The Polish New Deal - Part 4. VAT revolution ahead?

Aug. 25, 2021 Poland

The reform is to come into force in vast majority as of the beginning of next year. What will change in VAT settlements?

  1. Introduction of "VAT Group" - possibility of voluntary, joint VAT settlement by several taxpayers constituting the VAT Group:
  • the VAT Group - a group of entities related financially, economically and organizationally, registered as a single VAT payer;
  • each entity will be able to be a member of one VAT Group only,
  • unchanged number of members - during the existence of the VAT Group it will not be possible to extend it to other entities, or to exclude some of the members from the VAT Group,
  • the existence of the Group cannot be shorter than 3 years,
  • intra-group tax neutrality - supplies of goods and services by entities belonging to the Group will not be treated as activities subject to VAT,
  • exemption from taxation with tax on civil law transactions (PCC) between entities belonging to the VAT Group, except for transactions currently taxed with PCC (real estate transactions, sale of shares),
  • simplification of activities within the VAT Group – (i) one JPK_VAT file will be submitted, (ii) exclusion of the split payment mechanism for intra-group transactions.

2. Optional VAT taxation of financial services:

  • the possibility to opt for taxation of financial services (i.a. credit or loan granting services, suretyship, guarantee and any other security for financial and insurance transactions) provided by the taxpayer only for other taxpayers,
  • a taxpayer resigning from VAT exemption and choosing to tax the above-mentioned financial services will be obliged to tax all financial services rendered - it will not be possible to resign form the exemption only for selected types of services or contractors,
  • the taxpayer's choice of taxation of financial services will result in obligation to apply this option for at least 2 years,
  • financial services provided to retail clients, i.e. individuals not carrying out business activity, will be still obligatorily exempt from VAT.

3. Quick VAT refund for the so-called “non-cash taxpayers”:

  • VAT refund to be made within 15 days,
  • main conditions for the quick VAT refund:
    • significant share (at least 80%) of sales recorded using cash registers in total sales reported in a given period for VAT purposes,
    • significant share (at least 80%) of received payments made with the use of payment instruments in relation to the total value of sales recorded with the use of cash registers in a given settlement period,
  • new regulations would apply to the verification of the VAT refund included in the VAT settlement as of from 1 January 2022.

4. Binding Rate Information (WIS):

  • if the material scope of the application for binding rate information (WIS) on the day of submitting the application, is the subject of the already concluded tax agreement, WIS will not be issued in such a case.

In case of any questions, please feel free to contact our experts:

Jarosław Szajkowski
Jarosław Szajkowski Tax Manager - Tax Adviser
ASB Poland
jszajkowski@asbgroup.eu
Paweł Jóźwik
Paweł Jóźwik Tax Manager - Attorney-at-law
ASB Poland
pjozwik@asbgroup.eu