The deregulation team for entrepreneurs set up by Prime Minister Donald Tusk, headed by Rafał Brzoska, presented another proposal for a change in tax law, among which the idea of extending the group of entities exempt from VAT to lawyers and advisers deserves attention.
Currently under regulation Article 113(1) Act on 11 March 2004 on tax on goods and services (hereinafter ‘VATU’) Tax-free sales made by a taxable person established in the territory of a country where the value of the sale, excluding the tax, has not exceeded in the previous or current tax year the amounts 200,000 PLN.
This exemption is not general, since Article 113(13) VAT is provided for by a number of entities (tax collectors), which cannot benefit from such a right, including taxpayers providing legal services and advisory services, with the exception of agricultural advice related to the cultivation and rearing of plants and the rearing and rearing of animals, as well as the development and modernisation of a farm.
The proposed amendment is intended to facilitate (by reducing costs) access to legal assistance services especially for consumers or small businesses. Lawyers or advisers who provide their services to a given law firm on the basis of B2B contracts may also be able to reduce the accounting costs incurred by such entities (the need to calculate the VAT due).
One of the drawbacks of the idea will be the mere quota restriction – exemption only to the amount 200,000 PLN and the fact that such an exemption would in practice cover only small entities (one-person economic activity) would not be of any importance to larger firms or advisory offices. In the case of legal advisers who may be employed on the basis of a contract of employment, as well as in the case of other advisers, this may strengthen the phenomenon of preference for B2B contracts.
It is also not known whether a circle of legal or advisory service providers would remain exhaustively limited to, for example, professional providers of legal or advisory services, e.g.
attorney, legal adviser, tax advisor, restructuring adviser, financial advisor, or such an exemption would simply cover all legal and advisory services providers without the appropriate powers. Of which second This could lead to difficulties in interpreting "legal services" or "consultation services".
A negative position on the proposed change from the Ministry of Finance may also be expected, which can classically argue with the reduction of budgetary revenue.