Change in VAT in 2017
If you are liable to VAT, you should consult the amendments which were introduced by the so-called "large" amendment of VAT and which have been in force since 1 January 2017.
By the end of 2018, VAT rates of 8 % and 23 % will be maintained.
What will change in 2017.
A higher limit for VAT exemption
The limit of value of sales eligible for exemption from VAT was raised from PLN 150,000 to PLN 200,000. That applies also to taxpayers with total sales value in 2016 higher than PLN 150,000 but it did not exceed PLN 200,000. Those taxpayers will be able to benefit from the exemption from VAT in 2017. Read more on VAT.
Quarterly settlements only for small taxpayers
The possibility of quarterly settlements of VAT was limited. From 1 January 2017, the quarterly VAT settlements are only for small enterprises, i.e. taxable persons whose value of sales did not exceed EUR 1,2 million during the previous fiscal year. The quarterly settlements for taxable persons other than small taxable persons who submitted a quarterly VAT-7D return, have been eliminated. Taxpayers who submitted VAT-7D, would submit a VAT-7 return. This amendment does not require submission of the update of VAT registration.
In addition, small taxable persons must fulfil two conditions.
1. They are registered as taxable persons, active for over 12 months.
2. They have not made during the quarter concerned or in the previous four quarters (every month), the supply of goods listed in Annex 13 to the Act on VAT (e.g. steel products, fuel, precious metals, digital cameras, hard disks drives HDD, SDD, stretch film) amounting to over PLN 50,000 excluding VAT.
Reverse charge for construction services
The scope of the reverse charge VAT (i.e. where the customer rather than the supplier accounts for VAT) was broadened. The reverse charge covers (in addition to the existing) the construction services (Annex No. 14 to the VAT Act), as well as transactions on: processing units (if the total value in a single economic transaction exceeds PLN 20,000), jewellery and parts thereof and articles of jewellery and parts thereof of gold, silver and platinum. The provision on reverse charge in case of construction services is to be applied, if the supplier provides those services as a subcontractor. More on the reverse charge.
Control of VAT refund
Scope of verification of eligibility of repayment of VAT and the VAT refund deadline has changed Verification of the eligibility (i.e. check whether you should be reimbursed) may include a verification of the tax settlement of a tax payer and other entities involved in trade in goods or services and to verify the compliance of the settlements with the actual conduct of the transaction. In addition, the VAT refund deadline may be extended by the tax authorities even up to 3 months on the basis of the claim made by the criminal investigation authorities or the General Prosecutor.
Reduction in VAT refund
The possibility of making the refund of VAT within a period of 25 days was limited. It is granted only to tax payers who have been registered as active VAT taxable persons for at least 12 months and for each settlement period they submitted VAT returns. In addition, they must fulfil a number of other conditions, inter alia:
1. The unsettled surplus of input tax from the amount of tax due resulting from previous settlement periods and transferred to the current period does not exceed PLN 3,000.
2. Liabilities resulting from the invoices documenting the purchased goods and services are to be paid via a bank account or the account of the taxable person in SKOK and the claims related to the invoices paid do not exceed PLN 15,000. In addition, the taxable person lodges with the tax office documents proving payment of VAT via his bank account or account in SKOK.
VAT returns only electronically (for VAT EU taxable persons)
There is an obligation to submit VAT returns electronically for all taxable persons:
- obliged to be registered as taxable persons for EU VAT,
- suppliers and purchasers of goods and services which are subject to the reverse charge mechanism,
- obliged, on the basis of the income tax provisions to submit returns, information and annual calculation of tax by means of electronic communication.
Recapitulative statements: on intra-Community transactions (EU VAT) and domestic (VAT-27) must be submitted for monthly periods and only by means of electronic communication, by the 25th day of the month following the month in which the tax liability arose in respect of those transactions.
In relation to other taxable persons the obligation to submit VAT returns in electronic form will be introduced from 1 January 2018.
Greater responsibility of attoneys-in-fact who register companies
The principle of joint and several liability of attoneys-in-fact for the commitment of companies, which he registered for VAT, has been introduced. He will be responsible with the registered taxable person for tax arrears within 6 months from the date of VAT registration. Such liability shall not exceed the amount of PLN 500,000. There will be no liability where the occurrence of the tax arrears would not entail the participation of the entity carrying out the sales in an unfair settlement of tax with the purpose of financial gain.
Deposit guarantee of sensitive goods
The issue of payment of deposit guarantee and joint and several liability of suppliers and buyers with regard to supplies of sensitive goods (e.g. steel products, fuel, precious metals, digital cameras - listed in Annex 13 to the VAT Act). Taxable persons who apply for entry in the list of entities performing such supplies, will be required to authorise the bank or SKOK to inform the tax authorities and the treasury control authorities about all transactions made on this account. The same obligation will also address the taxpayers already included in the list. In addition, when fuel suppliers pay a deposit of guarantee (release from joint and several liability to the buyer) they are required to fulfil an additional condition i.e. holding the appropriate licence. The joint and several liability of the taxpayers will be applied if the transaction relates to stretch film (for, inter alia, for wrapping pallets), as well as HDD and SSD.
Refusal of registration for VAT/removal from the register
Reasons for refusal of registration for VAT and the conditions for removal from the register of VAT have been clarified. The authority will be able to refuse registration (without notice to the operator) where the data provided in the registration form:
- is false,
- the entity concerned does not exist or in spite of documented tests it is not possible to communicate with him,
- an entity or its attorney-in-fact do not appear at the request of the head of the tax office.
The taxable person will be deleted from the register, where it does not exist, it is not possible to communicate with him or his attorney-in-fact, the data in the registration form are shown to be false or the taxable person or his representative is not present at the request of the tax authority or the tax inspection body. Taxpayers who have suspended an economic activity (for at least six consecutive months), did not submit any VAT returns (for six consecutive months or two consecutive quarters), issued invoices or amending invoices for transactions which did not take place, will also be removed from VAT register.
Penalties for incorrect VAT settlement
New tax penalties for incorrect VAT settlement have been introduced (e.g. understatement ofmamounts of commitments, overstatement of the amount to be cleared in the coming months). The penalty shall be up to 30 % of the amount of understatement or overstatement. Taxable person who has committed tax fraud (e.g. blank invoices or invoices issued by a non existing operators) will face increased penalties (100 %) .
- Remember also about changes in VAT records from 1 January 2017. As the mandatory elements of the VAT records which should be kept by the taxable person, details have been added for the identification of individual transactions, such as NIP of Polish or EU counterparty. As a result, VAT records should contain in particular the data necessary to determine the object and base of taxation, the amount of tax due, adjustments of output tax, the input VAT paid in respect of reducing the amount of output tax, input tax adjustments, the amount of tax payable to the tax office or recoverable from that authority, as well as other data for the identification of individual transactions, including the number by which the counterparty is identified for VAT purposes or value added tax.
- Small and medium-sized enterprises will submit data from the records of the purchase and sale of VAT in the form of a Single Audit File. See more on the Single Audit File.