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Possibility of including payments into virtual accounts from outside of the white list of taxpayers as tax deductible costs

2019-11-06

In a recent private tax ruling of September 24, the Head of the National Revenue Information Service took the position that is possible to include to tax deductible costs payments into virtual accounts not indicated on the white lists of taxpayers, and additionally suggested that only payments resulting from invoices should be made on the account indicated on the white list.

On September 1, 2019, a list of VAT taxpayers information was introduced, which its main goal is to help companies effectively and quickly verify contractors. Furthermore it replaced already functioning parallel lists of VAT taxpayers: active or removed. Additionally, the current list includes data about entrepreneurs’ bank accounts numbers. Pursuant to the new regulations which will become effective from January 1, 2020, transfers exceeding PLN 15,000 PLN made to an account invisible on so-called ‘white lists’ of VAT taxpayers will result in the inability to classify expenses as tax costs.

It should be noted that many accounts, which so far have been commonly used by taxpayers, have not been white-listed. This concerns mostly virtual accounts, which are attributed to each client individually. A virtual number is applied in order to automate billing - its use by the payer means that the system recognizes all transfer parameters itself and the transfer is automatically booked in the seller’s current account. The Bank does not make physical entries in virtual accounts or generate bank statements for them. In this case, payments are recorded on the basic account, but identification of the entity that made the payment is possible only through the use of this subaccount.

In the ruling at issue, the Head of the National Revenue Information Service stated that each payment made into a subaccount will be treated as payment into a settlement account appearing on the white list, so it can be treated as a tax deductible cost. However, it is essential that the taxpayer have in his records evidence confirming that the payment into the account was in fact a payment into an account on the list of entities referred to in Art. 96b (1) of the Act on tax on goods and services.

Importantly, the Head of the National Revenue Information Service also indicated that payments made after December 31, 2019 of benefits under life insurance contracts concluded with policyholders in excess of PLN 15,000 will not be subject to income tax sanctions resulting from the introduction of a white list of VAT taxpayers. According to the wording of Art. 15d (1) (2) of the CIT Act, this provision applies to invoices confirming the delivery of goods or services. Consequently, if the transaction in accordance with applicable regulations is not confirmed by an invoice, Art. 15d (1) (2) of the CIT Act will not apply, which in turn leads to the conclusion that a payment made by transfer into an account other than one included in the white list on the day the transfer instruction is made, may represent a tax deductible cost.

The Head of the National Revenue Information Service admitted that insurance services as exempt form VAT are not, as a rule, documented by invoices but rather by insurance policies that do not serve as VAT invoices. The Head of the National Revenue Information Service thus confirmed that negative consequences of payments into an account not appearing on the white list of VAT taxpayers should only refer to payments confirmed by VAT invoices.

 

Kinga Duszna, Tax Consultant, ATA Tax Sp. z o.o.

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