VAT changes in Poland as from January 2021 – SLIM VAT

On the 01st of January 20201 new VAT rules came into force. The package of changes is called SLIM VAT and focuses on the below points:

1) Simplifications regarding credit notes.

According to the VAT rules in Poland from the 01st of January 2021 the rules have been changed; the formal condition of obtaining confirmation of receipt of a credit note by the buyer of the goods have been waived. The taxpayer will reduce the tax base and the VAT due already in the period of issuing credit note, provided that the documentation confirming that the conditions for the reduction in the taxable basis have been agreed with the purchaser, these conditions have been met, and the credit note properly reflects these conditions.

Unfortunately, the new regulations are unclear and imprecise. In particular, there are doubts as to what documentation is required in specific situations where the VAT base is reduced.

The transitional provisions enable taxpayers to apply the hitherto rules for credit notes (i.e. based on a confirmation of correction invoice receipt by the buyer) throughout 2021. If this option is chosen, the seller and the buyer need to conclude a relevant agreement in writing, which must be signed before the first correction invoice is issued in 2021.

2) Facilitations for exporters.

Regarding documents related to the export transactions, the IE599 document (the document confirming the export transaction in order to apply 0% VAT rate) was required in maximum two months after the last day of the month when the delivery took place. Since 1st of January in order to apply 0% VAT rate for export transactions the time to provide the IC599 document is extended to 6 months.

3) Consistent exchange rates.

From the end of 2020, the exchange rate date for VAT purposes could be different than the exchange rate date for CIT purposes. Since 1st of January the exchange rate date for VAT purposes can be the same as the date for CIT purposes (the working day preceding the date of sale/service performance). If the taxpayer chooses using the same exchange rate for VAT and CIT purposes he is obliged to use it for a latest 12 months counting from the month of choosing this method.

4) Benefits in deduction of VAT – deduction of VAT in the case of purchasing accommodation services for the purpose of resale.

From 1st of January the deduction of VAT in the case of purchasing accommodation services for the purpose of resale is possible. It was not possible in the past.

5) Extended deadline for deducting input VAT up to 4 periods in total (for monthly settlements).

By the end of 2020, the deduction of input VAT related to the purchase transactions was possible in the month when the transaction took place and in the next two months (3 months in total). After the changes in the VAT Act from 2021 the time for deducting the input VAT is extended by 1 month.

Regarding quarterly settlements nothing has changed.

6) Gifts of small value up to 20 PLN.

From 2021 the upper limit for gifts of small value has been raised from 10 PLN up to 20 PLN.

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