Hundreds of invoices each month both issued for and issued by local and foreign businesses. Tax-exempted transactions, differently tax rated transactions, Intra-Community transactions and import business. Different implementations of similar tax regulations across countries, diverse practices of administrative officials... in such a maze of external conditions and economic events, crucial for proper VAT settlement, it is easy to make a mistake. A mistake which might generate quite substantial additional costs for a business. At the same time people responsible for taxes in the company might be held personally responsible for any mistake in the tax documentation.
Our VAT compliance service can help you out in getting everything under control. Your role will only be limited to forwarding source documents and we take care of the rest. Verifying submitted papers, preparing and submitting a suitable statement to the tax office is all included in our service. We can also adjust range and type of assistance we provide to the requirements of your business: you can outsource all of the tasks connected with VAT compliance services to us or seek help in a specific area or issue your company is facing.
What is VAT Compliance?
VAT Compliance is an increasingly popular solution, in particular among foreign taxpayers who are registered in Poland only for the purposes of VAT.
This is a comprehensive service of implementing Polish VAT regulations in the company and following the obligations under these regulations. The entrepreneur can adjust this solution to their own needs/expectations. They are given the necessary data to be included in the books of the company with a minimal effort on part of their employees, which reduces the organisation’s expenditure. When opting for this solution, instead of incurring the costs of hiring and training employees, the entrepreneur pays only the costs generated by an external service provider (advisor), depending on the number of documents delivered or the actual time spent on VAT accounting or communication with the tax office.
VAT Compliance comprises:
- handling the process of registration for VAT/VAT-EU purposes,
- keeping VAT registers (calculating VAT on transactions you have completed based on the information and documents provided),
- preparing tax returns and summary information and sending them to the tax office,
- support in getting your VAT refund,
- support during audits, tax office checks and tax proceedings.
Outsourcing VC: benefits for the entire organisation
- you do not have to adjust or replace your financial and accounting software used for VAT accounting,
- you avoid potential disputes with the tax authorities resulting from misunderstanding the Polish regulations,
- you minimise the costs of training your employees on the Polish tax law.
- expertise of experienced professionals in the field of the Polish tax law,
- if any problems arise, you can rely on ongoing VAT advisory services.
- you can focus on your core business,
- VAT accounting is streamlined,
- an international consulting company offers smooth cooperation with tax advisors from other countries,
- an external team means an objective outlook of your business and a wide perspective owing to the fact that they specialise in VAT accounting and work with many industries,
- smaller work load for your employees.
- support offered by well-qualified tax advisors,
- secure data transmission.
VAT accounting done by an in-house accounting team
Ensuring that VAT accounting obligations are met is usually the responsibility of the in-house accounting team.
This solution has the following benefits:
- you save money: no need to rely on outsourced services,
- matters are handled by a team that knows the organisation’s situation better than any outsiders,
- the information flow between the accounting team, departments/operations and management is easier.
Will the accounting team be enough?
The economic reality is becoming more and more complex, and, as a result, so is the tax legislation. Specific tax areas in the organisation require expert support (an accountant is no longer a jack of all trades).
From the perspective of people handling the accounting of an organisation, major benefits from outsourcing VAT accounting are the following:
- you can focus on bookkeeping and reporting for your in-house purposes,
- you do not have to analyse tax regulations in detail,
- the service provider contacts the tax authorities for you.
Things get even more complicated when the organisation carries out activities subject to VAT in another country. Then there is a need to comply with foreign VAT regulations (VAT Compliance).
Your in-house accounting team may find it hard to register and then to account for VAT in another country due to differences in tax legislation and the language barrier. Contacting foreign tax authorities regularly may be problematic, as well.
VAT settlements in Poland
A decision to start any business in Poland usually results in the necessity to register for VAT purposes. For foreign entrepreneurs, who are neither familiar with the Polish tax legislation nor with the Polish language, both the registration itself and subsequent current tax settlements tend to be quite a challenge. Dynamically changing regulations (mainly introducing more extensive and detailed reporting) create a barrier for foreign entrepreneurs that makes it hard for them to focus on their core business. Preparing the necessary data on time and staying abreast of VAT legislation may involve a disproportionate time and work load. For such entities, the best solution would be to rely on the VAT Compliance service, which involves implementing Polish VAT regulations in the organisation and fulfilling the VAT taxpayer’s obligations towards the tax authorities in Poland with the support of external professionals.
Facts about VAT accounting in Poland
- In 2020, the Polish VAT accounting system was unfortunately rated as the most complex and time-consuming from among all the OECD countries.
- VAT accounting in Poland is problematic for taxpayers, as can be seen from the fact that most tax rulings are about this tax.
- VAT accounting is a sensitive area in any organisation, as practically all transactions are involved, it must be carried out continuously (every month) and it is most often audited by tax authorities.
How do we support you in the VAT process?
- We take the clients through the process of registration for VAT/VAT-EU purposes;
- We maintain VAT registers based on the received data and documents, and submit tax returns and information;
- We help clients in the VAT refund process;
- We contact tax authorities and provide them with any necessary information in the case of audits, tax inspections and tax proceedings;
- We provide necessary tax consultancy whenever problems are identified in the organisation that go beyond the scope of the VAT Compliance service.
Doing business in Poland and VAT registration