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Conditions for obtaining an early refund of VAT

Monika KAŁUZIAK
Accounting Senior at RSM Poland

A taxpayer declaring an excess of input VAT over output VAT has the right to either carry it forward to the following tax period or to obtain a refund to a bank account.

The standard time period for VAT refund indicated in the Act on VAT is 60 days. However, a taxpayer can obtain the refund earlier, in accordance with art. 87 p. 6 of the Act if he or she attaches to the VAT return an application for accelerating VAT refund ( it can be VAT-ZT or other written form, as long as it includes all data required by tax authorities). The shortest period in which the tax office will refund VAT is 25 days.

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A taxpayer willing to obtain an early refund of VAT must, however, fulfil the following conditions:

  1. A taxpayer must obtain revenue from VAT taxable activities;
  2. All purchase invoices included in the current VAT return have to be paid. It doesn’t matter if the invoices were paid by a taxpayer to a client’s bank account or if the payment was in the form of compensation. It is worth noting that payment in the form of compensation may be challenged by tax offices if the total invoice value exceeds €15,000;
  3. If in a given VAT return a taxpayer declares input VAT from transfer, the purchase invoices included in previous VAT returns must be paid;
  4. The amounts on invoices included in the VAT return concerning state purchases, foreign purchases, as much as the amounts on sales invoices must be coherent with the amounts of tax declared.

An early refund of VAT can be also obtained by a taxpayer who performs not only state transactions, but also transactions with foreign clients. In such case it is enough to provide customs documents, import declarations or decisions issued by customs authorities. On the other hand, if a taxpayer provides services or supplies goods to foreign entities exclusively, he or she cannot obtain an early refund of VAT.

When applying for an early refund of VAT one must remember that tax authorities may want to verify any VAT return claim. In case of any doubts, the tax office may, in accordance with art. 87 p. 2 of the Act, prolong the period for VAT refund until the verification of documents is completed. However, if the return is filed correctly, a taxpayer shall receive the amount of an excess of input VAT over output VAT with interest.

If a taxpayer is certain that all the above mentioned conditions are fulfilled, he or she should not hesitate but submit the application for an early refund of VAT as soon as possible.

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