Date 1 January 2016 provisions have entered into force relating to a new way of deducting expenditure incurred both in connection with the pursuit of an economic activity and for purposes other than economic activity in respect of the right to reduce the amount of tax due by the amount of input tax.
Act dated 9 April 2015 amending the Goods and Services Tax Act and the Public Procurement Law (Journal of Laws of 2015, item 605) introduced a provision Article 86(2a-2h), which replaced the provisions Article 86(3-7a) determining the rate of deduction of expenditure incurred in connection with and not related to the activity In the Act dated dated 11 March 2004 on the tax on goods and services (hereinafter the VAT Act), Journal of Laws of 2004, item 535 as amended.
Article 86(2a) The Goods and Services Tax Act indicates that in the case of the acquisition of goods and services used both for the purposes of the taxable person’s economic activity and for purposes other than economic activity, except for personal purposes to which it applies Articles 7(2) and 8(2), and the objectives in question under Article 8(5) - in the case referred to in that provision, where it is not possible to assign those goods and services in full to the taxable person's business, the amount of input tax in question Under section 2, is calculated in accordance with the method of determining the extent to which goods and services purchased are used for business purposes, hereinafter referred to as ‘the method of determining the proportion’. The method of determining the proportion should correspond most to the particularity of the activity carried out by the taxable person and its acquisition.
As stressed in the justification for the introduced Act, the amendments aimed at adapting Polish regulations to EU regulations. The amendment taken into account was also due to judgments of the Court of Justice of the European Union on dated 8 November 2012 Finanzamt Hildesheim v BLC Baumarkt GmbH & Co. KG.
C-511/10 in conjunction with the judgment in the case with 13 March 2008 Securenta Göttinger Immobilienanlagen und Vermögensmanagement AG v Finanzamt Göttingen, C-437/06 to propose examples of methods for VAT deduction for goods and services used for mixed purposes (subject to and not subject to the VAT system).
This regulation has been introduced especially for local authorities, which, in the field of public tasks and other activities, including civil law contracts, will now be able to deduct VAT using pre-proportions.
The method of deduction is detailed in the Regulation of the Minister of Finance dated 17 December 2015 on how to determine the extent to which goods and services purchased are used for business purposes for certain taxable persons (Journal of Laws of 2015, item 2193).
Furthermore, the explanatory memorandum states that the indication of how to determine the ratio of deduction of input tax for local government units will provide certainty for these taxpayers in the application of the rules.
However, they have been left with the possibility of using another, in their assessment, more representative way of determining the proportion of tax deduction.
The legislator does not impose the method of calculating the preproportion. Gives the option in the recipe Article 86(2c) The VAT Act chooses how to determine the proportion, can be used in particular the following data:
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the average annual number of persons engaged exclusively in economic activities in the overall average number of persons engaged in and outside economic activities; This method, based on the criteria for the allocation of persons for specific work, will not be useful in practice.
Usually, the public sector does not make such a strict division (it would have to result from employment contracts/regulations, etc.). Persons employed by such taxable persons perform different activities and rarely so closely allocates tasks among employees;
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average annual number of working hours allocated to related work with economic activity in the overall average number of working hours allocated to and outside economic activities; Similar comments are made on this method. The hourly breakdown is not applied by taxpayers either, and it is difficult to determine and estimate. Such a breakdown key would have to be based on source/audience documents.
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the annual turnover of the economic activity of the taxable person in the annual turnover of the economic activity plus revenue received from other activities, including the value of subsidies, subsidies and other subsidies of a similar nature, received for the financing of activities other than economic activities carried out by that taxable person;
Local government entities and other entities that carry out economic activities both in taxed terms and for another purpose could determine the preproportions on the basis of data for the previous tax year. In contrast, taxable persons starting in a given tax year the pursuit of a taxed economic activity as well as other activities can calculate estimates of preproportions in agreement with the head of the tax office.
However, the proposed changes were not accepted by both doctrine and the legal environment. On first However, individual interpretations of tax law must wait. However, they may resolve any doubts about the application of the new rules.