Key changes in taxes in 2020

With calendar exchange from 2019 to 2020, In addition to welcoming the following year, taxpayers faced the need to apply a number of revised tax settlement rules. Some of these changes apply exactly from 1 January 2020, And some will come into force this year.

These may not be as profound a change as in previous years, but some of them are of considerable practical importance for the proper determination of tax obligations.

These changes were discussed at the tax conference Russell Bedford Poland, which took place in Warsaw in days 18–19 November 2019 This article presents the key changes that have attracted the greatest interest among the participants of the conference.

Some of these are due to the need to bring national rules into line with Community law, but not in all cases at the time of commencement 2020 National regulations implementing these rules are known. In such situations, this is clearly indicated in the following text.

1. Amendments to the taxpayer register, "white list"

Since September 2019 the scope of the information to be disclosed in the taxpayer register has changed. According to the revised Article 96b Act on 11 March 2004 on tax on goods and services 1 (Next: the VAT Act) the list shall also include the bank accounts numbers given by the taxable person in the identification declaration.

The list of taxable persons shall be available in electronic form and shall contain information on the dates of registration, deregistration of the taxable person and the reasons for deregistration[2]. Since autumn 2019 taxpayers use the full functionality of the new list, called the "white list".

To date, this system has been in place to allow taxpayers to familiarise themselves with it.

However, the practical consequences of using the "white list" apply from the beginning 2020, where, in principle, the verification of counterparties through this list is still not mandatory. However, in view of the provisions of other tax laws, failure to carry out such verification will result in:

• • the possibility of finding that the taxable person has not exercised due care,
• • excluding or contesting expenditure from the cost of obtaining revenue,
• • on the buyer’s side, the risk of joint liability for the backlog of the issuer of the invoice in the VAT part resulting from this unverified payment.

From the point of view of the need for taxpayers to exercise due diligence in transactions with counterparties, the use of a ‘white list’ appears to be a reasonable way of safeguarding against allegations of lack of such care. In this respect, it is a tool which, in its current form, may be beneficial for taxpayers; it appears that the evidence in the form of the information collected from the list recorded for the given day is a material clearly confirming the diligence shown by the taxpayer.

More severe consequences may arise in the case of payment of an invoice to a non-listed counterparty account, in which case the taxpayer will be deprived of the possibility of including that expenditure in the cost of obtaining revenue, or there will be an obligation to reduce the costs (or increase its revenue in the absence of a reduction in costs) where before the order for the transfer of the payment has already included the cost resulting from the transaction, in the part where the payment has not been transferred to the payment account (e.g.

payment in cash of the amount above 15,000 PLN) or the payment has been transferred to a different account than that included (on the day of the transfer order) in the list[3].

Where a taxable person has made payments to an account not shown on the list, he shall still be able to credit the expenditure for the cost of obtaining income, provided that within the time limit third the days from the date of payment shall notify such payment to the head of the tax office responsible for the issuer of the invoice.

In addition, according to Article 117ba Act on 29 August 1997 - Tax Ordinance 4 ((c) on the part of the taxable person who governs the payment for a non-listed account, there shall be a joint and several liability with the seller, who is an active VAT taxable person, for his tax arrears in that part of the VAT which falls on payment for the transaction, confirmed by an invoice to a bill other than that included on the day of commission of the transfer on the list of VAT taxable persons[5]. In this case, too, the taxable person has the possibility of withdrawing from this consequence in the event of a notification of such payment to the head of the tax office (within the time limit three days from the date of the transfer order)[6].

Where payment for a transaction is ordered to an account not specified in the list and the counterparty pays VAT resulting from the invoice documenting the transaction, the trader will not be held jointly and severally liable for the counterparty's tax arrears as regards the amount of VAT resulting from the transaction in question. Unfortunately, he will not be able to classify expenditure as revenue costs.

2. Mandatory split payment – split payment mechanism

The split payment system or split payment mechanism (MPP) is mandatory from 1 November 2019 for payment of claims resulting from invoices where the following cumulative conditions are met:

• • Total charge resulting from the invoice (i.e. the gross value of the whole invoice) exceeds 15,000 PLN,
• • at least one the invoice item concerns sensitive goods or services (defined) In Annex 15 to the VAT Act Act) and the seller and purchaser are VAT payers.

VAT payer selling goods or services covered by compulsory MPP with invoice exceeding the amount 15,000 PLN, must enter the endorsement of the ‘sharing mechanism’. In the absence of that designation, the supplier should make a correction by issuing a corrective invoice or the purchaser may correct an error by issuing a corrective note.

Upon receipt of a VAT invoice with the endorsement of the ‘shared payment mechanism’, the purchaser is obliged to pay by means of a special transfer message only the amount of the liability arising solely from the part of the purchase of goods or services covered by the compulsory split payment.

The procedure also applies in the absence of annotation where the invoice is issued for an amount above 15,000 PLN and applies to goods or services from Annex 15 the VAT Act – This is due to due diligence. There's also a penalty on the buyer.

30% the VAT amount which is attributable to the goods or services purchased under the compulsory MPP if it fails to pay the MPP’s obligation to pay. However, it may also avoid sanctions if the issuer settles the total amount of VAT resulting from the invoice.

Moreover, a single-person undertaking is subject to fines of up to 720 daily rates for payment of compulsory MPPs (Article 57c(1) Act on 10 September 1999 Tax Penal Code 7 , Next: k.k.s.).

In addition, when the amount of the claim is paid without the MPP, despite the invoice stating that the payment should be made in the MPP, it is from 1 January 2020 it will not be taxed.

Unfortunately, there is currently no deadline in the regulations for correcting the error.

It may happen that the Authority notices the omission of the obligation before the counterparty’s attention is drawn to it, so that it will not be able to reflect before the imposition of sanctions, which will apply despite the subsequent settlement of claims.

A mandatory MPP will not be used in transactions under a public-private partnership agreement if the seller at the date of delivery was a private entity (not a public entity) and if the settlement takes the form of a deduction.

On the other hand, the reverse charge procedure will be applied on the basis of the content of the transitional provisions. two cases where:

• • before 1 November 2019 the taxable person has supplied the goods or services listed In Annex 11 or Annex 14 to the VAT Act Act, for which the tax obligation arose or the invoice was issued after 31 October 2019,
• • rod 31 October 2019 the taxable person has supplied the goods or services listed In Annex 11 or Annex 14 to the bill for which the invoice was issued before 1 November 2019
• 3. Changes in contract warehouses/call-of stock warehouses

Under the provisions of the new Chapter 3a the VAT Act (and, respectively, Chapter 3b for transactions carried out abroad), the rules for the taxable person to move goods forming part of the assets of his undertaking to another Member State under the call-of stock procedure have been regulated. Such movement made in accordance with this procedure shall not be regarded as a delivery of goods paid for. The new legislation replaces the existing regulations on consigning warehouses.

The call-off stock procedure shall apply when the following conditions are met:

1. the goods are dispatched or transported by the taxable person to, or on behalf of, value added tax from the territory of a Member State other than the territory of the country for delivery at a later stage and upon their arrival to another taxable person entitled to acquire the right to dispose of those goods as the owner, for the purposes of that Chapter, hereinafter referred to as ‘the purchaser’, in accordance with the agreement previously concluded between those taxable persons;
2. the taxable person of the value added tax sending or transporting the goods has no establishment or permanent establishment in the territory of the country;
3. the purchaser is registered as an EU VAT taxable person and his name and tax identification number preceded by an PL code shall be known to the VAT taxable person sending or transporting the goods at the time of dispatch or transport;
4. the VAT taxable person sending or transporting the goods records the movement of the goods in the records and gives the NIP in the information corresponding to the summary information.

Transfers made in accordance with the above conditions shall not be considered as intra-Community delivery. The intra-Community acquisition of goods will, on the other hand, be recognised with the moment of the transfer to the purchaser of the right to dispose of goods as the owner, which should occur before the expiry of 12 months from the day the goods were found in the warehouse.

At the time of transport of goods, the supplier should be aware of the identity of the buyer, which should be registered in the EU VAT system at that time (in the period 12 months may change the buyer, but the deadline 12 months for the transfer of the right of disposal shall not be subject to extension, i.e. it shall be kept running from the moment the goods are placed in storage.) In case of excess 12-the period of one month for the transfer of the right to dispose of the goods should be recognised as WNT on the day following the expiry of that period.

The call-of stock procedure is linked to certain registration obligations – the taxable person keeping the warehouse to which goods will be introduced in the call-off stock procedure, within the time limit 14 days from day first the entry of goods into the warehouse in this procedure will have to submit by electronic means to the head of the tax office a notice of the keeping of the warehouse used in the call-off stock procedure, containing the following data:

• • the name of the warehousekeeper;
• • the tax identification number used;
• • the address of the establishment or permanent establishment;
• • the address at which the warehouse is located.

Shipments from Poland to another EU country, as EU VAT payers, are required to submit summary information on movements of goods to the tax office in the call-off stock procedure. This information shall be submitted electronically every month by the latest 25. on the day of the month following the month in which the tax obligation arose and the goods were moved[8].

4. Changes in chain transactions

Changes in the recognition of so-called chain transactions affect many countries as they arise from Article 45a Council Implementing Regulation (EU) Regulation (EU) 282/2011 to 15 March 2011 laying down implementing measures Directive 2006/112 on the common system of value added tax.

Member States were obliged to implement the new rules at the latest at the beginning 2020 For the moment of discussion at the November tax conference Russell Bedford Poland and at the time of submitting this text for publication, the Polish legislator has not yet passed provisions implementing the relevant Community regulations, so at the beginning 2020 taxpayers and tax authorities face the need to apply the provisions of the abovementioned Regulation directly.

The aim of these Community rules is to simplify and, above all, to harmonise the rules on the recognition of chain transactions in different Member States in order to prevent possible double taxation (or non-taxation) of supplies carried out under the framework. one the transaction chain.

In accordance with the general rule to apply in all Member States where the same goods are subject to successive deliveries and are dispatched or transported from one Member State to another Member State directly from first suppliers to the last customer in the chain, dispatch or transport shall be assigned only to the supply made to the intermediary.

Therefore, the so-called "moveable delivery" will in principle always be delivery first.

In a known early January 2020 The proposed amending law regulates the planned new wording Article 22 the VAT Act, determining the place of supply of the goods from which it appears that on several successive deliveries of the same goods transported directly between first the supplier and the last buyer will only deal with legal sensibilities one the supply, which affects the establishment of the place of delivery of the goods.

All transactions carried out before the shipment will be taxed in the country of dispatch, and deliveries made after the shipment shall be subject to taxation by the State of final recipient. Where this distribution takes place between different EU countries, delivery to the intermediary will be considered a mobile transaction[9].

5. Amendments to the documentation of intra-Community supplies of goods

Changes resulting from Article 45a Council Implementing Regulation (EU) Regulation (EU) 282/2011 to 15 March 2011 laying down implementing measures Directive 2006/112 on the common system of value added tax, there are certain doubts on the part of taxpayers as to the scope of the additional conditions to be fulfilled for the recognition that the intra-Community supply has been effected. In this respect, changes that are of absolute character should be distinguished from the recognition of the presumption of movement of goods[10].

New conditions to be met by taxpayers in order to recognise delivery as a WDT and consequently have the right to apply the rate 0% are as follows: first, for the taxation of WDT at the rate 0% it will be necessary for the purchaser to have an active VAT-EU number.

This condition requires the exchange of information between the supplier and the consignee, information on the active number should come from the buyer. After second, the supplier should correctly demonstrate delivery in VAT-EU information.

Failure to demonstrate the supply in the EU VAT return or error in this respect will give rise to the recognition that the supply is to be taxed on goods and services at a national rate. The taxpayer may, however, refrain from error and retain the right provided that the chief of the tax office has been duly explained in writing.

For redesigned design Article 42 the VAT Act, determining the conditions for applying the rate 0% for the intra-Community supply of goods, has been introduced Under section 1 point 1 an additional requirement by the purchaser of his EU VAT number in the Member State responsible.

It is further noted that the rate will not apply if the supplier has not submitted summary information on the WDT or that the submitted information does not meet the formal requirements for the data listed therein.

Under Article 100(8) the VAT Act Here, too, a written explanation may be given to the head of the tax office in order to preserve the rate in question in the transaction.

A different status has the provisions of the Regulation, which provide for the possibility of supposing delivery took place. This presumption is intended to give taxpayers the opportunity to obtain more certainty that the shipment of goods has taken place and delivery will be recognised as a DTT for tax purposes. The additional conditions provided for in the presumption are not mandatory for each delivery. In all cases it is possible to demonstrate the shipment on basic principles.

The goods are presumed to have been moved from one to the second Member State, in each of the following cases:

(a) the seller is held at least two proof of movement of the goods in question Under section 3 point (a), issued by two independent of each other, or the seller is in possession of any single evidence from section 3 point (a), together with any single evidence of the above Under section 3 point (b), certifying the dispatch or transport which has been issued by two different sides;

(b) the seller has:

• a written declaration from the buyer confirming that the goods were moved to the Member State of destination of the goods; such written declaration shall specify: the date of issue; the name and address of the buyer; the quantity and type of goods; the date and place of arrival of the goods; in the case of the delivery of the means of transport, the identification number of the means of transport; and the identification of the person receiving the goods to the buyer; and
• at least two evidence in question Under section 3 point (a), issued by two different parties or any single evidence referred to Under section 3 point (a), together with any single evidence referred to Under section 3 point (b), certifying the transport or dispatch and originating from two different pages.

6. Amendments to the registers

From the top 2020 the possibility of issuing invoices on the basis of receipts previously received has been limited.

In the case of sales documented by a fiscal receipt, the invoice to the taxable person or value added tax shall be issued only if the receipt for that sale contains the number by which the purchaser is identified for VAT purposes.[11].

In accordance with the new rules, a sanction was also provided for – in the case of invoices issued on the basis of a receipt not containing NIP, the tax authority establishes an additional tax liability for the taxpayer (equivalent to 100% the amount of tax shown on this invoice).

For natural persons who are responsible for the same act fiscal misdemeanour or for fiscal criminal offence, the additional commitment is not fixed[12]. Such a sanction was also provided for a buyer who would record such invoice on the basis of a receipt not containing NIP. The new requirement does not apply to passenger taxis[13].

From 1 January 2020 another group of taxable persons loses the ability to keep records of sales using registers with electronic or paper records for mandatory online cash registers. This amendment concerns taxable persons carrying out the following benefits:

(a) repair services for motor vehicles and mopeds, including tyre repair, installation, retreading and regeneration, and replacement of tyres or wheels for motor vehicles and mopeds,

(b) the sale of motor gasoline, diesel, gas for internal combustion engines[14].

From 1 July 2020 (b) the sale of coal, briquette and similar solid fuels produced from coal, lignite, coke and semi-cox for heating purposes.

7. Amendments to the declaration VAT-7 and JPK_VAT

Prompted for a long time to close the declaration VAT-7 will be effective In the first stage from April 2020 According to the new sound Article 109(3) the VAT Act taxable persons, with the exception of those carrying out exempt activities only (subject and subject exemptions) shall keep records containing data allowing a proper settlement of the tax and produce summary information, in particular on:

• 1) the type of sale and the tax base, the amount of the tax due, including the adjustment of the tax due, broken down by VAT rate;
• 2) the amount of input tax reducing the amount of VAT due, including the adjustment of input VAT;
• 3) counterparties;
• 4) evidence of sales and purchases.

The tax declarations are to be submitted in accordance with the model electronic document, which includes the declaration and the records in question under Article 109(3), the obligation to submit declarations and records in a new format JPK_VAT is to apply: from 1 April 2020 – large entrepreneurs, from 1 July 2020 – other VAT taxable persons.

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[1] i.e. Journal of Laws of 2018, item 2174 as amended

[2] Article 96 b section 3 points 11 and 12 the VAT Act