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Poland: Changes to the Polish VAT law


Bartosz Bogdanski

July 1 2015 saw another amendment to the Polish VAT law. This time the amendments are not of crucial nature and were aimed at sealing the tax system and preventing fiscal frauds. Moreover, due to extinction of the temporal period agreed with the European Commission, the Polish government had to partially resign from the restrictions on the VAT deduction from fuel purchases to passenger cars. From the Polish government's perspective, the first part of the modifications seem to be the most important. It is well known that VAT frauds became a serious problem for the Polish state budget and a prevention of 'carousel fraud' is one of the priorities of fiscal policy. The most effective solution seems to be a broadening of the scope of the reverse charge mechanism for local supplies, which eliminates the mechanism of VAT input/output credits which is vulnerable to fraud. Starting from July 1 2015, supplies of portable computers (tablets, notebooks, laptops, mobile phones, including smartphones and video games consoles) shall be subject to the reverse charge mechanism if supplies are carried out to VAT registered taxpayers. The important issue is that the above mentioned goods will be subject to the reverse charge mechanism only if the total net amount of goods within the so called "economically uniform transaction" exceeded 20,000 PLN ($5,000).

Another measure aimed to help the tax administration prevent fraud is a new reporting obligation. The authorities implemented a new kind of tax return – the 'recapitulative statement in domestic transactions'. Taxpayers that carry out any supplies subject to the local reverse charge mechanism (including supplies that were subject to local reverse charge before July 1) will be obliged to submit such return, regardless of the supply's value. The return should be submitted for the same periods as the VAT return.

The change which will affect the biggest number of taxpayers is a reduction of the restrictions related to VAT deductibility of fuel for passenger cars. Namely, taxpayers that make use of passenger cars for which the vehicle mileage records are not carried out will be entitled to deduct 50% of the VAT incurred in purchasing fuel for these cars. It should be stressed that the right to deduct will not be restricted with additional conditions, which means that this relief can be used broadly by entrepreneurs. Full VAT deductibility on fuel will still be restricted for taxpayers using the passenger cars solely for business purposes.

Bartosz Bogdanski (



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