The bill amending the Goods and Services Tax Act and the Law on Measurements (Law) contains a proposed solution for combating unfair practices, which are mainly done by workers of construction shops and petrol stations. These practices rely on the payment of receipts left by customers on invoices to entrepreneurs or companies. This allows these operators to deduct VAT as well as to document income tax costs.
The Act proposes a new provision, i.e. Article 106b(4) in the Act of 11 March 2004 on tax on goods and services (VAT). According to this provision, an entrepreneur who will receive a receipt after a given transaction without a NIP will not subsequently trade it for a VAT invoice. Thus, the right to deduct this duty will be stripped.
As a result, according to information from the Ministry of Finance, a given entrepreneur should, in due care and in his own interest, learn from his counterparty whether the fiscal cash is printing receipts from the NIP.
It should be pointed out that this type of fiscal cash register is not yet popular on the market, and it is not expected that entrepreneurs will buy new copies soon.
The Ministry of Foreign Affairs disagrees with this proposal. According to the information obtained from this resort, ‘Entrepreneurs should not lose their right to deduct tax simply because the seller's cash register does not print sales confirmations from the buyer's NIP’.
The view of the Ministry of Foreign Affairs agrees with the Attorney General of the Republic of Poland, who recalled in this regard the established case law of the Court of Justice of the European Union. According to the case law, formal issues, i.e. NIP on the document, cannot decide on the scope of the right to deduct VAT.
In addition, the Ministry of Foreign Affairs indicates that the proposed solution in the form of Article 106(4) VAT laws are incompatible with the EU VAT Directive, more specifically Article 220.
This is because using a new provision, for example, if the seller's fiscal cash had not printed the receipts from the NIP, the transaction would have taken place, but it would not have been properly documented.
In addition, as also highlighted by the Ministry of Foreign Affairs, there are no provisions in the EU Directive that would entail the right to deduct tax with NIP.
In its negative opinion on the proposed changes, the General Prosecutor's Office of the Republic of Poland also refers to the case law of the Courts of Justice of the European Union as regards the possibility for taxable persons to exercise the right to deduct VAT if the substantive conditions, i.e.
the transaction, were met, were not fraudulent, but certain formal conditions were not met (e.g. in accordance with the proposed changes, the obligation to include NIP on the document).
This is confirmed by the judgments of the Court of Justice of the European Union of 21 October 2010, file number C-385/09, or 1 March 2012, file number C-280/10.
Although the purpose of the changes is correct, i.e. the elimination of fraudsters from the market, the proposed changes are incompatible with the rules Directive 2006/112 and restrict the possibility for taxpayers to exercise their basic right of deduction.