On 30 December 2020 the bill amending the provisions of the VAT Act and certain other acts has been published in the Journal of Laws of the Republic of Poland. The so-called SLIM VAT package introduces changes in VAT concerning, among others, simplification in invoicing, facilitation for exporters or unification of exchange rates with income tax.
The main solutions to be introduced by the amendment include:
- extending deadline (from two to six months) for applying 0% VAT rate for advance payments in case of export of goods,
- extending the deadline for deducting input VAT on an ongoing basis up to a total of 4 periods in case of monthly settlement periods (instead of 2), and in the case of quarterly taxpayers up to 3 settlement periods (instead of 2),
- introducing the possibility of deducting input tax resulting from invoices documenting the purchase of accommodation services for resale,
- adding the possibility to determine the tax base expressed in a foreign currency by converting into PLN in accordance with the rules of income tax regulations;
- increasing of the limit for undocumented small value gifts from 10 PLN to 20 PLN.
Binding Rate Information
The draft act also provides for amendments relating to Binding Rate Information ("BRI").
According to the draft act, the BRIs and the decisions of the Head of the National Tax Administration and the Director of National Tax Information on the change of the BRI are to be valid for 5 years from the date of their issuance. As it is indicated in the explanatory memorandum of the draft act, "the introduction of the period of validity of the BRI will enable the taxpayers to receive the decision, taking into account the current legal conditions (which may have changed within 5 years). It also reduces the risk of prolonged misuse of BRI, which expired by law due to the change of regulations (which could have been unnoticed by the taxpayer)".
TAX FREE for travellers
An important change will also take place in the travel tax refund system. The draft act provides that the seller will issue an electronic document TAX FREE, which together with the official confirmation of export of the goods included in this document will be the basis for VAT refund. It should be noted that the amendment introduces an entirely electronic circulation of TAX FREE documents and record keeping.
Correcting invoices
The legislator has resigned from the requirement to obtain confirmation of receipt of correcting invoices by the purchaser of goods or service recipient in order to reduce the tax due. As it results from the explanatory memorandum to the draft act, the purpose of the change is to eliminate the obligation to collect confirmations of receipt of correcting invoices and wait for their delivery.
The draft act also contains changes in relation to the correcting invoices in plus:
- if the correction is caused by reasons arising at the time the original invoice was issued, it should be settled in the tax return for the period in which the original invoice was shown;
- if the correction is caused by reasons arising after the transaction, the correction should be made in the tax return for the month in which the correcting invoice was issued. Such a case will take place when the amount of the tax due was shown in the original invoice in the correct amount, but the reason for the correction occurred later;
- the subsequent detection of an error in the original invoice is the reason for increasing the tax base settled in the tax return for the period in which the original invoice was shown.
The legislator also indicated that in the case of correcting invoices issued before 1 January 2021, the provisions of the VAT Act in its current wording will apply.
Other changes
The draft act also contains amendments to the Banking Law. In this respect, technical-legislative changes are proposed with regard to the application of the term "technical account". The draft act also includes an amendment to introduce the possibility of making payments from the VAT account in respect of amounts of tax on the import of goods or customs duties to customs agencies.
Legislative status
According to the draft, the amendment act will enter into force on 1 January 2021. Certainly, the discussed amendment to the VAT Act and the Banking Law Act is important from the entrepreneur's point of view, therefore we recommend monitoring the implementation process on an ongoing basis.
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