Changes to the VAT in Poland — Act SLIM VAT3

Introduced amendments to the VAT Act include:

  1. Increase of the sales limit of a small taxpayer to EUR 2 000 000.
  2. Clarification of the rules for applying the conversion rate for correcting invoices for VAT settlements in the case of the invoices issued in a foreign currency.

 

The basic rule in this regard is to use the exchange rate from the original invoice (historical rate). In case of the collective correction invoices for discounts or cost reductions, the exchange rate on the day prior to the date of issue of the correcting invoice should be applied.

For invoices for intra-community acquisition of goods and supplies taxed on a reverse-charge basis, the exchange rate on the day preceding the date of issue of the correcting invoice will apply. The taxpayer shall use such exchange rates for VAT purposes, unless the taxpayer has opted for the method of determining the exchange rate in accordance with the CIT Act.

 

  1. Clarification of the period for which the intra-community delivery of goods is declared, in cases where the taxpayer receives the delivery documents after a period of 3 months.

A taxpayer who receives the documents confirming the intra-community delivery of goods after a period of three months from the period in which the tax obligation on such delivery arose, should report the intra-community delivery of goods by adjusting the VAT return from the period in which the tax obligation arose, and not, as it was previously, for the period in which the delivery of the goods took place.

 

  1. The abolition of a formal requirement to have an invoice relating to the intra-community acquisition of goods when deducting input tax on such acquisition.

A taxpayer who reports the intra-community acquisition of goods in the VAT settlements without having an invoice will be obliged to correct the settlements upon receiving such document if there’s a change in the date on which the tax obligation arises for the intra-community acquisition of goods.

 

  1. No more obligation to conclude a protocol regarding the proportion of the input tax to be deducted in the case of taxpayers who did not generate revenue in the previous tax year or whose revenue in the previous tax year was lower than PLN 30 000. Earlier, such protocol had to be accepted by the head of the tax office. In place of this procedure, the head of the tax office must be simply notified on the proportion adopted.

 

  1. No more obligation to agree with the head of the tax office in the form of a forecast protocol for the purpose of calculating the amount of input tax in the case of taxpayers obliged to apply the so-called “pre-factor”, who start their activity in a given year. In place of this procedure, the head of the tax office must be simply notified about the introduction of the pre-factor.

 

  1. Increase of the amount threshold of non-deductible input VAT from the current PLN 500 to PLN 10 000, which determines the right of a taxpayer to apply the VAT proportion ratio of 100% in a situation where the actual ratio exceeded 98% for that taxpayer;

 

  1. Granting the taxpayer the right to opt out of the adjustment of VAT settlements if the difference between the initial proportion and the final proportion does not exceed 2 percentage points, and when the final proportion is lower than the initial proportion, and the non-deductible input tax resulting from the difference between them does not exceed PLN 10 000;

 

  1. Liberalising the conditions for faster VAT refunds for so-called cashless taxpayers by:
  • Reducing the required time of use of virtual/online cash registers from 12 to 6 months prior to the period for which the taxpayer claims the refund;
  • Reducing the threshold for the total value of sales (including tax) for each accounting period from PLN 50 000 to PLN 40 000;
  • Reducing the required percentage of the total value of sales using virtual/online cash registers to 70% (for the period between 1st July 2023 and 30th June 2025);
  • Reducing the required percentage of payments received made using payment instruments in the total value of sales to 55% (for the period between 1st July 2023 and 30th June 2025).

 

  1. Introduction of the possibility to waive the obligation to print the fiscal reports and non-fiscal documents issued with the use of cash registers by taxpayers keeping records of sales using online cash registers, including virtual ones.

The taxpayer will be able to choose whether to store fiscal reports and non-fiscal documents in paper form or only electronically. The choice of how to archive these documents and reports does not exclude the taxpayer’s obligation to issue then in electronic form (as has been the case so far).

 

  1. Introduction of the possibility to opt out of the obligation to print fiscal receipts:

The taxpayer will be able to choose how to archive fiscal receipts to which an invoice has been issued.

In the event that the invoice relates to a sale registered on a cash register, a fiscal receipt in paper form relating to that sale shall be attached to the copy of the invoice remaining with the taxpayer, or the document number and the unique number of the cash register contained on the fiscal receipt in electronic form shall be retained in the documentation.

This obligation does not apply to invoices issued by the cash registers and simplified invoices (receipts with a Tax Identification Number, up to the amount of PLN 450).

In the event that an electronic invoice concerns a sale registered on the cash register, the taxpayer shall leave in the documentation a fiscal receipt in paper form concerning the sale with the data identifying that invoice, or the document number and the unique number of the cash register contained in the fiscal receipt in electronic form.

 

  1. No more automatic VAT sanction applications.

The head of tax office shall determine an additional VAT sanctions in the amount of:

  • Up to 15% of the amount of the tax liability, in the case of correcting the declaration within 14 days from the date of delivery of the authorisation to carry out a tax inspection within the scope covered by the tax inspection;
  • Up to 20% of the amount of the tax liability, in the event of submitting the correction after the audit that takes into account the deficiencies;
  • Up to 30% of the amount of the tax liability, in the event that the taxpayer, after the tax inspection, does not submit a tax return correction and does not pay the amount of the tax liability determined by the authorities.

When imposing VAT sanctions, the head of the tax office does not apply “predetermined” VAT sanctions, but takes into account the nature and severity of the infringement of the taxpayer’s obligation (the circumstances of a given case).

 

  1. Clarification of the rules for making adjustments to output tax on the supply of goods made to a traveller under the TAX FREE system.

A taxpayer shall have a right to correct a VAT return and report a TAX FREE supply with a 0% rate for the period in which the taxpayer received a confirmation of the export of goods and a proof of payment of tax to the traveller, if the taxpayer received those documents after the expiry of a deadline for submission of the tax return for a given settlement period.

It will be possible to make such an adjustment if the taxpayer is in possession of these documents no later than 10 months, counting from the end of the month in which the supply was made.

 

  1. Modification of the payment deadline for tax cleared under the special EU and non-EU procedure via the OSS and import procedure via the IOSS.

The deadline for payment of VAT-OSS and VAT-IOSS will also apply even if the last day of the deadline falls on a Saturday or a public holiday.

 

  1. Introduction of provisions which are a basis for the submission of VAT-OSS and VAT-IOSS correction declarations outside the OSS and IOSS system, after the taxpayer ceases to use these procedures, directly to the Tax Office in Łódź.

 

  1. New rules for the releasing of joint and several liability by third parties in the case of payment settlements to the factor and by the factor in reverse factoring.

After the changes, in order to release themselves from the liability, the factor will be able to make payments using the split payment mechanism directly to the supplier’s VAT account (in reverse factoring).

On the other hand, the existing factor, in order to release themselves of this liability, will be able to make payment using the split mechanism directly to the VAT account of the new factor, hence bypassing the transfer to the supplier (in case of a change of the factor).

 

  1. Definition of personal luggage clarified for the purpose of VAT exemption on the import of goods by a traveller; fuel, other than fuel contained in a standard tank of any motor vehicle and fuel contained in a portable canister not exceeding 10 litres, will not be considered as personal luggage.

 

  1. Consolidation of the issuance of binding information such as binding rate information (WIS), binding excise information (WIA), binding tariff information (WIT) and binding origin information (WIP) by appointing the Director of National Fiscal Information (KIS) as the competent authority to issue WIS, WIA, WIT, WIP as a first instance and to handle appeal cases of the second instance.

The consolidation will ensure that entrepreneurs obtain binding information through the same authority and that the above-mentioned binding information is uniform across the country.

 

  1. Unification of the tax system in the area concerning the issuance of binding rate information (WIS) and binding excise information (WIA) – taking into account those aspects which are specific to each type of instrument.

 

  1. More favourable conditions granting the right to exemption from VAT on the import of a motor vehicle for a diplomatic staff member. The exemption now can be applied if a person cedes the vehicle to other persons (other than the diplomatic staff member) before the expiration of 3 year period, where it is justified by the circumstances relating to the important interest of the service, relating to the resettlement of an eligible diplomatic staff member to work in another country.
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