Minister of Finance in Teresa Czerwińska announces the maintenance of the upper VAT rate 23% and consultation on amendments to the Goods and Services Tax Act.
The draft changes on VAT are expected to enter public consultation in the autumn. According to the Minister of Finance, the Ministry intends to maintain the VAT rate at its current level. It would not have a negative impact on the prices for the final consumer, but it will certainly have an impact on the functioning of the business – the shape of contracts or reporting.
We invite you to training: VAT from scratch in 2018 taking into account the changes planned and introduced
Equalisation of rates in articles first Needs
In autumn, the MF will present the planned reforms of the VAT matrix to be simplified. As the head of the Ministry of Finance emphasises, this change does not have a fiscal objective, but is intended to make life easier for entrepreneurs who currently often do not know what VAT rates to apply.
All because there are paradoxical situations in the matrix. The same products have different VAT rates, depending, for example, on the shelf-life date, or the component ó in (on the understatements in the VAT Act we wrote HERE). MF intends to eliminate these absurdities, mainly by adding down rates, i.e.
applying where possible 5% instead of 8% The change is mainly intended for the product first the needs of food and hygiene products for women.
Combined Nomenclature (CN) and updated PPWIU
Details of the changes are to be known only in the autumn, but from 21 August In the Public Information Bulletin of the Council of Ministers, specific announcements of the MF can be found.
As we read in the BIP, the draft law amending the Goods and Services Tax Act provides, among other things, for a change in the way goods and services are identified for VAT purposes, by moving away from the application of the PKWiU 2008 for: the Combined Nomenclature (CN) in the field of goods and the current Polish Classification of Products and Services of PKWiU (2015) services.
This implies the introduction of the new VAT rate matrix mentioned above into the VAT provision.
New Ancillary Instrument for Rate Determination
The new law also plans to introduce a binding fee information institution (WIS) as an instrument providing certainty to taxpayers about the regularity of VAT taxation of transactions carried out. In this respect, the proposed provisions will define the procedure for issuing the VIS and provide adequate protection for the taxpayer in the use of the VIS.
Reduction of taxes dependent on economic situation
Other provisions of the VAT Act, currently based on PKWiU, are also planned 2008.
They are to be the result of the application of a new means of identifying goods and services, such as a certain rationalisation of their scope, especially in a lump sum scheme for farmers, including the reverse charge system, and in the joint and several liability introduced.
The MF also recorded in the Act the temporary maintenance of rates 23% and 8% (the rate of flat-rate tax refund for a farmer in flat-rate and flat-rate for a taxable person in the provision of tax services) and the dependence on a reduction of those at a time appropriate to the public finances determined by applying the relevant indicator;
In view of the changes planned, especially the sectors affected (food or pharmaceutical) should rethink the strategy of preparing for changes. In this regard, we propose matching new rates with your business model, as well as reporting and the legal environment. Feel free to contact us.