Slim VAT – simplifications in Polish VAT

As of 1st, January 2021 Poland adopted number of changes which aim is to simplify the VAT settlement for the taxpayers. Below, we present the most important simplifications relevant for most of the taxpayers settling VAT in Poland.

  1. Corrections of the tax bases and output VAT (in-minus)

The supplier will not be longer obliged to receive the confirmation of reacceptance of the correction invoice by the customer in order to decrease the tax base and output VAT. The taxpayer will adjust the tax base and output VAT due in the period of issuing the correcting invoice, provided that the documentation in his possession shows that he has agreed with the buyer the change of the terms of transaction.

In the same period (i.e., the period when the arrangements are made), the buyer will be obliged to make an appropriate correction of input tax, which results from the arrangements made between the taxpayers.

  1. 0% on prepayments for export of goods

In order to apply 0% VAT to the prepayment for export of goods the goods will have to be exported within 6 months since the end of the month when the prepayment was received. Currently, the deadline was only 2 months.

  1. The time limit for deduction of input VAT

Nowadays, the taxpayers can deduct input VAT for the month in which the conditions to deduct are met or in one of the two following months. Since 2021 the deduction can be made for the month when the conditions to deduct are met or in one of three following months (so one month longer).

  1. The exchange rates for CIT and VAT

The taxpayers of Polish CIT will be authorised to choose to use for the VAT purposes the same rules on exchange rates used to convert amounts into PLN as for CIT purposes. Such a choice will be valid for a minimum period of 12 months.

  1. The threshold of gifts of small value

Currently, the maximum value of gifts of small value which supply free-of-charge is not taxable is PLN 10 net. Since 2021 this threshold will be increased to PLN 20.

  1. Deduction of input VAT from purchase of accommodation services

Nowadays, there is no possibility to deduct input VAT from accommodation services. Since, 2021 there will be a possibility to deduct input VAT from purchase of accommodation services (e.g., hotel) if the purchase/cost are going to be recharged on the final customer.

  1. The split payment and statistical classification of goods and services

The list of goods and services subject to the obligatory split payment provided in Annex 15 to the VAT Act is organised according to the Polish Classification of Goods and Services from 2008. Since, 2021 reference will be made to the Polish Classification of Goods and Services from 2015. The scope of goods and services will remain identical.

  1. Tax free system

Implementation of an electronic circulation of documents in VAT refund for travellers (TAX FREE system) and electronic confirmation of the export of goods in this system.

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The alert presents the issues that we believe may be of interest to you. The information in the alert is of a general nature and it does not cover all changes resulting from the amendment of the VAT law. Before making any decision or action, as well as in case of any questions or concerns, please contact one of our tax advisors on +48222503100 (email:biuro@itadp.pl).

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