On 6 October 2020 The Director of National Tax Information issued an individual interpretation (Event No. 0113-KDIPT1-3.4012.587.2020.1.KS), in which it indicated that in certain situations retroactive VAT registration may be allowed and retention of the right to deduct VAT for a period during which the taxable person has not yet been registered for VAT purposes.
In fact, the company was established in March 2020 with the intention to start providing services immediately after the formal appointment of the entity. first documented sales of services took place in April 2020 and since March 2020 the company made declarations VAT-7 and sent JPK files.
By mistake, the application for registration for VAT purposes on the VAT-R form was not lodged and the company was therefore not included in the register of active VAT taxable persons. Despite this, the company continued to operate for months acting as a VAT taxable person, making subsequent declarations showing the tax due and charged.
July 2020 The company was informed that, due to the absence of a VAT-R deposit, it was not an active taxpayer.
The taxpayer completed the missing VAT-R return indicating that the start of taxable activities took place in March 2020 The tax authority indicated that registration with a retroactive date is in principle inadmissible, but if the company intends to apply for registration with a date prior to the date of notification, it should request an individual interpretation.
The company requested an individual interpretation, presenting its doubts as to the possibility to register retroactively and the right to deduct tax resulting from documented purchases during a period when it was not registered for VAT purposes and behaved like a taxable person.
In the interpretation received, the Director of KIS referred positively to the situation of the taxable person, indicating that, in principle, the obligation to submit a registration declaration to VAT should be carried out before making first taxed activities. Consequently, in the case of that taxable person, the obligation to lodge a registration application was established in March 2020 At the same time, the Director of KIS stated that, in the absence of such a notification in due time, the taxable person has the right to submit VAT-R printing, showing as the date of commencement of business activity the day 11 March 2020 and reporting as first month to be declared VAT-7 – March 2020 The content of the information provided by the Director of the CIS shows that such a post-date notification should be treated as a ‘VAT-R update’.
The right to deduct VAT on purchases relating to VAT-taxed activities for the months March, April, May, June 2020 The Director of KIS explained that the right to reduce the tax due by the input tax resulting from invoices documenting purchases relating to the economic activity of the taxable person results from the construction of the tax on goods and services itself and ensures that this tax is neutral for active VAT taxable persons.
The provisions of the Goods and Services Tax Act contain general conditions authorising the reduction of the input tax, also provide for certain situations in which the taxable person is not entitled to deduct the input tax when purchasing goods and services.
In the facts presented by the taxpayer, the interpretative body did not find any of these situations to result in a refusal to deduct input tax.
When considering the right to deduct input tax, The Director of KIS also referred to the case law of the EU Court of Justice, pointing out that in the judgment of the Court of Justice of the EU on C-400/98 The Court found that the right to deduct input tax resulting from the investment was not dependent on prior registration for VAT purposes.
This can also be confirmed by the judgments of the Court of Justice in cases C-268/83 and C-110/94, where the TEU indicated that the creation of a right of deduction does not depend on the formal recognition of the status of taxable person by tax authorities.
It is automatically acquired when it becomes a taxable person at the time of its acquisition first investments related to future economic activity.
On the other hand, from the caselaw of the Court of Justice on C-385/09 It follows from Nidera that the right to deduct arises at the time when the tax has become due and its formation is in no way dependent on the formal recognition of the status of taxable person by the tax authority, but on the existence on the part of the taxable person of an intention, confirmed by objective evidence, to conduct an economic activity within the meaning of the VAT rules.
In view of the above, the Director of KIS stated that the taxable person on the basis of Article 86 The law has the right to deduct VAT charged from VAT invoices documenting the acquisition of goods and services for the purpose of carrying out VAT-taxed activities issued to it since the start of business activity, in declarations VAT-7 for the relevant settlement periods in accordance with the principles laid down in the above-mentioned provisions. Article 86 Act, although the actual registration declaration VAT-R has only been made by the applicant 15 July 2020, on which he indicated the date of commencement of business 11 March 2020
Written by Leszek Dutkiewicz, partner of 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.