Simplification of import VAT settlements in Poland
Agnieszka Kisielewska of MDDP explains how changes to the VAT law in Poland during 2020 has benefitted businesses and taxpayers.
Cash-free import VAT settlements have become more accessible in Poland due to the changes of the VAT law in force from the beginning of July and October 2020. Although benefiting from this scheme still requires companies to meet several criteria, cash-flow savings resulting from it could be necessary to keep expected profitability of international transactions.
The basic deadline for payment of import VAT in Poland is only 10 days from the date of notification by the customs authority of the amount of customs and tax due, while the taxpayer is able to deduct it while submitting the VAT return. Therefore most importers, in particular importers from the UK to the EU after Brexit, need to involve additional funds to pay the import VAT, which results in negative impact on the importer’s cash-flow.
An alternative to paying import VAT just after the customs clearance is a settlement of import VAT in the VAT return. This solution is available in Poland from July 1 2020 to each VAT payer (registered for VAT) under certain conditions, regardless of the type of customs declaration – using both simplified and standard customs procedures. Before July 1 2020, settlement of import VAT was available only with reference of goods placed under a customs procedure on the basis of a simplified declaration (an incomplete customs declaration or an entry in the declarant's records) or lodged by a holder of the authorised economic operator (AEO) authorisation. Thus, the amendment results with a significant extension of the range of entities able to use this scheme.
Providing respective customs authorities with up-to-date documents confirming the lack of tax and social security arrears, and confirming the VAT registration, remains a condition for the cash-free settlement of import VAT.
Nevertheless, a new condition was introduced, namely every customs clearance to be settled in a VAT return should be lodged by a customs representative, unless the importer is a holder of the AEO authorisation or any of the authorisations for simplified declarations as mentioned above. On the other hand, customs representatives acting on behalf of taxpayers authorised for mentioned customs simplifications or for AEO importers, were relieved from the joint and several liability for the non-settled import VAT.
Moreover, after October 1 2020, the other amendment relaxed the formal conditions of the import VAT simplification. Starting with October 2020, taxpayers should only settle the import VAT in proper amount and in time, but they do not need to confirm the settlement to the customs authorities, as it used to be obligatory to the end of September 2020. The change is one of positive results of introduction of the VAT return in the SAF-T form (JPK_V7M / JPK_V7K), which is obligatory in Poland also from the beginning of October 2020.
Even though since the recent changes of VAT law, all or most of import VAT in Poland should be settled by taxpayers in their VAT returns commonly, the joint and several liability of the customs representative has discouraged many customs agents from providing the service of customs clearance with the VAT deferment. Therefore, importers who are keen to use the import VAT settlement freely, should obtain their own customs authorisations for AEO or to use certain simplifications (the incomplete customs declaration or the entry in the declarant's records).