SLIM VAT is a package of changes which should make the VAT easy to use, adapted to the local specificity of the country in which it operates…
SLIM VAT is a package of changes which should make the VAT easy to use, adapted to the local specificity of the country in which it operates.
The SLIM VAT package implements the changes to VAT as of January 2021.
What is changing? Major amendments are easily described below.
- The sale invoice corrections „in minus”
- resignation from the formal condition of obtaining confirmation of receipt of the invoice correction „in minus” from the purchaser,
- the right to reduce the tax base and the output tax already in the period of issuing the invoice correction „in minus”, provided that the documentation in the seller possession prove that he agreed with the purchaser the transaction terms, for examples: annexes to contracts, business correspondence, proofs of payment as an evidence that both parties know and accept the new amended terms of the transaction.
- The sale invoice corrections „in plus”
- in the case of an increase in the tax base, the correction is made for the period in which the reason for the correction occurred:
- if the reason for the correction arose in the moment of the original invoice issued – the invoice correction needs to be reported in the month when the tax obligation arose (we have to go back to the original settlement);
- if the reason for the correction arose later and was not foreseeable at the time of issuing the original invoice for example: post-trade changes in prices – then we can report the invoice correction in general in the moment of such changes or in the date of the invoice correction issued.
- The purchase invoice corrections „in minus”
- In the event of a reduction in the tax base due to a reduction in the price, return of the goods, return of payment or finding an error in the tax amount on the invoice, the purchaser of the goods or service is obliged to reduce the amount of input tax in the settlement for the period in which the conditions for reducing the tax base for the supply of goods or services have been agreed with the supplier of goods or service provider, if these conditions have been met before the end of this accounting period. If the conditions for reducing the tax base for the supply of goods or services have been met after the settlement period in which these conditions were agreed, the purchaser of the goods or services is obliged to reduce the amount of input tax in the settlement for the period in which these conditions have been met.
Facilitations for exporters
- A term to apply the 0% VAT rate on the advance payment in the export of goods is extended from 2 to 6 months.
Common currency exchange rates for VAT and CIT
- The taxpayer is able to choose for VAT purposes the rules of currency conversion as for income taxes.
- When choosing this voluntary option, the taxpayer will be obliged to use it for a period of 12 months from the beginning of the month in which it was chosen.
- This means simplifying settlements for the entrepreneur and reducing the time to determine the exchange rate to currencies for one transaction.
Extending of the deadline for VAT deduction
- Extending the deadline for the input tax deduction on an ongoing basis from 3 to 4 months if a monthly VAT return is submitted. In other words, input VAT can now be deducted in a total of 4 months without having to correct the VAT return.
- After 4 months the right for the input tax deduction still applies, but it already requires the correction of the relevant tax declaration for the period in which the right of VAT deduction arose.
Split payment clarification
- It was finally clarified that the split payment mechanism applies when the total amount due on the invoice documenting the purchase of goods or services listed in Annex 15 to the VAT Act exceeds PLN 15,000 gross or its equivalent expressed in a foreign currency. So far the provision was not clear and aroused a lot of controversy, interpreted in this way that only for invoices with a value of PLN 15,000 gross or its equivalent expressed in a foreign currency split payment applies.
- In the event of a set-off of claims, the provisions on the obligatory split payment mechanism do not apply to the extent to which the amounts due are set off.
- It is possible to pay VAT and customs liabilities for import from the VAT account to customs agencies, or more specifically to a direct or indirect representative (within the meaning of customs regulations) who makes customs declarations for the importer.
Limitation of WIS (binding VAT rate information) validity
- Binding VAT rate information will be valid for a maximum of 5 years from the date of their issue. Upon this time, the taxpayer will be able to request another WIS in the same scope.
Other financial benefits
- The right of VAT deduction from invoices for accommodation services which are purchased for resale.
- Increasing the limit on the low value gifts (a free-of-charge transfer) from PLN 10 to PLN 20 net value.
If you have any doubts about the new regulations, please do not hesitate to contact us:
Anna Szafraniec, CEE VAT Compliance Director, [email protected]
Łukasz Woźniak, VAT Compliance Manager, [email protected]