Force measure clauses
Coronavirus (causing COVID-19 disease) is an extremely contagious virus which has recently been declared a pandemic. On 12 March 2020, the Health Minister announced that a state of epidemic threat was about to be introduced in Poland. It is a legal tool introduced with respect to a specified area due to epidemic risk in order to allow the government to take certain statutory preventive measures. As a result, the Health Minister will be free to issue regulations imposing limitations on travel as well as sale and use of specified products, temporary restrictions on the operation of institutions and workplaces and bans on gatherings and public events.
Depending on the circumstances of the specific case, as a result of the state of epidemic threat, parties to a contract may be released from liability for defaulting on a contract. Legal commentators agree that certain events, so-called force majeure (vis maior) events, may serve as protection against a party’s liability for failure to perform an obligation or its inadequate performance. Force majeure does not justify every contract default. A party may seek relief under a force majeure clause only if the default is the consequence of circumstances of unforeseeable nature which were beyond the control of the parties involved.
Odds are that the government will announce a state of epidemic if the number of confirmed coronavirus cases continues to grow at the current rate. A state of epidemic is a legal tool introduced with respect to a specified area due to epidemic outbreak in order to allow the government to take certain statutory measures to combat the epidemic and mitigate its impact. If the state of epidemic is announced, a party defaulting on a contract may seek to be released from liability due to a force majeure event (e.g. an official ban on operation of office or commercial buildings or restrictions on export of certain goods). Moreover, the state of epidemic may serve as an additional reason to trigger the rebus sic stantibus clause stipulating that a contract may be amended where there has been a change of the circumstances in which the contract was made. In accordance with judicial decisions, such amendment will be permitted in the case of “circumstances which happen rarely, are unusual, extraordinary, but not necessarily a catastrophe. Natural disasters and epidemics may serve as an example (…).”
The coronavirus outbreak brings about a host of legal issues for businesses. Business owners would be well advised to verify contracts in terms of potential for modification of rules governing liability release and remain especially careful when executing new contracts. This will help them to avoid a situation where all of a sudden the contract cannot be performed (e.g. in case of recently made contracts, one will not be able to claim that a coronavirus epidemic is unforeseeable).
Coronavirus emergency act regarding tax issues
The Ministry of Development is working on a coronavirus emergency bill (in Polish: specustawa) which is to head to the Sejm on 25 March 2020. It is expected to enter into force on 1 April 2020.
The Development Ministry’s changes and proposals regarding taxes:
• change of the effective date of the so-called sugar tax (late 2020) and the new unified control file for VAT purposes (JPK VAT) for “large” taxpayers (1 July 2020);
• measures to facilitate accounting for VAT and split payment;
• early VAT refunds;
• retroactive deduction of losses incurred in 2020;
• option to deduct from taxes cancelled travel expenses for businesses affected by the coronavirus crisis;
• abolishment of tax rescheduling fee.
The Finance Ministry encourages taxpayers to use online services and contact public institutions through e-PUAP platform or helplines. Restricted availability of tax offices is also anticipated.
Applicable social security regulations
Subject to certain conditions which may apply also in the case of the coronavirus outbreak, applicable social security regulations may allow insurance holders to:
• reschedule the payment of social security contributions which are not due yet;
• pay overdue social security contributions in installments;
• write off debt resulting from social security contributions.
The first coronavirus emergency act
On 8 March 2020, the first coronavirus emergency act was signed into law. It introduced a number of special measures regarding the spread of the coronavirus, incl.:
• the option for employers to instruct employees to work from home;
• additional child care allowance for parents forced to look after a child under 8 years old due to the closure of a nursery, a kindergarten or a school;
• the option to purchase goods and services necessary to counteract the coronavirus without adhering to the public procurement regulations;
• the option to design, develop, redevelop, maintain and demolish buildings (and change the permitted use of them) in order to counteract the coronavirus without adhering to certain building regulations.
Please do not hesitate to contact us if you need more information on the topics discussed above.
Company law
Marek Wojnar
Attorney-at-law / Managing Partner
+48 22 420 59 59
marek.wojnar@actlegal-bsww.com
Taxes
Małgorzata Wąsowska
Head of Tax Practice / Tax Advisor / Partner
+48 22 420 59 59
malgorzata.wasowska@actlegal-bsww.com
Labor law
Ewa Bieniak
Legal counsel / of Counsel
+48 22 420 59 59
ewa.bieniak@actlegal-bsww.com