The Ministry of Finance plans to implement subsequent amendments to the VAT rules to enter into force at the beginning 2015 The proposed amendments concern, inter alia, the extension of the so-called reverse VAT as well as the amendment of the rules on the establishment of the place of supply of radio and television telecommunications services and provided by electronic means.
Reverse load — extension of the scope
Extension of the so-called reversed VAT, i.e. transfer of the obligation to transfer VAT to the tax office from the seller to the buyer and extension of the so-called joint and several liability for the unregulated VAT are part of the changes that the Ministry of Finance provided for in the Project of the draft amendment of the VAT Act dated 25 June 2014
From 1 January 2015 an extension of the list of goods subject to the reverse charge contained in the current existing Annex 11 to the VAT Act. This list is to be extended to include items such as mobile phones and smartphones, gold in the form of raw material or semi-finished material and the supply of investment gold and sheet metal.
On the basis of the proposed amendment, the Ministry cites analyses of the gold market, the electronics market – mobile phones. It has been pointed out that the industry is vulnerable to tax fraud, as the controls carried out by tax authorities show that the activity of unfair entities is increasing. The introduction of a reverse charge mechanism for these categories of goods is intended to combat such tax fraud.
At the same time, MF envisages the introduction of a quota threshold for the application of reverse charge on a principle Article 17(1)(17) – in respect of goods indicated In Annex 11. The reverse charge mechanism is to be applied to supplies for which the value of the goods, free of tax, exceeds the amount 20,000 PLN.
In order to ensure the effectiveness of the reverse VAT mechanism, the Ministry of Finance provides for the obligation to submit summary information to be submitted by sellers. This information is to include aggregate data on transactions in the reverse charge for which the tax should be settled by the purchaser.
Relief for bad debts
The assumptions for the draft amendment provide for a revision of the provisions on the so-called relief for bad debts. It allows the creditor to reduce the tax base and the tax due if the debtor fails to pay for the goods and services purchased within a specified period. The debtor must then reduce the deducted tax accordingly.
The Ministry of Finance intends to remove the interpretational doubts related to the relief of bad debts by clarifying that it cannot be applied in a situation where there are family, capital, property or professional links between the creditor and the debtor (work relationship).
Proportion to be determined with the head of the tax office
Another amendment concerns the deduction of input tax on purchased goods and services used for mixed purposes.
The Ministry of Finance wishes to introduce the possibility of agreeing with the head of the tax office chosen by the taxable person on the calculation of the proportion of the VAT deduction from the goods and services used by the taxable person to activities subject to and not subject to VAT.
At the request of the taxable person, the head of the tax office would recognise the correct manner of determining the proportion or irregularity of the proportion, indicating the method which will correspond most to the particularity of the taxable person's business.
Guarantee deposit
The Ministry of Finance also provides for a number of changes in guarantee bail. These changes would concern:
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- Minimum and maximum bail for fuel sellers (1,000,000 and 10,000,000 PLN);
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- To specify that interest is not due on the refunded guarantee deposit;
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- Determining the jurisdiction of the tax authority in the event of a change in the jurisdiction of the tax office – the office responsible for the bailout is to be the ‘new’ office;
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The introduction of a provision that, in the event of an entity making a request for a deferred payment of VAT, it will be treated as an entity with tax arrears and the deposit will be used in that part to cover arrears.
New rules on the location of telecommunications services
Another amendment provides for a draft Act dated 15 April 2014 amending the Goods and Services Tax Act and the Act – Tax Ordinance, which is the result of the implementation of the EU VAT Directive into national tax rules.
The amendments will not cover the number of taxpayers as early modifications 2014, But they're important because for the time being first domestic entrepreneurs will be able to settle in Poland for taxes to be paid abroad.
According to the project, the place where the telecommunications, broadcasting and electronic services are provided will be the place where the recipient is established, has his permanent residence or usually resides, which means a departure from the principle of determining that place based on the place of establishment of the service provider.
The new rules will apply to services provided to non-taxable persons, i.e. final consumers. In addition, taxpayers will be able to use a small one-stop shop (MOSS - Mini One Stop Shop) - an IT system for VAT settlement by service providers.
This will allow taxable persons providing telecommunications, broadcasting and electronic services to provide services to non-taxable persons in Member States where they are not established.
Thanks to the changes, the service provider will be able to avoid the need to register in each Member State where its services have customers, as the Member State of identification will transmit the declarations together with the amount of VAT paid to the relevant Member States of consumption via the communication network
The proposed changes to the Resort are to be introduced from the outset. 2015, However, the legislative process in this area is in the initial phase, so both the scope and date of entry into force of the amendments in question may change.