The SME spokesperson proposes that small businesses benefit from changes in VAT rules. According to the legislative proposal to the Minister of Finance, the preferential tax free rate should be possible regardless of the size of the trader's turnover.
Current legislation Act dated 11 March 2004 on tax on goods and services (Journal of Laws of 2020, item 106; hereinafter ‘VAT Act’) provides for the possibility for traders to apply preferential VAT rates to exports of goods carried in the personal luggage of travellers (the so-called Tax Free). However, according to Article 127(6) VAT laws, the legislator has made it possible for the taxpayer to achieve turnover for the previous tax year above 400,000 PLN.
The Ombudsman received signals of significant difficulties in conducting business for entrepreneurs from eastern Poland who claimed that they were deprived of the right to refund paid VAT to travellers when buying goods that are exported abroad in personal luggage.
Consequently, among travellers there was a decrease in interest in purchases made in small shops on the Polish side of the border.
Importantly, the above annual turnover limit above 400,000 PLN was challenged by the EU Court of Justice in its judgment dated 28 February 2018, on C-307/16, followed by the Supreme Administrative Court in its judgment dated 10 May 2018, reference no.
I FSK 1398/14, which indicated that ‘the condition resulting from the above-mentioned ruling of the TEU is incompatible with Union law and consequently the tax authorities are obliged to disregard (refusal of application) a standard of national law contrary to Union law’.
Therefore, by letter dated 15 November 2019 An SME spokesperson requested the Minister of Finance to take legislative action to remove the threshold from the VAT Act 400,000 PLN the turnover for the year has passed as a condition authorising the seller to refund the input tax on goods and services to travellers. In response dated 13 January 2020 The Minister of Finance accepted the Ombudsman's arguments and declared to take account of the proposed amendment under the current draft law amending the Corporate Income Tax Act, the Goods and Services Tax Act and some other laws (list number UC) 11.
Nevertheless, the SME Ombudsman wrote dated 24 January 2020 asked the Minister of Finance to confirm that, also in the current state of the law interpreted in accordance with the above-mentioned judgments of the TEU and the NSA, the trader had achieved above the amount 400,000 PLN Last year it is not necessary to be able to refund VAT on purchases made with the traveller.