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The White List of VAT payers – peculiar cases

18.06.2024

The so-called White List of VAT payers was introduced in Poland in September 2019 and the entrepreneurs still have doubts in certain situations as to the rules determining verification of contractors. Doubts may even refer to the determination of the correct date of verification of the contractor’s status and account. Decisions of administrative courts might sometimes be helpful or even necessary.

The White List was introduced in Poland on 1 September 2019. However, its functioning gives rise to many questions and doubts among entrepreneurs.  

When is it necessary to verify a contractor? 

One of the issues that might give rise to doubts is the date of verification of the contractor on the white list. As a general rule, we verify the contractor as of the date of the transfer order, unless the entrepreneur operates on a market regulated by the act, which stipulates a mandatory participation of a third party in the transfer.   

In the recently resolved case regarding an individual interpretation, Przedsiębiorstwo Polskie Sieci Elektroenergetyczne S.A. believed that in their particular situation, the verification should take place on the date of issuing a transfer disposition to the agent (account administrator) and not on the date on which the money was sent from the entrepreneur’s account. The case was dealt by the Provincial Administrative Court in Warsaw and regarded a specific situation, namely a regulated market – transactions ordered by Polskie Sieci Elektroenergetyczne S.A. to their payment agent i.e., Zarządca Rozliczeń S.A. Transactions between those two entities were regulated in detail by the Act of 8 December 2017 on capacity market (consolidated text: Polish Journal of Laws of 2023, item 2131). Due to the above, the transactions in question did not constitute transactions between standard market participants.   

Bearing in mind the above, the operator Polskie Sieci Elektroenergetyczne filed a question to the Polish National Tax Information whether, pursuant to 15d section 1 point 2 of the Polish Act on CIT, the “date of transfer order” stands for: 

  • the date on which a written transfer disposition is issued to the settlement administrator, 
  • the date of the actual transfer of money by the administrator to the account of power provider.  

In the issued interpretation, the Director of the Polish National Tax Information decided that Polskie Sieci Energetyczne were obligated to verify the contractor on the date of agent’s payment order to the bank. The operator challenged the decision and the Provincial Administrative Court in Warsaw, by way of the decision of 23 February 2021   (case file no. III SA/Wa 1758/20), mainly paid attention in the decision in question to the specific characteristics of the market regulated by the act, which imposes the obligation of participation of a third party in bank account management and ordering bank transfers. Consequently, the Provincial Administrative Court concluded that in that particular factual circumstances, the “date of the transfer order” had to be understood as the date on which the Company issued a written disposition to the settlement Administrator.  

In the end, the case was resolved by way of decision of the Supreme Administrative Court of 23 April 2024  (case file no. II FSK 917/21), in which it was confirmed that in that particular situation “the date of transfer order” was the date on which a written disposition of the transaction in question was issued by PSE to the settlement administrator. The operator that fulfills the duties arising from special solutions imposed by the Act on the capacity market must not be exposed to a sanction resulting from Art. 15d of the Polish Act on CIT.  

However, the decision referred only to the regulated market. Any other entrepreneur that is not obligated under the act to have a payment agent, in order to remain free from exposure to sanctions, will carry out the verification on the date of transfer order to the bank, which has been consistently described in the current interpretations of the Polish National Tax Information (e.g., individual interpretation of the Director of the Polish National Tax Information of 25 February 2020 no. 0111-KDIB1-3.4010.594.2019.1.JKU).  

In case of transfers with a deferred payment date or standing orders, the verification of the contractor should take place on the date of the transfer that was ordered by the taxpayer to the bank. Verification on the white list always constitutes the duty of the taxpayer and the taxpayer will bear the consequences of making a payment to an account that is not registered on the white list.  

The contractor’s status is sometimes uncertain 

The characteristic of the White List is that we verify the contractor’s status as of that particular date. However, there are situations when the status of entities entered into the white list is changed retroactively by tax authorities. It refers both to retroactive registration as well as retroactive removal of taxpayers. That is why the contractor’s status might sometimes be uncertain despite of the verification. Thus, it is important for the taxpayers to download and keep the proofs of verification of the contractor (a unique search identifier).   

If our contractor that has the status of an active VAT payer loses the said status and is removed retroactively from the register, the next time we verify the contractor, their status on the white list might state that they were removed already before the date of the previous verification, when the white list confirmed the contractor’s status as an active VAT payer. If we do not keep proofs of contractors’ verification, it might be later on difficult to prove that the change in the status occurred retroactively.   

Often, the entrepreneur themselves is on aware of the fact that they have been removed from the VAT register because in some cases the economic entity might be removed by the tax office without a prior notification (Resolution of the Supreme Administrative Court of 23 October 2024, case file no. FPS 3/23 on the mode of removing a taxpayer from the White List in relation to the application of the so-called STIR blockade).  

It is also important to keep the proof of verification because of the possibility of using it in a situation when it occurs that our contractor is suspected of participating in a carousel fraud and it will be helpful to prove before tax authorities that we exercised entrepreneur’s due diligence in domestic transactions.   

 

Author: Monika Daniek, Junior Accountant at the MDDP Outsourcing office in Warsaw 

 

Sources:  

https://orzeczenia.nsa.gov.pl/doc/1D6CC3C590 

https://podatki.gazetaprawna.pl/artykuly/9501749,sprawdzanie-kontrahenta-na-bialej-liscie-vat-nie-zawsze-oczywiste.html