Starting from 1st January, 2021 new regulations regarding simplification of VAT settlements came into force. They are included the so-called SLIM VAT (Simple Local And Modern VAT) Package and were enacted as an amendment to the Act on tax on goods and services.
The purpose of the changes is to simplify the obligations related to settlements in VAT transactions as well as shortening to the necessary minimum the time that the taxpayers spend on formalities related to their correct completion.
The solutions constituting SLIM VAT Package are:
1. Simple invoicing
SLIM VAT Package abolishes the requirement to have a confirmation of receipt of the correcting invoice:
Regarding the “in minus” correcting invoices, the taxpayer could reduce the tax base and output VAT, on the condition, that the taxpayer will have evidences which confirm that the terms of the given transaction have been agreed with his contractor, e.g. e-mail correspondence or annex to the contract. The reduction of a tax base and output VAT will be possible as soon as the correcting invoice is issued, on the condition, that it results from the documentation, that the taxpayer has agreed conditions for reducing the tax base for the supply of goods or services with the buyer of goods or the service recipient as well as on the condition that it also results from the documentation that these conditions have been fulfilled at the time of making a correction of output VAT by the taxpayer.
Also, on the invoice recipient's side, very important moment for the obligation to reduce input VAT, is the moment of establishing and fulfilling the conditions for the reduction of a tax base and not the moment of receipt of the correcting invoice. In case when the conditions for reducing the tax base for the delivery of goods or the provision of services have been fulfilled after the settlement period, in which these conditions have been agreed - the buyer of goods or the service recipient is obliged to reduce the amount of input tax, only in the settlement for the period in which these conditions have been met.
Regarding the “in plus” correcting invoices (i.e. increasing the tax base) solely their recognition moment has been regulated – the correction will be made in the settlement for the billing period, in which the reason of the increase of a tax base has occurred.
New regulations came into force from 1st January, 2021, however according to the transitional provisions, the current rules apply do the correcting invoices issued before 1st January, 2021 and unsettled before this date. Additionally, the amendment also provides for a possibility of application of the current rules for the settlement of in minus invoices till the end of 2021, on the condition, that this decision will be agreed in writing between the supplier and the buyer before issuing a first correcting invoice in 2021.
2. Facilitations for exporters
SLIM VAT package extends the period of exportation of goods for the application of the rate of 0% for advance payment in export. The period has been extended to 6 months (from the current 2 months). The implemented solution concerns mainly long-term deliveries.
3. Consistent exchange rates
The subject change enables the taxpayers to choose one common exchange rate in order to settle the given transaction on the basis of corporate income tax and value added tax. The choice of rules in VAT for converting the expressed amounts in the foreign currency into PLN, applied by the buyer in income taxes, does not require a notification of their choice to the relevant head of the tax office. This change will certainly simplify the settlements, which will in practice solve the problem of application to the same transaction the exchange rates from various days.
4. Financial benefits
This area covers:
- the right to deduct input VAT from invoices documenting the acquisition of accommodation services, on the condition that the services are then re-invoiced to other entities. Previously, the taxpayers could not benefit from VAT deduction in respect of these services;
- the increase of the limit on gifts of a small value from PLN 10 to PLN 20 - in order to be in line with the European Union average;
- extension of the period for deduction of input VAT for taxpayers who settle on a monthly basis - the taxpayers will be able to recognize the invoice in total within 4 settlement periods (i.e. the period in which the taxpayer acquired the right to deduct as well as 3 consecutive billing periods), without having the obligation to correct tax return and in case of taxpayers who settle on quarterly basis – deduction will be made on the current terms – up to 3 settlement periods.