The SLIM VAT package
The Ministry of Finance, in the presented draft, proposed changes to the so-called SLIM VAT package (Simple Local and Modern VAT). According to the authors of the draft, they are aimed at simplifying the tax system and are based on propositions submitted by entrepreneurs.
Settlement of VAT corrections
According to the proposed change, in the case of issuing a corrective invoice reducing the resulting receivable, the supplier will be able to correct the VAT due for the billing period in which the supplier issued the corrective invoice. The condition will be to possess the documentation confirming these arrangements with the purchaser for reducing the tax base. This means that the taxpayer will have to have evidence concerning the "in minus" correction base. The absence of this documentation will result in the correction of the due tax in the settlement for the period in which the taxpayer receives this confirmation.
The regulations currently in force, which make the right to reduce the VAT due to the seller dependent on having the receipt confirmation of the correcting invoice, will expire.
At the same time, in the substantiation to the draft, the Ministry of Finance explained that the agreement on the terms and conditions of the transaction was to be understood as possessing the documents from which this agreement resulted.
The regulations will apply to corrective invoices issued after 1 January 2021. At the same time, the legislator has provided for the possibility of applying the existing rules before the end of 2021, provided that the choice of this solution is agreed in writing between the supplier of goods or services and their recipient before the first corrective invoice has been issued.
The VAT Act will also regulate the method of settlement of correction invoices that increase the tax base. Until now, taxpayers could only rely on the practice of the tax authorities and the case law of administrative courts. This amendment introduces a statutory regulation that provides for the settlement of correction invoices that increase the tax base ("in plus" correction) to be made in the settlement for the period in which the cause of the price increase (tax base) occurred. This confirms the current practice in this area.
Standardisation of exchange rate conversions
The amended regulations will introduce the possibility for taxpayers to choose the method of conversion for the purpose of their VAT settlements of amounts expressed in foreign currencies according to the rules applicable to the income tax regulations. The taxpayer will be able to choose this method of currency conversion for a period of at least 12 months.
Changes concerning the Binding Rate Information (WIS)
The project also includes changes in the WIS regulations and introduces solutions similar to those applicable to individual interpretations. One of these changes is the introduction of the applicant's statement on the absence of pending tax proceedings, tax or customs-treasury controls, and the absence of a decision or provision on issues covered by the application. Additionally, the regulations stipulate that the taxpayer will be deprived of the protection resulting from the WIS in the situation where the decision issued by the tax authority will indicate that the subject of the WIS is an element of the transaction which is considered to be an abuse of law.
Moreover, the project introduces the possibility of also obtaining the WIS for goods that are classified on the basis of the PKWiU, and with the current form of regulations this was possible only on the basis of CN, or PKOB.
The validity period of the WIS will be extended to five years.
Other changes
Other changes covered by the SLIM VAT package include the extension of the deadline for the export of goods and the receipt of custom documents, in order to retain the right to apply the 0% rate for the taxation of advance payments for the export of goods. According to the proposed modification, receiving an advance payment (in whole, or in part) before the delivery of goods results in the possibility of applying the 0% rate, provided that the export of the goods and the receipt of the customs document confirming this export takes place within six months. Currently this period is two months.
What is additionally of note is that the deadline for the VAT deduction will also be extended. Currently, taxpayers can take into account the input VAT without correcting the declaration during the following two settlement periods. The amendment now assumes that these will be the following three settlement periods in the case of taxpayers who settle monthly.
The proposed solution also provides for increasing the limit for low value unrecorded gifts to 20 PLN.
The amendment will additionally introduce the possibility to deduct VAT from accommodation services purchased by taxpayers exclusively for the purpose of resale.
More clarifying amendments
In the group of changes defined as “clarifying”, there are changes concerning the so-called white list, the new VAT JPK, changes of the used symbols the PKWiU 2008 to PKWiU 2015, and a number of others, but they are not significant from the point of view of economic turnover. However, the change which should be pointed out in this category is the new wording of the provisions on the split payment mechanism.
Split payment mechanism
The amendment will introduce the exclusion of the application of the obligatory split payment mechanism for the deduction of receivables. Currently, the exclusion only concerns the deductions referred to in art. 498 of the Civil Code, i.e. situations in which mutual claims are due. This means that the exclusion does not cover cases in which mutual, multilateral deductions of unmatured claims, for example, netting settlements, take place. The change in the regulations is to make this possible.
Moreover, the new regulations will introduce the possibility of making transfers from a VAT account to the customs agency in the amount corresponding to the import tax or customs duties.
Additionally, entities that are not VAT payers (e.g. bailiffs), or entities that have no registered office or permanent place of business in Poland will be able to apply for the release of funds from the VAT account.
Changes concerning TAX FREE
The proposed amendment introduces a far-reaching change in the VAT refund system for travellers. Currently, the regulations provide for the paper circulation of documents, whereas after the new regulations come into force, an electronic system - the Electronic Treasury and Customs Services Platform (PUESC) - will be introduced. Sellers using this solution will be able to issue documents electronically, keep records in this form, and receive electronic confirmation of goods exports.
These regulations are expected to come into force on 1 January, 2022.
Summary
The changes have been passed by the Parliament. The introduced changes are not controversial and, in principle, should simplify VAT settlement for taxpayers.
The regulations, with certain exceptions, are to come into force on 1 January 2021, so taxpayers should already start verifying their actions now. This is especially relevant in the context of arrangements with counterparties for adjustments, or when considering of the choice of an appropriate currency conversion method.
Authored by Andrzej Dębiec, Dorota Walerjan, Zbigniew Marczyk, Joanna Fiema-Kurek, and Jan Starybrat
