Significant Changes to Polish VAT System
New VAT regulations in effect in Poland as of 1st September 2019
New regulations concern an amendment to the VAT Act, with new rules when it comes to deleting companies from the VAT taxpayers register.
Prior to the changes, any taxpayer who did not submit VAT returns for six consecutive months (or two subsequent quarters), were removed from the register as a VAT payer. Now, companies will be deregistered after just three months.
The provisions regarding submission of nil VAT returns were also modified, with taxpayers who submit nil VAT returns for six consecutive months now being deregistered, however, if no sales are reported in the time frame, the deregistration will not occur if a purchase of goods, services or import with input VAT is declared in this period.
Obligatory split payment from 1st November 2019
As of November 1st 2019, obligatory split payment will come into effect in Poland.
This is the division of payments made by a client, where the net amount is paid into a regular bank account of the seller, however the VAT due is transferred to a special VAT bank account. This mechanism only affects B2B transactions and will primarily replace reverse charge in domestic transactions.
These rules will be only be applied to invoices exceeding 15,000 PLN each, and to a specific set of goods featured in the Polish VAT Act. Further to this, you must include somewhere on the invoice a statement indicating that the transaction concerns the mechanism, for example stating ‘mechanizm podzielonej płatności’ (trans: split payment mechanism). The penalties for not complying with the new method include an additional tax liability for the seller up to 30% of the VAT due.
For businesses based outside of Poland but with business activities in the country, you are also required to follow the obligatory split payment rules. Foreign taxpayers will now be obliged to have both a bank account and a corresponding VAT account in Poland.
Individual bank accounts for taxes in Poland
Coming into effect on 1st January 2020, taxpayers in Poland will be required to settle their tax obligations with the tax office via their own individual bank accounts.
This is intended so that taxpayers are able to make payments for VAT, CIT and PIT directly, and that in the future these accounts will be used for settlement of other taxes.
Currently all tax offices have their own bank accounts, all of which have several different account numbers that are dedicated to payments for specific taxes, from January 2020 however, one individual account will be assigned to each taxpayer which is made available to taxpayers via the Ministry of Finance website once a payer has provided their tax number.