Changes in VAT in Poland in 2023
The new year will bring taxpayers in Poland numerous changes in the value added tax (VAT) as well as in other tax regulations. Most changes regarding VAT in 2023 result from another package of “facilitations for taxpayers” called SLIM VAT (Simple Local And Modern VAT). What is more, the Ministry of Finance has recently provided explanations on establishment and functioning of a VAT Group.
Changes in SLIM VAT
In 2023, the limit of revenue which determined whether a taxpayer could use the preferences which would give them the small taxpayer status will change. At the moment, the status of a small taxpayer applies to entities which generate yearly revenue not higher than EUR 1.2 million. In the new year, the limit will be increased to EUR 2 million.
New regulations give the polish taxpayer a chance to use the funds accumulated on the VAT account for certain other purposes. So far, it has been possible to use the funds from the VAT account solely for purposes of:
- income tax,
- VAT,
- social security contributions,
- duties and excise,
- certain public law liabilities.
After the changes, the above list will be expanded by:
- the charge on foodstuffs, the so-called sugar tax,
- retail sales tax,
- tonnage tax,
- minerals extraction tax,
- charge on alcoholic beverages in small bottles,
- flat-rate tax on value of production marketed, the so-called shipbuilding tax.
SLIM VAT 3 also regulates issues connected with the application of a currency exchange rate to convert correcting invoiced issued in foreign currency. When converting a correcting invoice, the exchange rate from the original invoice should be used. The one exception are collective correcting invoices that must be converted according to the exchange rate of the National Bank of Poland on the day before the date of issue of the correcting invoice.
Penalties in Polish VAT
Other significant changes regarding VAT in 2023 include the new regulations concerning sanctions used in VAT. So far, their rate was strictly determined at 15%, 20% and 30%. After the changes, the Tax Authority will be able to apply sanctions up to 15%, 20% and 30%. It might be surprising, though, that there will be a possibility of withdrawal from the use of a sanction in VAT, if the taxpayer’s actions are considered unintentional and do not result in a reduction of tax liabilities.
INTRA-COMMUNITY ACQUISITION OF GOODS
What is more, important changes in VAT will be implemented within the scope of tax deduction from invoices documenting intra-Community acquisition of goods. Currently, in order to be able to deduct VAT, the taxpayer would need to receive the invoice documenting the acquisition not later than within 3 months from the date on which the tax liability arose. The above principle has been abolished and the taxpayer will have the right to deduct VAT in the month in which they declare the payable tax.
ISSUANCE OF BINDING RATE INFORMATION
Starting from the new year, the fee for issuance of binding rate information will no longer apply. Binding rate, excise, tariff and origin information will be issued only by the Director of the National Tax Information.
ISSUING OF ADVANCE PAYMENT INVOICES
Changes in VAT in 2023 will also cover regulations within the scope of issuing of advance payment invoices that allow the taxpayer to issue one invoice provided that they will receive an advance payment and provide the service/sell the goods in the same month. So far, the taxpayer would need to document each advance payment by issuing an advance payment invoice.
MAKING MULTI-ANNUAL ADJUSTMENT
Based on the new regulations, taxpayers that conduct mixed operations will be able to resign from making the multi-annual adjustment. Such an opportunity will be available only if the difference in the calculated proportion does not exceed 2 percentage points, provided that the value of such difference does not exceed PLN 10,000. Moreover, as a result of new regulations, taxpayers with a sale structure coefficient exceeding 98% will be able to assume that the proportion is 100%, provided that the non-deductible tax value is lower than PLN 10,000 (so far, the limit has been PLN 500).
VAT Group – Changes in 2023
On 1.01.2023, new regulations will become effective with regard to establishment and functioning of a VAT Group i.e., a taxpayer comprising of multiple related entities. Transactions between members of the group will not be covered by value added tax which will bring a considerable financial advantage for many companies.
In October, the Ministry of Finance published explanations regarding, among others, establishing and functioning of VAT Groups. The principles concerning settlements between entities of a VAT Group were also taken into consideration.
Author: Aneta Żelisko, Senior VAT Specialist at MDDP Outsourcing.
Sources:
Tax explanations of the Minister of Finance within the scope of VAT groups.
