Recently, Poland introduced an online register of VAT payers, new VAT rates and VAT rate rulings as well as the mandatory application of the split payment mechanism for selected goods and services.
On 1 September 2019, the National Revenue Administration in Poland made an online register of VAT payers available. This so-called white list contains data on: (i) entities/individuals registered as VAT taxpayers, including entities whose registration as VAT taxpayers has been restored; and (ii) entities/individuals who were not registered for VAT purposes or were de-registered. The white list also contains additional data of VAT payers, including their bank account numbers. Starting from 1 January 2020, in the case of expenses exceeding PLN 15,000 (approx. EUR 3,500), such expenses cannot be treated as a tax-deductible cost if they are paid in cash or via transfer to a bank account not included in the white list. Moreover, payments made to accounts other than the ones shown in the white list will result in joint liability for VAT obligations of the supplier, in an amount equal to the VAT proportionally attributable to the transaction, unless a split payment mechanism is used. The sanctions will not apply if the taxpayer notifies the tax office about the payment made to an account other than the one included in the list within three days from the date of the payment being ordered.
The second change is in respect of the split payment mechanism. This is a payment method whereby payment for an invoice is split into the net amount (which is paid to a regular account of the seller) and the VAT amount (which is paid to a so-called VAT account). The funds collected on the VAT account are not freely disposable and may be used to make tax payments only. The split payment mechanism is currently voluntary. It will, however, become mandatory as of 1 November 2019 and will apply only to transactions between taxpayers subject to VAT in
Poland exceeding a value of PLN 15,000 (approx. EUR 3,500) and pertaining to certain products and services which have been frequently used in VAT-fraudulent transactions, such as:
- steel products and precious metals;
- waste and recyclable materials;
- electronics, such as processors, smartphones, phones and hard drives;
- car and motorcycle parts;
- coal, fuel and lubricating oils; and
- building and constructions services.
The sellers will be obliged to put information on the invoice about the obligatory use of the split payment mechanism. Foreign entities acquiring or delivering goods subject to mandatory split payment in Poland will be required to open a bank account in Poland in order to comply with the new obligations; however, they will be entitled to a refund of any bank charges incurred in relation to such an account. Failure to comply with the new mandatory split payment rules may result in a sanction being imposed totaling 30% of the VAT amount.
Finally, new VAT rates will come into force as of 1 April 2020. The VAT rates as such remain unchanged (with the standard rate being 23%), however, the applicability of the reduced VAT rates (8%, 5% and 0%) will no longer be linked to the Polish Statistical Classification of Goods and Services, but to the Combined Nomenclature classification. Starting from 1 November 2019, taxpayers will have a possibility to apply to the Polish tax administration for a tax ruling which should determine the VAT rate applicable as of 1 April 2020 (VAT rate ruling). The ruling will be binding on the tax authorities. The tax authority has up to three months to issue the ruling; the administration fee of the ruling is approximately EUR 10 per product. In certain circumstances there may be a need for the tax authority to collect samples of the product from the taxpayer in order to have them examined in a laboratory by a separate institution. In such cases, the taxpayer will have to bear the costs of the examination, and the deadline for the issuance of the ruling may be extended. Since the VAT rate ruling will be binding on the tax authorities, in the event of doubt whether or not a reduced rate is applicable, it is recommended to obtain the VAT rate ruling.