A beneficial institution for taxpayers, commonly referred to as a relief for bad debts, was introduced into the Act of 11 March 2004 on tax on goods and services on the day 1 June 2005 and regulated in Article 89a(89b). Its introduction follows from the European Union Directive, which allows implementation into national legal systems.
Its existence has been controversial from the start, and its application has required many activities based on expertise. This was a convenience for taxpayers, but was not friendly for procedural reasons.
Done at 1 January 2013 The change in legal status reduces formality in the application of relief to bad debts and clarifies the ambiguities arising from the institution's implementation.
Regulations Article 89a The Goods and Services Tax Act allows for adjustments to the tax base and the tax due on the supply of goods or services which have occurred in the territory of the country in relation to claims which have been declared irrecoverable. No additional steps are required to confirm this.
The only reason is the passing of time.
For the benefit of creditors, this time has been shortened from 180 to 150 days, and the claim is similar to the default of the claim when the debtor fails to settle the obligation within the time limit 150 days from the date of expiry of the period contained in the contract or on the invoice, in future that period may be further reduced.
Start 2013 the conditions that must be met in order to settle the tax on irrecoverable claims have also been changed. These include the supply of goods or services to a taxable person who is an active VAT taxable person and who is not in insolvency or liquidation proceedings. In addition, on the day preceding the day on which the tax return was corrected:
- • the creditor and the debtor are active VAT payers,
- • the debtor is not in liquidation or insolvency proceedings,
- • since the end of the year in which the invoice was issued has not elapsed two years.
The correction shall take place during the period during which the irrecoverability is similar, i.e. the period during which the period expires. 150 days from the payment deadline. Together with the correction, the competent tax office should be notified of its performance and the amount and particulars of the debtor.
The obligation to inform the debtor of the intention to correct the tax due as well as the expectation was abolished 14 the days from receipt of the acknowledgement of receipt of this notification before the debtor.
This change is certainly a direction forward for this institution, effectively reducing costs and the complexity of the application of the relief.
For the debtor, from the beginning of the year 2013, based on Article 89b The Act on Goods and Services has a compulsory obligation to correct the input tax with expiry 150-the day-limit. It takes place in the settlement of the period in which that deadline expired rather than in the period in which it counted the tax.
This obligation against the background of the current rules is independent of the creditor's correction. If the tax authorities identify a breach of the obligation to make an adjustment before the debtor, an additional tax liability of 30% the amount of tax on unregulated invoices.
This obligation shall not be established in respect of natural persons who are liable for the act in question to carnoscarat.
Both the creditor and the debtor, in the event of a partial payment of the claim, correct the tax only in respect of the unregulated part. Repayment of the commitment after correction by one or the other party causes that the value of the tax due or charged for the period during which the repayment took place should be increased again.
In conclusion, an institution that is extremely needed to recover a paid invoice tax that has not been regulated has changed its face. The Amendment that entered into force 1 January 2013 has made it easier and requires fewer procedural steps. It is thus less time-consuming and costly, and therefore more beneficial to the taxpayer.