VAT changes postponed until July 2015

On 14 January 2015 The draft Act amending the Goods and Services Tax Act and the Public Procurement Law (hereinafter: Draft amendment of the VAT Act) was submitted to the Sejm. After I read the Draft amendment of the VAT Act held 4 February 2015, it was addressed to the Public Finance Commission, which 5 February 2015 issued a report on the Draft amendment of the VAT Act. The most important changes to the day will be presented below. 1 July 2015

Finally, the guarantee deposit is to be amended (it is a security for payment of the tax in connection with the supply of the goods in question). In Annex 13 VAT Act; the entity supplying these goods may submit it to the tax office provided that it does not have any tax arrears.

In the current form it introduces quite significant changes to Act dated 11 March 2004 on tax on goods and services (Journal of Laws of 2011, item 1054, hereinafter referred to as the VAT Act), concerning the so-called reverse charge (this is where the obligation to settle the tax on goods and services is not on the supplier but on the buyer), the summary information or the relief for bad debts.

According to the draft amendment of the VAT Act, the reverse charge is to be additionally covered (by introducing headings 21a, 22a – 22c and 28a – 28d to Annex 11 to the VAT Act:

• • ribbed sheets of non-alloy steel, marked with the symbol PKWiU (short from: Polish classification of products and services) – 24.33.20.0 (proposed heading 21a),
• • Unwrought or semi-manufactured gold or powdered gold — only sampled gold 0.325 or more, except investment gold within the meaning of Article 121 VAT Act, subject to heading 22b, the symbol of PKWiU: ex 24.41.20.0 (proposed heading 22a),
• • investment gold as defined Article 121 VAT Act, regardless of the PKWiU symbol (proposed position 22b),

• Base metals clad with silver and base metals, silver or gold, clad with platinum, not further worked than semi-manufactured — only gold of a sample 0.325 or more, clad with platinum, not further worked than semi-manufactured, PKWiU symbol: ex 24.41.50.0 (proposed heading 22c),
• portable automatic data processing machines, such as laptops and notebooks, pocket computers and the like, only portable computers, such as tablets, notebooks, laptops, PKWiU symbol: ex 26.20.11.0 (proposed heading 28a),
• mobile phones or other wireless networks – only mobile phones, including smartphones, PKWiU symbol: ex 26.30.22.0 (proposed heading 28b),
• Video game consoles (used with television or a stand-alone screen) and other arcade or gambling equipment with electronic display — excluding parts and accessories, PKWiU symbol: ex 26.40.60.0 (proposed heading 28c),
• Jewellery and parts thereof and other jewellery products and parts thereof, of gold and silver or clad with precious metal — only jewellery parts and parts of other jewellery products of gold of the sample 0.325 or more, i.e. unfinished or incomplete jewelleryware and prominent parts of jewellery, including coated or clad with precious metal, PKWiU symbol: ex 32.12.13.0 (proposed heading 28d).

But this is not the end of the reverse load variations. According to the draft amendment of the VAT Act, it is to be applied when the purchaser is a taxable person registered as an active VAT taxable person. In addition, it will not apply if the total value of the goods in a single economic transaction involving those goods, excluding the amount of tax, does not exceed the amount 20,000 PLN (but this will only apply to goods listed in headings 28a to 28c Annex 11 VAT Act, i.e. mobile phones, laptops or consoles).

A single economic transaction will be considered to include a contract transaction ‘under which it occurs one or more supplies of the goods listed In items 28a-28c Annex 11 to the Act, even if they are made on the basis of separate orders or more invoices are issued documenting individual deliveries.’1. A single economic transaction will also be considered to include “more than one the agreement in question Under section 1d, where the circumstances surrounding that transaction or the conditions under which it was carried out deviated from the circumstances or conditions normally prevailing in the trade in the goods listed above In items 28a-28c Annex 11 to the bill.’

In addition, according to the draft amendment of the VAT Act, sellers will be required to submit to the tax office aggregate information on the supplies of goods and services provided under the reverse charge (according to the draft amendment of the VAT Act, they will be called ‘complementary information in domestic trade’). To be added Article 101a(3), the summary information in national circulation shall contain the following data:

• • „the name or names of the taxable person submitting the summary information in national trade and its tax identification number;
• • the name and tax identification number of the taxable person acquiring the goods or services;
• • the total value of supplies of goods and services provided for which the taxable person is the purchaser, in the cases referred to under Article 17(1)(7) and 8 – for individual purchasers.’

Another change will concern the so-called relief for bad debts. Where the debtor on the last day of the month on which they expire 150. the date from the date of expiry of the payment period specified in the contract or invoice is in insolvency proceedings or in liquidation, the obligation to correct the input tax will be excluded for that debtor.

The scope of the goods which are subject to the joint liability of the taxable person and the supplier, i.e. the goods listed, will also be changed In Annex 13 VAT Act. Change in position 12 Annex 13 VAT Act and will include:

• “Unwrought gold, gold in semi-manufactured forms or in powder form—only gold with a fineness below 325 parts per thousand”, PKWiU symbol: ex 24.41.20.0.

In addition to Annex 13 VAT laws, entries no. 13 – 17:

• • „Unwrought silver or in semi-manufactured form or in powder form’, PKWiU symbol: 24.41.10.0,
• • „Platinum, unwrought or in semi-manufactured form or in powder form’, PKWiU symbol: 24.41.30.0,
• • „Base metals or silver, clad with gold, not further worked than semi-manufactured — only silver, clad with gold, not further worked than semi-manufactured’, PKWiU symbol: ex 24.41.40.0,

• „Base metals clad with silver and base metals, silver or gold, clad with platinum, not further worked than semi-manufactured — only gold of a sample less than 325 thousands and silver, clad with platinum, not further worked than semi-manufactured’, PKWiU symbol: ex 24.41.50.0 and
• „Jewellery and parts thereof and other jewellery articles and parts thereof, of gold and silver or clad with precious metal — only jewellery parts and parts of other jewellery articles of gold of a sample less than 325 thousands, of silver and platinum, i.e. unfinished or incomplete jewelleryware and prominent jewellery parts, including clad or clad with precious metal’, PKWiU symbol: ex 32.12.13.0.

Finally, the guarantee deposit is to be amended it is a security for payment of the tax in connection with the supply of the goods in question). In Annex 13 VAT Act; the entity supplying these goods may submit it to the tax office provided that it does not have any tax arrears. The changes that will be made to the guarantee bond would in itself be the subject of a separate article, so here it is worth mentioning only a change in its amount. According to the draft amendment to the VAT Act, the amount of the guarantee deposit should be at least equivalent to 1/5 the amount of tax payable on the entity referred to above in the month in question for the value of the sale of the goods in question In Annex 13 The VAT Act, however, may not be less than:

• • 200,000 PLN, in the case of the supply of goods listed in headings 1-9 and 12-17 Annex 13 VAT Act,
• • 1,000,000 PLN, in the case of the supply of goods listed in headings 10 and 11 Annex 13 VAT Act.

The most important changes to the VAT Act, which are planned to enter into force on 1 July 2015