The Ministry of Finance has notified that it is finishing work on a list of good VAT practices. This is to be a set of rules which will ensure that negative consequences are avoided if cooperation with an unfair counterparty is established.
The government's announcements have been on this issue for a long time and are not news. Unfortunately, there is great doubt that such a list will actually lead to a breakthrough in differentiation.
Verification of counterparties
The Ministry of Finance tried to advise on this issue almost a year ago. The form of advice was to respond to the no. 14059 of 19 July 2017 You could read there that an entrepreneur should be careful in the case of trade in high-risk goods such as coffee, tea, electronics and scrap metal. Another advice included a suggestion to be cautious also when someone proposed a so-called good deal with EU counterparties.
Before this interview was released, you could see similar advice on information posters in tax offices. From this perspective, it is difficult to expect a breakthrough.
„List of good practices” as a square wheel
The most popular way to extort VAT is the so-called tax carousel. Entrepreneurs who want to enrich themselves in this way rotate the same product several times and then apply for a VAT refund. If such a carousel is made up only of tax frauds, the risk of tax authorities getting suspicious is increased.
For this reason, dishonest counterparties are looking for honest counterparties who try to pull into the carousel so as to make the whole process credible. There is no unusual case in which someone was accused of being abused in VAT, although he did not intend to.
Honest entrepreneurs know very well that they need to verify their contractors in order to avoid tax problems. However, it is not known exactly what action should be taken to be sure to avoid unjust accusations.
The list of good practices that the Ministry of Finance is working on is to help. There are fundamental doubts that this list will play its role in practice. Its very creation can be described as a square of a circle, i.e. an impossible task.
The jurisprudence of the administrative courts and the EU Court of Justice are the most important sources in this regard.
How can you protect yourself from dishonest partners?
For now, we're still waiting for a list of reasons for due diligence. As regards the verification of MF counterparties, it advises in the above-mentioned interpretation that the entrepreneur should:
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confirm the status of the entity by checking it on the website: https://ppuslugi.mf.gov.pl/ in the service provided by the Ministry of Finance: ‘Checking the status of the entity in VAT’ on the tax portal where the taxpayer can carry out the ongoing verification of the counterparty. The service makes it possible to verify whether the entity is an active, exempt VAT payer or not registered as a VAT taxable person, which is extremely important in documenting the conduct of an economic transaction.
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confirmed the EU VAT number (VIES) on the website: http://ec.europa.eu/taxation_customs/vies/?locale=PL – allows to obtain a confirmation of the activity of the VAT number of the entity in accordance with Article 31 Council Regulations No. 904/2010 of 7 October 2010
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has submitted a request for confirmation to the competent head of the tax office as to whether the taxable person is registered as an active or exempt VAT taxable person, in accordance with Article 96 Article 13 Tax laws on goods and services, or telephone contact with the tax office to confirm the status of the counterparty.
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has checked the entity in the National Court Register or Central Information and Records of Business Activity,
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verified the entity in REGON,
Operators who trade in ‘sensitive’ goods (including those mentioned in Annex 13 Goods and Services Tax Act) should check whether the seller is included on the date of delivery of the goods in the list of entities which have lodged a guarantee of the appropriate amount ( http://kaucjagwarancyjna.mofnet.gov.pl/ ) Additionally, to an honest entrepreneur.