for physical culture as before).
The proposed changes also apply to recovery of fees for advertising alcoholic beverages. Tax authorities will be able to verify the implementation of taxpayers’ obligations in the scope of paying fees for advertising of alcoholic beverages, e.g. as part of their conducted tax audits.
In addition, the provisions on administrative enforcement proceedings will apply to the collection of unpaid fees for advertising alcoholic beverages. In practice, this will enable tax authorities to collect fees in a manner similar to that applied to tax liabilities.
How can we be of help?
Our Law Firm provides comprehensive consultancy services for entrepreneurs, with particular emphasis on regulatory issues as well as civil and administrative proceedings. We are experienced in representing entrepreneurs before administrative bodies, including proceedings regarding public obligations and levies, as well as disputes before administrative courts. We design and implement internal compliance procedures aimed at avoiding legal risks and ensuring compliance of enterprises with legal provisions. In case we identify any violations, we deal with them through an ad hoc “emergency response”.
We combine our experience with knowledge of the specific conditions governing the alcoholic beverages sector, as well as the media and advertising sectors.
In view to the upcoming amendments to the Act on Upbringing in Sobriety and Counteracting Alcoholism, we offer support to our clients in all matters related to the adjustment of their activities to new regulatory provisions.
Please do not hesitate to contact us if you are interested in our services in the above scope, or support in any regulatory or contractual matters regarding the alcoholic beverage market, media sector, and/or advertising market.
The information included in this publication is general and does not relate to the situation of a particular company. Due to the rapidity of changes in the Polish legislation, please make sure, on the day of reading this publication, that the information included therein is still current. Before making any concrete decisions, we would recommend consulting them with our advisers.