All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Poland: Proposal of amendments to VAT Act intended to fight fiscal frauds

spychalski.jpg

Michal Spychalski

The Polish Ministry of Finance has announced proposed amendments to the VAT Act. The introduction of this package – according to the Ministry of Finance – will increase the effectiveness of the fight against VAT fraud. The new rules will primarily concern the domestic reverse charge mechanism, joint and several tax liability, as well as rules of VAT deduction in case of goods and services used for mixed purposes. The Ministry of Finance is planning to implement these amendments from January 2015. The domestic VAT reverse charge mechanism will be extended and will cover new products, such as mobile phones (including smartphones), portable computers (tablets, notebooks, laptops) and video game consoles. From 2015 reverse charge will also apply to raw gold and certain steel products whose characteristics are similar to products already covered by this mechanism. The domestic reverse charge will only apply if the purchaser is registered as the VAT taxpayer, and – in case of mobile phones – only if daily net amount of sale to one purchaser exceeded 20,000 PLN ($6,000).

The proposal also introduces a new reporting obligation. The suppliers of goods and services, in case of which VAT will be accounted according to the domestic reverse charge mechanism, will be required to submit to the tax office a statement listing such transactions.

The list of goods subject to joint and several tax liability mechanism will also be amended. According to this mechanism, which was introduced in Poland in October 2013, under certain circumstances purchasers of some goods (steel products, fuels, lubricants and raw gold) may be responsible for a supplier's VAT liabilities. The Ministry of Finance is planning to apply this mechanism also to raw silver and platinum. On the other hand, raw gold will be excluded as it will be covered by the domestic reverse charge mechanism.

The next part of the proposed amendments refers to rules of VAT deduction in case of goods and services used for mixed purposes; that is, goods and services used for purposes of activities subject to VAT and other activities. In particular, it will be possible to receive from the tax authorities binding confirmation that the method of calculating the VAT pro-rata applied by taxpayer is correct. Additionally, the Ministry of Finance will issue implementing regulations specifying possible methods of calculating VAT pro-rata.

This is still only the general draft of the proposal and a package of specific regulations will be announced later this year.

Michal Spychalski (Michal.spychalski@mddp.pl)

MDDP

Tel: +48 22 322 68 88

Website: www.mddp.pl

more across site & bottom lb ros

More from across our site

Corporations risk creating administrative obstacles if the pillar two rule is implemented too soon, sources say.
Important dates for the Women in Business Law Awards 2023
The Italian government published plans to levy capital gains tax on cryptocurrency transactions, while Brazil and the UK signed a new tax treaty.
Multinational companies fear the scrutiny of aggressive tax audits may be overstepping the mark on transfer pricing methodology.
Standardisation and outsourcing are two possible solutions amid increasing regulations and scrutiny on transfer pricing, say sources.
Inaugural awards announces winners
The UN’s decision to seek a leadership role in global tax policy could be a crucial turning point but won’t be the end of the OECD, say tax experts.
The UN may be set to assume a global role in tax policy that would rival the OECD, while automakers lobby the US to change its tax rules on Chinese materials.
Companies including Valentino and EveryMatrix say the early adoption of EU public CbCR rules could boost transparency of local and foreign MNEs, despite the short notice.
ITR invites tax firms, in-house teams, and tax professionals to make submissions for the 2023 ITR Tax Awards in Asia-Pacific, Europe Middle East & Africa, and the Americas.