When does the VAT obligation arise in 2014?


Changes in VAT since the beginning of 2014they bombard entrepreneurs from all sides - not only in terms of detailed rules, but also the most basic ones. There have been diametric changes, among others the moment when the tax obligation arises, both in terms of general and specific principles. It is worth reading the small compendium on this topic to be sure that all settlements are carried out in accordance with the currently applicable regulations.

General rules for the emergence of a tax obligation

As of the beginning of 2014, the amended VAT Act no longer contains article 19, which so far had governed the principles of creating a tax obligation. It was repealed and the necessary provisions were included in the newly added Art. 19a.

In accordance with paragraph 1 of this article, the tax obligation arises when the goods are delivered or the service is provided. Therefore, the invoice loses its significance, the issue of which will no longer affect when the due tax should be charged and in what period it must be paid to the office. Therefore, with the new moment when the tax obligation arises, the legislator gives entrepreneurs a bit more freedom in terms of invoicing - they now have time to issue this document up to the 15th day of the month after the month in which the goods were delivered or the service was performed.

Of course, in a situation where, before the events indicated above, the entrepreneur receives part or all of the payment from his contractor (in the form of an advance, down payment, prepayment, etc.), the tax obligation will arise in the period of receipt of funds. However, also in this case, the obligation to issue an invoice is extended to the 15th day of the following month.

It is also worth paying attention to the mouth. 2 of the indicated article, which concerns services performed in parts. From the beginning of 2014, each such part - as long as it is provided for payment - will entail the necessity to pay VAT.

Continuous services were also included in the Act - in Art. 19a paragraph. 3. Pursuant to this provision, if further payment or settlement dates have been established for services, then with each of these dates the moment of service provision arises - and consequently, a tax obligation arises. With respect to a situation in which the service is provided continuously for a period longer than one year, for which the payment or settlement deadline in a given year does not expire, it is considered to be performed at the end of each tax year until the end of this service.

Thus, the general rule of the emergence of a tax obligation does not seem to be particularly complicated, although in practice some entrepreneurs will have a bit more trouble with it - e.g. in the case of mail order sales.

Special rules for the emergence of a tax obligation

In addition to the general principles, the amended VAT Act also introduces changes in the matter of special principles. Although they concern a smaller group of taxpayers, it is worth taking a close look at them.

The first group of special rules are those in which the tax obligation arises upon receipt of all or part of the payment (except for the aforementioned advance payments). The list of economic events for which this rule is appropriate is listed in Art. 19a paragraph. 5 pts 1 and concerns:

  • release of goods by the commissioner to the commission agent under a commission agreement,
  • transfer of ownership of goods by order of a public authority or entity acting on behalf of such authority in return for compensation,
  • the delivery of goods carried out in the course of execution, referred to in art. 18,
  • providing, on the basis of separate provisions, at the request of common, administrative and military courts or the public prosecutor's office, services related to court or preparatory proceedings, with the exception of services to which art. 28b, constituting the import of services,
  • the provision of tax-exempt services in accordance with Art. 43 sec. 1 points 37-41.

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The following special rules, included in point 3 of the provision, apply to such business transactions for which the tax obligation arises upon receipt of a part or all of the payment, but not later than at the time of issuing an invoice documenting such an event. This rule applies to:

  • providing construction or construction and assembly services,
  • deliveries of printed books (PKWiU ex 58.11.1) - excluding maps and leaflets - and newspapers, magazines and magazines, printed (PKWiU ex 58.13.1 and PKWiU ex 58.14.1),
  • activities consisting in printing books (PKWiU ex 58.11.1) - excluding maps and leaflets - and newspapers, magazines and magazines (PKWiU ex 58.13.1 and PKWiU ex 58.14.1), with the exception of services to which Art. 28B, which are the import of services.

The third and last group of special rules provides for the emergence of a tax obligation at the time of issuing the invoice, but not later than on the expiry of the payment deadline. Section 4 lists these activities - namely:

a) supply of electricity, heat or cooling as well as line gas,
b) provision of services:

  • telecommunications and radiocommunication,
  • listed in item 140-153, 174 and 175 of Annex 3 to the Act,
  • rental, lease, leasing or services of a similar nature,
  • protection of persons and services of security, supervision and storage of property,
  • permanent legal and office services,
  • distribution of electricity, heat or cooling as well as line gas,

- with the exception of services which, in accordance with Art. 28b are considered as import of services.

When to deduct input VAT?

The rules concerning the moment when a tax obligation arises should be known not only to entrepreneurs who deal with the provision of particular services or the delivery of goods. Their recipients should also be familiar with the terms presented. Why?

Pursuant to Art. 86 sec. 10 of the VAT Act, the taxpayer usually obtains the right to deduct input tax only in the period in which the tax obligation arose on the part of the seller, or in one of the following two. An additional condition that must be met according to paragraph 10b points 1 is the receipt of an invoice documenting a given transaction.

Thus, a trader wishing to deduct input tax on his purchases must ensure that:

  • has a purchase invoice and
  • a tax obligation arose on the seller's side in relation to a given transaction.