As concerns arise as to the correct determination of the effects of the provision of services for the storage of financial instruments on the day 20 January 2020 The MF has issued a general interpretation aimed at dissolving the existing discrepancies.
These divergences were created on the basis of a different approach to the storage services of financial instruments, depending on their form (material or dematerialised).
How to keep financial instruments
Financial instruments in material form are physically stored in a safe for example. Storage service in this case is similar in its content to other storage services. For financial instruments in the form of a dematerialised storage service, records or records shall be kept. [1] , in which records are made to determine their status, values, rights, etc. (e.g. dematerialised securities accounts).
VAT on storage services
In the context of dematerialised storage services, there was an argument that these services should benefit from VAT exemptions. According to one of the exemptions provided for under Article 43 VAT, tax exemptions are subject to the services covered by the financial instruments referred to in the Financial Instruments Trading Act, excluding the storage and management of those instruments and brokering services in this respect [2] .
The taxable persons providing accountkeeping services on which dematerialised financial instruments are recorded indicated that such a service should benefit from the exemption because the condition set out in that provision is met, i.e. the subject of their services are financial instruments
The taxable persons providing accountkeeping services on which dematerialised financial instruments are recorded indicated that such a service should benefit from the exemption because the condition set out in that provision is met, i.e.
The subject of their services are financial instruments and at the same time these services do not consist in the management of instruments (only customer dispositions are performed) but, given their intangible nature, no storage service can be mentioned.
In order to justify this position, taxpayers referred to the definition of a storage agreement with Article 835 Civil Code, indicating that only tangible movable items can be the subject of such a contract. In years 2014-2015 a number of interpretations were issued which confirmed this position [3] .
In subsequent years, there have already been arrangements whereby recourse to the coded definition of the storage contract is not appropriate to interpret the scope of the exemption resulting from Article 43(1)(41) VAT Act [4] , and the scope of the exemption is to be understood as excluding from the exemption the tax storage service for all the exempted securities, dematerialised and material.
In 2018 WSA in Warsaw indicated that keeping records, securities accounts is actually equivalent to keeping financial instruments in material form.
Making an entry in the securities account the conditions of the Regulation with dematerialised securities is equivalent to issuing a document as a condition for the disposal of traditional bearer securities.
It should therefore be considered that the services provided by the Company (the subject of the proposal) include the storage of dematerialised financial instruments.
Current position of the MF
Consequently, as described on the basis of the above examples of interpretative disputes, the MF issued the above general interpretation, in which it clearly indicated that under the VAT Act there is no basis for differentiation of the tax consequences of the provision of financial instruments storage services according to their form.
The final conclusion of the interpretation of the general MF means that, regardless of whether the storage services of financial instruments concern those in material or dematerialised form and other technical aspects of such service, these services should in principle be taxed at a rate of VAT 23%.
Link to the full content of the general interpretation:
https://www.podatki.gov.pl/vat/wyjasnienia/przechowywanie-instrumentow-finansowych/
[1] E.g. according to Article 5(1) Act dated 29 July 2005 on trading in financial instruments (Journal of Laws of 2017, item 1768, as amended): Securities: 1) which is the subject of a public tender, or 2)admitted to trading on a regulated market, or, 3)entered into ASO, or 4)issued by the Treasury or the National Bank of Poland - they have not been in the form of a document since their registration under the agreement, the subject of which is registration of these securities in the securities depository (dematerialisation).
[2] Article 43(1)(41) Act dated 11 March 2004, Journal of Laws of 2020, item 106 dated 23 January 2020
[3] See WSA judgment in Wrocław dated 6 May 2015, reference no. I SA/Wr 84/15
[4] In accordance with the position expressed by the Chief Administrative Court in its judgment of 20 April 2016, reference no. I FSK 2027/14 Interpretation of the provision Article 43(1)(41) VAT Act using the definition of storage contract with Article 835 The Civil Code would explain the concepts used in the Directive 112 and taken over by the Goods Tax Act, using the definitions contained in the internal law of the Member State. Such an interpretation of the concepts contained in the provisions of the Directive 112 It would undermine the effect of the directive's regulation.
Author: Leszek Dutkiewicz, partner Russell Bedford Poland.
Associated with the company from 2011. Director of RBP office in Katowice. In years 2008 – 2011 worked for leading consulting companies (Ernst&Young, KPMG, BDO) providing tax advisory services. He specializes in tax and economic law, primarily in international tax law, tax proceedings, VAT and transaction prices.
Author of a publication on tax, civil and international law issues. Lecturer in tax law training. He has legal education, in 2008 graduated from the Faculty of Law and Administration of the Jagiellonian University.