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SLIM VAT package

2021-01-29

On December 30, 2020, the Journal of Laws published an amendment to the Value Added Tax Act and certain other acts (Journal of Laws, 2020 item 2419), which entered into force on January 1, 2021. The amending act includes, among other things, the SLIM VAT package, which is intended to introduce many simplifications for taxpayers, particularly with respect to the hitherto excessive formalism.

Below we present a summary of the most important changes included in the Act.  

Simplified invoice corrections

  • Corrections in-minus

The legislator has abandoned the requirement for the purchaser of goods or services to obtain a confirmation of receipt of a corrective invoice. A condition is that the taxpayer have proper documentation to demonstrate that he has agreed with the buyer of goods or recipient of services the terms of reduction of the taxable amount for the supply of goods or services as set out in the corrective invoice and that these conditions have actually been met, as well as the invoice's agreement with the documentation in his possession. If the taxpayer does not have the documentation in his possession in the accounting period in which the correcting invoice was issued, the reduction of the taxable base will be made for the accounting period in which he obtained the documentation. The taxpayer does not have to apply the new accounting rules until the end of 2021 with respect to in-minus corrective invoices issued from  January 1, 2021. Instead, he may choose to apply the existing ones, provided, however, that this choice is agreed in writing between the supplier of goods or the provider of services and their purchaser, before issuing the first corrective invoice in 2021.

  • Corrections in-plus

In the case of an increase in the taxable base, the adjustment is made in the settlement for the period in which the cause for the increase arose (this applies to circumstances occurring after the sale). If the reason for the correction originally existed at the time of the transaction, the taxable base should be increased at the time of the transaction, and the issuance of the corrective invoice itself will have no effect on the amount of the tax liability. The change is important, because, until the end of 2020, the above procedure was not clearly expressed in the regulations, which raised doubts as to the moment in-plus corrective invoices should be recorded.

Simpler rules for exporters 

The amendment grants exporters a longer period for exporting goods in order to be able to benefit from a 0% rate on the advances received. Until now, the deadline was 2 months and has been extended to 6 months. Due to this adjustment, taxpayers will be less frequently required to make corrections, in particular in problem-raising long-term supplies. Despite exceeding the new deadline, the taxpayer will still have a right to make proper adjustments in the settlement for period in which he received the required document.

Consistent exchange rates for value added tax and income tax

The taxpayer will be able to apply a uniform exchange rate with respect to value added tax and income tax applicable to him. While the use of this form of settling the tax base expressed in a foreign currency is optional, its adoption will be binding for the following 12 months. The choice of a new method doesn’t require any notification to tax office.

Benefits in deducting VAT

The remaining simplifications for businesses include:

  • Extension of the deadline for current VAT settlements from three to four months;
  • Possibility of deducting VAT from invoices for accommodation services purchased in order to resell them;
  • The gift limit being raised from PLN 10 to PLN 20.

Time limitation of Biding Rate Information

In addition to the regulation known as the SLIM VAT package, it is also worth noting the change regarding the Biding Rate Information (BRI), which, under the new regulations, will be valid for a period of 5 years of the date it is issued. For BRI issued before the date of entry into force of the act, it is assumed that they will remain valid for a period of 5 years from the date of application of the new regulations. What is more, the BRI won’t be issued if the subject matter of the application is also the subject matter of an ongoing tax proceeding, tax audit or customs and fiscal audit.

Should you be interested in further information, please contact us in order to discuss the details of the proposed changes in the tax regulations.

 

Jakub Janicki, Tax Consultant, ATA Tax Sp. z o.o.

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