The negative consequences of the White List register, introduced on 1 January 2020, regarding payments to the supplier’s bank account not included in the White List register for B2B (active VAT taxpayers) transaction over PLN 15 000 gross, result in:
- lack of the possibility to treat such an expense as tax-deductible cost in CIT and PIT,
- joint and several liability along with the supplier for VAT obligations in the amount equal to the VAT proportionally attributable to the transaction.
As from 1 July 2020 among others the following changes for taxpayers were introduced:
- one-off notification is enough, but must be submitted at the first transfer to the bank account not included in the White List register – till 30 June in regulations, the notification per each transfer to the bank account not included in the White List register was required,
- change of the tax authority competent to submit the notification– from the seller’s tax office to the purchaser’s tax office,
- deadline to submit a notice of payment to the relevant authority about a transfer to the bank account not indicated in the White List was extended from 3 to 7 days, counted from the date of ordering the transfer.
During the COVID-19 epidemic, since 13 March 2020, special temporary rules are implemented, namely, a notification time is extended – up to 14 days.
Under the amendments in the following situations, the taxpayers will be released from negative consequences concerning tax costs limitation in CIT and PIT and joint and several liability in the scope of VAT, if:
- the payment was made along with one-off notification at the first transfer and
- the notification was submitted in 7 days from the date of ordering the transfer and
- the notification was submitted to the tax office competent for the purchaser
- the payment was made by using split payment mechanism (MPP) even in terms of the payments made to non-white list bank accounts,
- the payment refers to the invoice concerning the intra-Community acquisition of goods, import of goods, import of services or delivery of goods settled by the purchaser,
- the payment was made by transfer to the bank’s account or the account of the cooperative savings and credit union (SKOK) for the purposes of own economy, used in factoring operations and so-called cession accounts if the bank, SKOK or invoice issuer along with the bank account number for payment, provided the taxpayer with the information that the account indicated for payment is one of the above-mentioned.
At first glance, the new regulations seem to be very favorable for the taxpayers. Unfortunately, there is no clear guidance on:
- how to interpret the requirement to submit a notification at the first payment on the bank account – whether it takes effect from 1 January or 1 July 2020?
- what happens if the purchaser does not report the payment on the bank account which is not indicated in the White List register at the first payment to this bank account – should he notify about the payment for each invoice, because one notification will no longer apply?
- when the bank, SKOK, or invoice issuer should provide the purchaser and in what form the information that the bank account for payment is used for the purposes of its own economy, used in factoring operations and cessions?
- the provisions in the wording effective as of 1 July 2020 resulting from the amending act do not indicate the possibility of using transitional provisions in the scope of joint and several liability.
Under the new regulations, which seem not so beneficial and sometimes even misleading, it is important to strictly meet the deadline with the other requirements OR make payments via a split payment mechanism. In case of more doubts is better to apply for the individual tax ruling to be sure of the correctness of the taxpayer’s approach
For more information, please feel free to contact us:
CEE VAT Compliance Director