Tag: vat

As from 1st of July 2018 new Polish VAT regulation implementing a mechanism called split payment will come into force. The mechanism of split VAT payment was introduced by the Act of 15.12.2017 on the amendment of the Act of tax on goods and services and certain other acts.

Split payment is another tool thats task is to seal the Polish VAT system. Although its use is to be voluntary, this mechanism arouses taxpayers’ anxiety.

The mechanism of split payment is based on the fact that the payment made by the buyer to the seller for the purchased services or goods is not done in one gross amount as it has been so far, but in two amounts, separately on two accounts of the seller, i.e .:

• the amount of net receivables – to any account specified by the seller,
• tax amount – to a dedicated account intended for the purposes of tax settlement (VAT account), while access to funds accumulated on this account will be limited.

The freedom to dispose of funds accumulated on the VAT account will be limited. By assumption, a taxpayer who has certain resources there will use them to pay his tax liability for VAT. In the case that their tax liability is lower than the amount accumulated on the VAT account, they will be able to apply to the head of the tax office for a refund of the whole or a part of this amount to a regular account with the bank. The tax authority will have as many as 60 days to issue a decision on the consent for a such refund and it will be able to decline the refund in justified cases. It will be possible to appeal against the decision mentioned above, as it is possible to appeal against any decision made by the tax authority.

The split payment mechanism will only apply to settlements between VAT taxpayers. Moreover, it is worth noting that the mechanism of split VAT payment can be used only in settlements carried out by transfers in PLN, regardless of the amount due. It will not be used for cash payments and foreign currencies.

The mechanism of split payment is not obligatory, but the legislator has provided a number of incentives to persuade taxpayers to use this form of settlement.

The introduction of a split payment mechanism will be completely new in the Polish tax on goods and services to which taxpayers will have to get used to. Despite the lack of the obligation to use it, it is the intention of the legislator to make it universal, which is to be encouraged by the system of incentives. Incidentally, it is worth mentioning that there are already voices about the necessity to introduce the obligation to use the split payment mechanism, at least in relation to some types of transactions (specifically those in relation to which the reverse charge rule for domestic transactions is currently applied).

The details of the changes are available at this link: http://prawo.sejm.gov.pl/isap.nsf/download.xsp/WDU20180000062/O/D20180062.pdf

Unfortunately, the content is available only in Polish.

Last updated: 12.06.2018

The Standard VAT return is one of the key proposition of European Commission in order to reduce bureaucracy and improve tax compliance in the European Union. A report published by the European Commission proposal provides for, among others, creation of a single EU-wide set of requirements that companies should meet in respect of the VAT return. Businesses would have to submit the VAT monthly, while a micro companies only quarterly. Proposed is the abolition of the obligation to submit EC sales lists. An important simplification will be electronic system of submitting the returns.

For more information please also visit:

http://ec.europa.eu/commission_2010-2014/semeta/headlines/news/2014/02/20140227_en.htm

http://europa.eu/rapid/press-release_IP-13-988_en.htm

Currently, the month of the right to deduct an amount of VAT contained in an invoice or in a custom document arise in the month in which the taxpayer receives such a document.

Beginning from January 2014 according to a general rule it will be the month in which the tax point arose in the relation to bought goods and services. (more…)

Invoices: exchange rates.

In case of invoices issued after the supply of goods or services / receiving the prepayment taxpayer shall apply the average exchange rate of the National Bank of Poland from the last business day preceding the date of supply of goods or services / receiving the prepayment. In case of invoices issued before the supply of goods or services / receiving the prepayment taxpayer shall apply the average exchange rate of the National Bank of Poland from the last business day preceding the date of invoice.

Changes in the polish VAT in 2014 will include among others changes in issuing the invoices.

 
In case where the invoice date differs from the date of supply of goods/services, the invoice should include, besides the invoice date, the date of supply of goods/services.

 
Moreover, according to the new art. 106i par. 1 of the Polish VAT act, the invoice shall be issued no later than 15 day of the month following the month in which the supply of goods or services has been made/prepayment has been received.

Furthermore according to article 106i paragraph 7 of the VAT act specify the date, with which the invoice may be issued the earliest by defining it as not earlier than 30 days before:
 

• the delivery of the goods or performance of the services,
• prior to receiving of all or part of the payment for the delivery or the service.

President Bronisław Komorowski signed on December 27th 2012 the two important for the taxpayers tax amendments: VAT Act amendment and Tonnage Tax Act amendment. Some of the provisions will come into force in the beginning of 2013, and some of them (such as the moment of tax point/tax liability) will come into force at the beginning of 2014.

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Currently the definition of fixed establishment defined in the provisions of Article 11 of Council Implementing Regulation (EU) No. 282/2011 describes “fixed establishment” for VAT purposes as any establishment, other than the place of establishment of a business, characterized by a sufficient degree of permanence and a suitable structure in terms of human and technical resources to enable it to receive and use the services supplied to it for the needs of the fixed establishment.

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Answering directly – Yes, VAT needs to be submitted in Poland through tax agent when the company has its fixed establishment outside EU. INTERTAX also sends data to the tax office electronically however we are using a dedicated commercial software to be sure that all tax requirements have been met. There is a possibility to send the VAT returns online via electronic forms provided by the tax office, however this forms are very poor and could lead to incorrect VAT return calculation. 

In order to deem the given supply as the intra-Community supply certain conditions have to be met (Article 13 of the Polish VAT Act). One of the conditions is that the delivery has to comply with the provisions of the article 7 of the VAT Act. In this case the conditions should be met by the acqirer of the goods. (more…)

VAT compliance cover all activities with a view for correct settlement of VAT for given period.

An example list of activities is following:

• Gathering documents confirming transactions under the Polish VAT,
• Checking of correctness of the above documents and transactions,
• Entering data to the VAT registries,
• Calculating the VAT return and the EC sales lists (in case if there are sales from Poland to other EU countries),
• Submitting VAT returns and EC sales Lists to the tax office.

Submission of VAT returns takes place in monthly or quarterly cycles.