JPK_VAT in Poland: Key information and advantages for business owners

The Standard Audit File for VAT (abbreviated in Polish as JPK_VAT) is a tool that revolutionizes the way in which business owners report their tax records. Learn how JPK_VAT facilitates the operations of tax authorities and how companies benefit from it.

What is a JPK_VAT file?

The Standard Audit File for Tax (in Polish: Jednolity Plik Kontrolny, abbreviated as JPK) is a step towards improving the activities of tax authorities and standardizing the electronic tax records filed to tax offices. It is comprised of a set of financial records of a particular company presented for a given period.

The structure of JPK_VAT

The Polish Ministry of Finance divided JPK files into various structures regarding different data, with JPK_VAT being one of them. The obligation to prepare standard audit files for tax applies to all business owners who are active VAT payers, regardless of the size of their level of activity (i.e., micro, small as well as large businesses). The exception are taxpayers who only carry out activities which are exempt from value added tax. The exemption from the obligation to present and send details through JPK_VAT files does not apply, among others, to taxpayers performing transactions in the scope of intra-community purchase of goods and import and export of services.

Sections of JPK_VAT

The structure of JPK_VAT includes information originating from VAT purchase and sales records, saved in a strictly specified pattern and layout, as an XML file. A JPK_VAT file can be divided into three main sections: the header, the substantive section and the section with checksums.

Header

The header is used to identify the taxpayer and it contains details such as: the name and address of the company, its Tax Identification Number (NIP). The header also specifies the period that the data in the JPK_VAT file are reported for or the purpose of its submission.

Substantive section

In the substantive section, we will find the information on economic events that occurred in the period for which the JPK_VAT file is submitted. It contains all the records concerning sales invoices such as: the invoice number, the recipient’s details and their Tax Identification Number, the date of issue and the date of sales, as well as the net amount and the VAT amount. In case of purchase invoices, the files contain information such as: the supplier’s name and their Tax Identification Number, the date of issue and the date of receipt, the net and the VAT amount. What is more, this section contains a summary of individual invoices by the reason for taxation and indicates the outcome of the tax declaration (amount refundable, balance carried forward or amount due).

Audit section

The last section is used to verify the accuracy of the data presented in the substantive section. Among others, it includes the number of disclosed lines and the total amount of VAT.

Deadlines and obligations

Taxpayers subject to the obligation to send JPK_VAT files must fulfill this obligation by the 25th day of the month following the settlement period. If the deadline falls on a weekend or a public holiday, it is automatically postponed to the next working day. Taxpayers who pay VAT on a quarterly basis, they file only the records part for th first and the second period of the quarter. In the case of the third month, they submit both the records part as well as the summary declaration for the entire quarter. Here, it should be highlighted that in the case of quarterly settlement of VAT, the payment of VAT takes place after the end of the quarter.

Advantages of JPK_VAT

The goal of the introduction of the JPK_VAT file is to streamline the operations of the tax system with a faster and easier process used for the collection and analysis of the company’s records about transactions, reducing the number of fiscal audits but also of tax frauds. VAT is often the subject of extortion and other incorrect actions. That is why the transparency and accuracy of the presented data is so important to tax authorities. Some of the fiscal audits are carried out even without the taxpayer knowing about them.

The Standard Audit File for Tax benefits both the tax authorities and the business owners. It greatly improves fiscal control. The cross-verification of the presented data is faster thanks to the uniform structure of the file. The introduction of JPK_VAT in Poland streamlined and accelerated the communication between individual authorities. There is no need to review hard copies of documents because the sent files can be efficiently verified with IT tools. With the JPK_VAT, tax offices are able to quickly find sales that have not been disclosed by the taxpayer as well as to identify potential invoices where the right to VAT deduction does not apply.

Author: Sara Waszczyńska of the MDDP Outsourcing Office in Katowice