Poland planning significant VAT changes in 2017
International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian 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 newly launched Tax Responsibility and Transparency Index will assess the ethicality of companies’ tax practices against global standards and regulations
The reported warning follows EY accumulating extra debt to deal with the costs of its failed Project Everest
Law firms that pay close attention to their client relationships are more likely to win repeat work, according to a survey of nearly 29,000 in-house counsel
Paul Griggs, the firm’s inbound US senior partner, will reverse a move by the incumbent leader; in other news, RSM has announced its new CEO
The EMEA research period is open until May 31
Luis Coronado suggests companies should embrace technology to assist with TP data reporting, as the ‘big four’ firm unveils a TP survey of over 1,000 professionals
The proposed matrix will help revenue officers track intra-company transactions from multinationals
The full list of finalists has been revealed and the winners will be presented on June 20 at the Metropolitan Club in New York
The ‘big four’ firm has threatened to legally pursue those behind the letter, which has been circulating on social media
The guidelines have been established in the wake of multiple tax scandals and controversies that have rocked the accounting profession
Gift this article