Poland implements changes for Postponed Accounting for Import VAT and for the EU’s four ‘Quick Fixes‘.
Postponed Accounting for Import VAT
Poland introduced changes to the way it operates postponed accounting for import VAT. This came into force as of 1 July 2020. The simplified procedure allows for importers to account for the import VAT on their VAT return under a reverse charge. This is as opposed to paying VAT at the time of entry into the EU, giving the business a cash flow advantage.
Previously, this procedure was only available for entities who met specific conditions – or if they have Authorised Economic Operator (AEO) status. According to reports, there were relatively few participants as only large Polish and foreign companies met the conditions for its use.
In order to make Polish ports more attractive to importers, especially in light of the UK’s upcoming exit from the Customs Union & Single Market, the tax authorities implemented new regulations. This makes it easier for other businesses to take advantage of this simplified procedure. These changes consist of the following:
- Introducing as a general rule the possibility of using the postponed Import VAT accounting simplified procedure for ALL VAT registered businesses;
- The simplified procedure will cover ALL imports of goods. Including those covered by customs simplifications and customs declarations under general rules;
- Introducing simplifications regarding the submission of the official certificates or declarations to the one tax office. Not several offices which is currently the situation;
- Resignation from the obligation to inform tax authorities about commencing or resigning from the simplified procedure before the beginning of the VAT settlement period from which the taxpayer wants to apply or resign from it; and
- Taxpayers applying the simplified procedure cannot submit quarterly VAT returns. This will be for at least 12 months after the last month of the quarter in which the taxpayer reported an import under the simplified procedure.
EU’s Quick Fixes
The Polish Government have also implemented into Polish VAT law simplifications to the cross-border supply of goods within the EU, also known as the “Quick Fixes.” The measures had an effective date of 1 July 2020.
The ‘Quick Fixes’ aim to provide clarity and guidance on the correct VAT treatment on EU supplies of goods. They include the following:
- Harmonisation on the VAT treatment of chain transactions in the EU
- Tightening of the requirements for zero-rated intra-EU supplies of goods
- Simplification for cross-border consignment stock cases in the EU
- Standardisation of documentary proof in the case of zero-rated intra-EU supplies of goods
This new bill finally implements the European Commission’s 2018 Directive. This is in regards to the harmonisation and simplification of certain rules in the VAT system for the taxation of trade between Member States. However, this should have been in force from 1 January 2020.
If you are affected by any of the changes above or would like some further information, then please contact one of our VAT experts.