Amendment of the provisions of the Act of 11 March 2014 on tax on goods and services (Journal of Laws, item 1054, as amended, hereinafter: VAT Act), which entered into force on 1 January 2014 has brought many changes for taxpayers of this tax. It concerned, among other things, the rules for determining the moment when the tax obligation was created and the rules for issuing invoices documenting activities subject to VAT.
However, the amendment referred to above has also, to some extent, affected the provisions on the sale of cars which are part of the company's assets. These changes should be assessed positively.
To the end 2013 Regulation of the Minister of Finance of 4 April 2011 implementing certain provisions of the Goods and Services Tax Act (Journal of Laws of 2013, item 362, Further: Regulation of 4 April 2011). It was predicted in section 13 section 1 point 5, that the supply of passenger cars and other motor vehicles by taxable persons who, when purchasing these cars and vehicles, had the right to reduce the amount of tax due by the amount of input tax 50% or 60% the amount of tax:
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- specified in the invoice, or
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- the resulting customs document, taking into account the amounts resulting from the decisions referred to in Article 33(2)(3) and Article 34 Act, or
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- due for intra-Community acquisition of goods, or
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- due on the supply of goods for which the taxable person is the purchaser
- - not more than adequate 5,000 PLN or 6,000 PLN, if these vehicles and vehicles are used goods within the meaning of Article 43(2) VAT Act.
In turn Article 43(2) The VAT Act indicated that second-hand goods are understood to mean movable goods whose period of use by the taxable person making their supply was at least six months after the acquisition of the right to dispose of those goods as the owner.
According to the above mentioned provisions, the application of the exemption was limited by the condition that the car in question was considered used, which was not always possible except for the possibility of VAT exemption for the supply of the car by the entrepreneur
However, as of 1 January 2014 has been repealed Article 43(2) VAT laws thus eliminating the definition of second-hand goods. As a result of the above procedure, the legislator was required to amend the rules on the VAT exemption for the supply of cars referred to in the Regulation. 4 April 2011
Therefore, the Regulation of 4 April 2011 was repealed and its place in the area of VAT exemptions was replaced by a regulation of the Minister of Finance dated 20 December 2013 on exemptions from and conditions for the application of customs duties on goods and services (Journal of Laws of 2013, item 1722, Further: Regulation of 20 December 2013). It is in section 3 section 1 point 20, that the supply of passenger cars and other motor vehicles by taxable persons who, when acquiring these cars and vehicles, had the right to reduce the amount of tax due by the amount of input tax 50% or 60% the amount of tax:
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- specified in the invoice, or
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- the resulting customs document, taking into account the amounts resulting from the decisions referred to in Article 33(2)(3) and Article 34 Act, or
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- due for intra-Community acquisition of goods, or
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- due on the supply of goods for which the taxable person is the purchaser
- - not more than adequate 5,000 PLN or 6,000 PLN.
By comparing the conditions of application of the exemption on the supply of cars resulting from the repealed section 13 section 1 point 5 Regulations of 4 April 2011 with the conditions indicated in section 3 section 1 point 20 Regulations of 20 December 2013 it must be stated that there is no condition in the existing legislation that the car is used.
This change should be considered to be beneficial for taxpayers as it facilitates the benefit of VAT exemptions.
It is likely to respond to the case law of the administrative courts indicating non-compliance with EU law with the condition of recognition as a commodity used to obtain the right to benefit from an exemption resulting from section 13 section 1 point 5 Regulations of 4 April 2011 An example of such a ruling may be the judgment of the Supreme Administrative Court of 28 February 2013, reference no.
I FSK 627/12. The Court of First Instance stated in that judgment that ‘the standard Article 43(1)(2) The law raises concerns as to its compatibility with Article 136 lit.
(b) Directive 2006/112, providing that Member States exempt supply transactions of goods where the acquisition or use of VAT was not deductible in accordance with Article 176.
Thus formulated in Article 43(1)(2) ori dic section 2 the condition that the supply of goods for which the supplier did not have the right to reduce the amount of tax due by the amount of input tax is exempt from tax only if the taxable person has physically used that goods for a period of time 6 months, beyond the explicit and unconditional content of the standard Article 136 lit.
(b) Directive 2006/112. Formulating such a condition based on Article 131 This Directive should also be considered unjustified, as such a condition cannot reconcile the substance of the exemption, as is the case in the present case."
In view of the above, it must therefore be concluded that the breakthrough VAT amendment which the legislator has granted to taxable persons 1 January 2014 did not deprive them of the right to benefit from the VAT exemption in the case of the sale of a passenger car previously used for the purpose of their business, taking into account certain conditions which should be examined by taxpayers in respect of a particular fact.