Slim VAT in Poland

SLIM VAT is a package of changes, the outline of which was presented on Thursday by the Polish Ministry of Finance. The main areas of the changes include simplification in invoicing, exporting and in exchange rates. The simplifications shall be implemented within the first months of 2021.

The SLIM (Simple, Local and Modern) VAT project introduces changes to VAT in four areas.

Simple invoicing

Credit notes
The formal condition of obtaining confirmation of receipt of a credit note by the buyer of the goods will be waived. The taxpayer will reduce the tax base and the VAT due already in the period of issuing the correcting invoice, provided that the documentation in his possession shows that he has agreed the terms of the transaction with the buyer of the goods or the recipient of the service.

Debit notes
The VAT Act will include provisions specifying the method of settlement of debit notes (increasing the tax base). So far, taxpayers have relied only on the interpretation and jurisprudence. This did not provide adequate legal certainty.
Now, the taxpayers will be sure of the correct method of settlement – it will be made on an ongoing basis in the period of issuing the debit note (due to reasons that arose after the sale).

Facilitations for exporters
In order to apply the 0% rate on the advance payment in the export of goods, the deadline to the actual export will be extended from 2 to 6 months.

Common exchange rates for VAT and CIT/PIT purposes
The taxpayer will be able to select for VAT the rules of currency conversion as for the income tax revenue. For example, a VAT taxpayer providing a B2B construction service currently uses two different rates (for VAT on the date before the invoice is issued, for PIT / CIT on the date before the service is provided). After the change of regulations, it will be able to set one common exchange rate for the settlement of transactions in VAT and PIT / CIT.

Other financial advantages

Extending the deadline for VAT deduction on an ongoing basis to four months.
The taxpayer will be able to include the input VAT from an invoice in a total of four months without the need to correct the VAT reports.

Deduction of VAT from invoices for the purchase of accommodation services for resale
The solution will make it possible to deduct VAT from the invoice for accommodation services purchased for the business client. In practice it means removing the deduction ban for taxpayers who purchase such services for the purpose of reselling them.

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