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The Warsaw Voice » Law » February 4, 2009
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VAT-Selected Amendments
February 4, 2009   
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The recent Value Added Tax amendment introduces numerous changes, most of which seem to be advantageous for taxpayers. Most of them came into force on Dec. 1, 2008 but some took effect on Jan. 1, 2009.

Quarterly declarations
As from Jan. 1, 2009, all taxpayers have the option of choosing quarterly instead of monthly VAT returns (to date this scheme was only available for so-called "small taxpayers"). Under this scheme, VAT returns are filed on a quarterly basis-by the 25th day of the month following each quarter. The quarters are not just any three months, but calendar quarters. However, this does not mean that in every case VAT may be settled per quarter. In the case of taxpayers who are not considered "small taxpayers" under the VAT Law, VAT advance payments for the first and the second month of each quarter need to be made. The advance payments for these months are calculated as a third of the VAT liability reported for the previous quarter. The payments should be made by the 25th of the month following the month for which the advance is due. The VAT for the respective quarter is due by the 25th day of the month following the given quarter. The VAT liability is calculated as the difference between the total VAT liability for that quarter, as reported in the quarterly VAT return, and the total of advances made for the first two months of that quarter.

Refund and deduction deadlines
The general deadline for the direct VAT refund is now 60 days from filing the respective VAT return and does not depend on the nature and type of acquired goods or services to which the input VAT was linked. But the deadline for a direct VAT refund may be prolonged, if the legitimacy of the refund claim requires additional verification by the tax authorities, or launching tax proceedings or a tax inspection. In such a case the taxpayer may still request the VAT refund in 60 days but on condition that it is secured by a deposit in the amount equal to the demanded VAT refund. The security should have the form of a bank or an insurance guarantee, a bill of exchange secured by a bank, a check confirmed by the issuer's domestic bank or selected securities.

As from Dec. 1, 2008 it is possible to deduct the input VAT incurred upon the acquisition of goods and/or services which may not be treated as tax deductible costs for income tax purposes. Previously, input VAT linked to such expenses was not deductible (it was treated as a tax deductible cost).

Under the amended regulations the understatement of a VAT liability or an excessive VAT refund claim is no longer charged with an additional VAT liability in the amount of 30 percent of the understated VAT liability or the overstated refund claim.

Output VAT linked to bad debts
In the case of unpaid receivables the taxpayer is allowed to adjust the sales and the output VAT resulting from an unpaid invoice. The adjustment is possible if the receivable has not been paid within 180 days from the payment date set in the respective contract or invoice (it is no longer required to formally substantiate that the debts cannot be collected). Nevertheless many other formal requirements of adjusting the output VAT remain in force and some additional ones have been added. In particular the taxpayer is obliged to notify the debtor about the planned adjustment of the output VAT and is entitled to make the said adjustment upon receipt of confirmation that the debtor received the above-mentioned notification.

Call-off stock warehouse
Foreign companies not registered for VAT in Poland and operating warehouses stocking, for example, spare parts or semi-finished products no longer have to register for VAT in Poland. Under the new law, under certain conditions, the Polish buyer of goods delivered and stored in Poland under a so called call-off stock scheme will be liable to declare and settle the VAT due on such transactions. The buyer in Poland will be obliged to declare an intra-Community acquisition which will release the foreign supplier from registering for VAT in Poland. Previously a foreign supplier was obliged to recognize the transfer of goods to the warehouse as an intra-Community acquisition of goods and their release from the warehouse to the customer as a domestic delivery and register as a Polish VAT payer.

In order to apply the simplified call-off stock scheme, the foreign supplier may not be registered for VAT in Poland, the goods subject to transfer may not be used for trade but only for manufacturing or service activities. Moreover, the operator of the call-off stock warehouse should notify the tax office of the intention to operate such a warehouse before the first arrival of goods at the warehouse.

Restructurings and supply of real property
The disposal of an enterprise or its organized part is now outside the scope of VAT. Previously only transactions covering an enterprise or a self-balancing unit of an enterprise were not subject to VAT.

As a rule the supply of buildings, constructions or their parts is exempt from VAT unless the supply is conducted within or prior to their first occupancy or the supply is carried out within two years of the first settlement. However, the taxpayer may choose to charge VAT on supplies of buildings, constructions or their parts upon a joint notification by the taxpayer and the acquirer to the relevant tax office on their resignation from the exemption. Additionally, the taxpayer and the acquirer have to be active VAT taxpayers.

Agata Nieżychowska, tax adviser at Salans Warsaw Tax Advisory Team
Mateusz Serafiński, associate at Salans Warsaw Tax Advisory Team
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