New VAT arrangements as of 1 January 2021

We would like to present the amended Polish VAT regulations that entered into force on 1 January 2021 and may have a material effect on how you account for VAT. We encourage you to take a closer look at it and contact your RSM Poland consultant immediately should you have any questions.

SLIM VAT package (Simple Local And Modern VAT)

The Act of 27 November 2020 amending the Value Added Tax Act and certain other acts has introduced some new arrangements in the following fields:

Simple invoicing

• downward adjustment invoices:
  • No formal requirement to obtain a confirmation of an adjustment invoice receipt from the buyer of goods or services;
  • Tax base and output VAT can be adjusted downwards already at the time of issuing the adjustment invoice provided that the documentation held by the taxpayer clearly shows that the seller had agreed the transaction terms and conditions with the buyer of the goods or services;
  • Obligation to adjust the input VAT downwards at the time the reduction is actually being agreed with the seller (even if there is no adjustment invoice!).
• upward adjustment invoices:
  • Tax base and output VAT must be adjusted upwards on an ongoing basis in the return for the period in which the adjustment invoice was issued (due to reasons that occurred post-sale).

Convenient arrangements for exporters

• The right to apply a 0% VAT rate to advance payments for goods to be exported, provided that the goods are shipped outside the EU borders within 6 months (currently: 2 months) from the date of payment and the taxpayer is in possession of the relevant documents.

Financial advantages

• Extended deadline for input VAT deduction from three to four months (no changes for taxpayers submitting quarterly returns), counting from the month of the invoice receipt.
• Option of deducting VAT from invoices documenting the purchase of accommodation services for further resale.
• Increased threshold for one-off low-value gifts, from PLN 10 to PLN 20 (about EUR 4.50).

New arrangements relating to BRI (Binding Rate Information)

• Any issued BRI shall be valid for 5 years;
• BRI shall not be issued if its scope coincides with the scope of pending tax proceedings, tax inspection, customs and fiscal inspection, or if the case has been resolved in a decision or a ruling of tax authorities.
• Option of getting BRI for goods classified in the VAT Act according to the Polish Classification of Goods and Services.

Obligatory split payment

• The split payment mechanism shall not apply to different kinds of non-Code deductions (e.g. multilateral deductions that are not regulated under the Civil Code).
• Clarification of provisions under which the joint and several liability of the taxpayer, split payment mechanism and ‘SPM’ designation shall not apply to invoices where the total amount due does not exceed PLN 15,000 or its equivalent expressed in a foreign currency; the rules and principles of converting foreign currencies into PLN have been clarified, as well.
• If a given invoice has been paid using the SPM (up to the amount paid in this mechanism), the penalty of additional tax liability shall not be applied if the inspection by the tax authorities finds the amount of the tax to be incorrect.

 Other amendments

• Option of making payments from the VAT account with respect to tax on the import of goods or customs duties to the direct or indirect representative.
• Taxpayers supplying parts and accessories for motor vehicles and motorcycles shall not be entitled to a VAT-exempt status (up to the net turnover threshold of PLN 200,000) (this provision used to apply to parts only). Please, keep it in mind, however, that this exemption in any case DOES NOT apply to entities that are not seated in Poland (hence it does not apply to foreign entities).

Should you have any questions or doubts about accounting for VAT in Poland, we offer our support and encourage you to contact your Consultant at RSM Poland:

e-mail: ekspert@rsmpoland.pl

tel. +48 61 8515 766

fax +48 61 8515 786