The Ombudsman for Small and Medium-sized Entrepreneurs critically referred to the changes proposed in the bill on the amendment of the Goods and Services Tax Act and the Act – Bank Law on Binding Rate Information (WIS) – project number in the List of Legislative and Program Works of the Council of Ministers – UD118.
This amendment to the Goods and Services Tax Act is designed to simplify and modernise VAT settlements, operating under the name SLIM VAT. Unfortunately, in addition to some positive solutions, it includes proposals for changes assessed by the Ombudsman as not conducive to entrepreneurs.
These proposals include, for example, the temporary application of Binding Rate Information (by 3 years, now, as a general rule, apply without a time limit) and the lack of protection for the addressees of the WIS when the goods or services covered by the WIS are part of the activities defined in Article 5(5) Goods and Services Tax Act.
Temporal application of the tax law institution, which is the WIS, in particular with a protective value for taxpayers, constitutes a breach of the principle of legal certainty for the Ombudsman of SMEs
The temporal application of the tax law institution, namely the WIS, which, in particular, protects taxpayers, constitutes a breach of the principle of legal certainty and constitutes an additional administrative burden for entrepreneurs (related to the need to "keep" the validity of the WIS and apply for another WIS in the event of the expiry of the existing one).
All the more so, the issued VIS may expire by law in the event of amendment of the VAT rules or be repealed/amended in certain cases.
At the same time, the SME Ombudsman does not share the argument from the justification for this change that the introduction of the period of validity of the WIS will contribute to greater uniformity of decisions.
Another proposal for amendments, which is critically assessed by the Ombudsman of SMEs, concerns the deprivation of the taxpayer's protection resulting from the binding Static Information held by the tax authority, when the decision taken by the tax authority indicates that the subject matter of the WIS is part of a transaction which has been considered to be an abuse of the law on the ground Article 5(5) Goods and Services Tax Act.
Without questioning the objective, i.e. safeguarding the state budget against fraud by unfair taxpayers, it should be noted that the proposed amendment constitutes, in the opinion of the Ombudsman, an overregulation.
It follows from the wording of the VAT abuse clause that the application of the clause in question alone is sufficient in practice to deprive the WIS obtained by the unfair taxpayer of the binding power.
"SME entrepreneurs undoubtedly need to simplify the tax system, especially in the area of VAT. For this reason, each initiative enjoys. Nevertheless, the overall positive impact of the proposed changes is distorted by some proposals which should be assessed negatively from the business perspective. An example is the proposed changes in the field of Binding Rate Information included in the so-called VAT SLIM package – says Paweł Satkiewicz, tax advisor, chief consultant at the Office of the Ombudsman of Small and Medium Entrepreneurs.