Polish VAT 2014 Law brings in widespread changes

2014 sees a major overhaul of the Polish VAT compliance regime following the approval of the 2014 Polish VAT Act.  The changes are aimed at bringing the Polish Value Added Tax regime more into line with the EU VAT Directive.  Areas of reform include the tax point, invoices and input VAT.

Below is a summary of the main changes which came into effect on 1 January 2014.

The condition on VAT being due only when a Polish VAT invoice has been issued has now been eliminated.  This closes the common practice of delaying the recognition of the VAT chargeable event by delaying the issuance of a VAT.  Instead, the general rule of VAT becoming due upon the completion of the delivery of the goods or service will now prevail in all situations.

The Act has left a number of specialist exceptions, including the supply of public services (power, water etc), exempt financial services and some construction.

For the purposed of calculating the amount subject to VAT, all costs associated with the provision of the goods or services must now be included in the base price.  This has brought packaging, insurance and transportation costs into the taxable base for Polish VAT.  Price discounts should also be taken into account when calculating the VAT due.

Polish VAT invoices must be issued at the latest by the 15^th of the month following the completion of the supply of goods or services.  This replaces the old rule of invoicing within seven days of providing the supply.

The sale of second hand goods is no longer VAT exempt.

The right to deduct input VAT paid on intra-community supplies will now depend on receiving a support invoice within three months of the taxable supply being performed.  If no invoice is received, then the transaction must be reversed.

In addition, the input VAT may only be deducted in the same period as the corresponding output VAT is declared in the VAT return.

Click for free Polish VAT info