Poland planning significant VAT changes in 2017

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Poland planning significant VAT changes in 2017

intl-updates-small.jpg

Serious amendments to Poland's VAT Law are likely to be implemented on January 1 2017. The modifications are mostly aimed at preventing tax fraud and increasing tax collection.

bogdanski.jpg

Bartosz Bogdański

The draft amendments proposed a VAT penalty (abolished in 2008), which can be imposed on taxpayers that underestimated output VAT in their VAT returns (the same penalty will be applicable for overestimations of input VAT).

The penalty amounts to 30% of the VAT underestimation. However, taxpayers will not be punished if they voluntarily correct their VAT return before a tax audit commences. Furthermore, VAT arrears resulting from accounting errors and "obvious mistakes" will not be penalised, and nor will arrears from reporting VAT in the wrong periods (i.e. when VAT was declared in the right amounts, but in the wrong reporting periods).

Taxpayers could face a penalty amounting to 100% of VAT of the underestimation in the tax return if taxpayers are found to have participated in fraudulent transactions (carousel fraud).

Poland also plans to introduce measures that may complicate VAT registration for entrepreneurs starting business activity. Starting businesses willing to use so-called "virtual offices" (services of address providers) may be asked to pay a deposit, amounting PLN 20,000 – 200,000 ($5,000 – $51,000) to the tax office, which will be refunded after one year of business activity. The same restrictions will apply to taxpayers related to companies or individuals that had tax arrears exceeding PLN 20,000 in the past.

Attorneys, who represent a taxpayer in the VAT registration process, will be joint and severally liable for tax arrears arising in the first six months of a taxpayer's activity if the tax arrears are a result of fraudulent activity (carousel fraud).

In addition, new established taxable persons will not be allowed to file VAT returns quarterly in the first year of activity. This benefit will only be available in the second and third year of business to only small taxpayers that do not exceed a monthly turnover threshold of PLN 50,000.

Separately, in order to prevent tax fraud in the construction sector, all construction services will be subject to an obligatory reverse charge mechanism.

Bartosz Bogdański (bartosz.bogdanski@mddp.pl)

MDDP

Tel: +48 22 322 68 88

Website: www.mddp.pl

more across site & bottom lb ros

More from across our site

The appointment of former Missouri representative Billy Long means Danny Werfel’s term will be cut short; in other news, former UK chancellor Philip Hammond has joined a tax consultancy’s board
But advisers also suggest that the proposals may lead to increased compliance costs and obligations
PwC’s ability to ‘quarantine critical information’ should raise concerns for regulators worldwide, Deborah O’Neill said in her warning letter to the PCAOB
After no party won a majority, it’s important that government formation talks are concluded quickly, one Irish tax partner said
Netherlands to think again on VAT increase; consumption tax levels stable in OECD
Problem solving skills are nothing more than a ‘nice to have’ for clients, according to new ITR+ research and conversations with six global in-house and advisory tax leaders
The US President’s decision comes despite him previously ruling out a pardon for his son
Despite China and India’s hesitation towards pillar two, there’s still enough movement in other countries for clients to start getting ready, James Badenach also tells ITR
The investigations dated back to 2015 and alleged that the companies received huge financial advantages from TP rulings; in other news, Australia is set to adopt a CbCR regime
Taxpayers would have to register controlled commodity transactions and declare information to the Brazilian tax authorities under the proposed regulations
Gift this article