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Changes in VAT 2013 – Poland

VAT 2013 – the most important changes in the provisions :

1. Changes regarding tax liability

Beside few specific regulations, the tax liability will not arise at the moment of the issuance of the invoice. There will be a need to modify the accounting systems (different data recognition for VAT).

2. Changes regarding tax deductions

The right for tax deductions will not be as right now linked with the moment of receiving of an invoice, but with the moment of arising of a sellers tax liability. From this basic provision the exceptions are provided that enable to relate the moment when the taxpayer shall be entitled to deduct the amount of input tax with the moment of receiving the VAT invoice.

3. Changes regarding the VAT invoices

The Ministry of Finances is planning to transfer to the VAT 2013 Act the provisions relating to the invoices. Requirements will be reduced in relation to the content of the invoices and introduced the simplified invoices for sales the value of which is less than 450 PLN or 100 EUR (for price expressed in EUR). It is planned the liquidation of so called the internal invoices.

4. Changes regarding taxation rates (at exportation)

Application of 0% VAT rate shall be subject to receiving the document confirming the export of goods outside the EU (types of documents are specified in the amendment). Regarding advance payments the right to use 0% VAT rate is dependent on the export of goods within the two months from the end of the month the taxpayer has received the payment.

5. Intra-Community supply of goods and intra-Community acquisition of goods

Receiving of the whole or partial payment before the intra-Community supply or acquisition of goods shall not result in of the tax liability. The right to deduct the input tax in the intra-Community acquisition of goods shall be associated with possession of the original purchase invoice from the EU company.

There will be changes regarding the VAT registration in Poland of foreign companies.

6. Modification of the tax base definition

The tax base shall include received provisions, transportation fee, subsidies.

7. The correction invoices

In certain cases it will be possible to reduce the turnover despite the lack of receipt of the correction invoice (currently confirmation of the receipt of the corection invoice is still required).

8. Changes in the reverse charge mechanism

The project of a change in the Polish VAT Act means that there might be an additional condition that the supplier of the goods could not be registered as the active VAT payer on the territory of Poland in order to use a reverse charge mechanism.

This would mean that while maintaining the registration in Poland (which may be necessary for various reasons), there would not be opportunities for further application of reverse charge mechanism in Poland.

The current legal status is that the reverse mechanism procedure applies if the appropriate recipient or the recipient of the goods is a taxable person established in Poland. The delivery of goods of a foreign taxpayer (registered in Poland, but not having a permanent place of business or fixed establishment on the territory of Poland) which are carried out for the Polish taxpayers, are not taxed by the supplier, but the obligation to account for VAT is imposed on the purchaser.