Last quarter 2013 seems to be a good time to review the most important changes in VAT, which, without exaggeration, can be described as revolutionary in the course of 20 years of operation of this public tribute in Polish tax law. From 1 January 2014 A number of VAT accounting rules will be amended.
Businesses must prepare for them through a detailed analysis of the procedures in place in their companies and the individual interpretations received relating to VAT issues.
The forthcoming legislative changes will not be irrelevant to the correct functioning of financial and accounting systems, which will certainly need to be updated, together with the knowledge of those operating them.
first It is essential to change the date of the tax obligation. Currently, in most cases the tax obligation arises when the VAT invoice is issued, but no later than 7 days from the date of issue of the goods or service.
The current rules also provide for a number of specific rules for the formation of a tax obligation, such as for construction and transport services.
According to the passed amendment of the Act of 11 March 2004 on tax on goods and services (Journal of Laws, item 535, hereafter: VAT Act) on 1 January 2014 repealed Article 19 VAT Act and as introduced Article 19a the tax liability will arise when the goods or services are supplied.
This is a significant change which will also apply to a significant number of activities covered by the regulations so far indicating the specific moment in which the tax obligation arises.
These changes will also lead to a reduction in the tax value of the invoice, which from now on (in most cases) will not be relevant for the time when the tax obligation arises. Currently, the invoice document should be issued no later than the deadline 7 days from the date of issue of the goods or service.
According to the VAT Act Article 106i(1) the invoice is issued no later than 15. the day of the month following the month in which the goods were delivered or the service was made.
The VAT Act in its new wording provides for exceptions to this regulation but according to the general rule, in extreme cases, the invoice can be issued after 45 days from the date of delivery or performance of the service.
It is also worth pointing out that the provisions on the issue of invoices currently contained in the act constituting the regulation, as amended, have been transferred to the VAT Act and are in Article 106a-106q.
When discussing amendments to the VAT Act, the modification of the provisions relating to the tax base cannot be disregarded. The amendment is intended to cover the introduction of provisions specifying the elements to be added and excluded from the tax base.
What should be remembered, in accordance with the new regulations, the tax base includes taxes, duties, charges and other similar charges, additional costs such as commissions, packaging, transport and insurance costs (which may be relevant in the case of car leasing and OC insurance costs) charged by the supplier or supplier from the customer.
When indicating changes to the rules contained in the VAT Act, it is also appropriate to take into account amendments to the provisions concerning the moment when the right to deduct input tax was created.
At present, according to the general principle expressed in Article 10(1)) The VAT Act has the right to reduce the amount of tax due for the period during which the taxable person received the invoice or customs document.
According to the amended provisions, the right to reduce the amount of tax due by the amount of input tax arises in the settlement for the period during which the tax liability arises for goods and services purchased or imported by the taxable person.
This amendment will certainly increase the work of taxpayers in preparing proper VAT accounts . This will happen as a result of the need to analyse the moment when the tax obligation arises for the supplier of goods or services.
Attention should also be paid to changes in the right to deduct VAT in the event of intra-Community acquisition of goods.
A change that will certainly interest the majority of entrepreneurs is certainly an unavoidable modification of the existing rules on the right to deduct taxes when purchasing passenger cars.
To 31 December 2013, as a general rule for the acquisition of passenger cars and other motor vehicles with a maximum permissible mass not exceeding 3.5 deduction tonnes 60% VAT but not more than 6,000 PLN.
This provision shall expire on 1 January 2014 in view of the expiry of the time limit for the European Commission's authorisation to apply the VAT deduction limit for the purchase of passenger cars. At the moment, the wording of the regulations relating to this issue has not been determined.
It is known that the Ministry of Finance has requested permission to introduce a new restriction.
At present, it is not possible to determine 100% the extent to which the provisions laying down the scope of the limitation of the right to deduct VAT from passenger cars from 1 January 2014 Therefore, it seems appropriate to postpone the purchase of a new passenger car used in business activities until next year.
These changes are only key modifications to the VAT Act.
In preparation for the above mentioned VAT revolution to start on 1 January 2014 The changes that entered into force in the year should also be taken into account 2013, including those that apply from 1 October 2013 This includes changes in the descriptions on fiscal receipts, the joint and several liability of the buyer for the seller's tax obligations (including the wholesale sale of sensitive goods, i.e. steel, fuel) and the extension of the obligation to charge VAT on sensitive goods (the application of the reverse charge mechanism used in the scrap metal trade).
Therefore, we encourage you to consult the revised VAT rules and contact Russell Bedford experts.
All these problems will be discussed during the vat training.