How to write and when to submit an application for a VAT overpayment?


Sometimes, due to a simple oversight or error in the tax return, an overpayment of VAT may occur. In a situation where the amount of tax deductible has increased or the value of tax due has decreased - the tax liability will also be reduced. Then the taxpayer should submit a correction of the VAT-7 declaration together with an appropriate written explanation of the reasons for the irregularity, as well as an application for overpayment.

Regulations regarding settlements can be found in the Tax Ordinance

The main regulations in the field of overpayment of tax on goods and services are contained in the Tax Ordinance. Pursuant to Art. 72 § 1 section 1 point 1 of the above-mentioned of the Act - the overpayment is the amount of overpaid or unduly paid tax. Additionally, if the settlement of the tax liability related to arrears, the late payment interest is also treated as an overpayment.

When is the tax overpayment deadline?

The deadline for the overpayment of VAT occurs when the taxpayer pays the undue tax or in the amount greater than the amount due. On the other hand, persons submitting settlement declarations on a quarterly basis may find that the tax is overpaid on the date the form is delivered to the tax office.

Application for overpayment

It is worth knowing that the overpayment correction itself does not solve the problem and is not enough to get a refund. This is because an application for overpayment is required, which, according to the regulations, may be submitted by a taxpayer who showed in the corrected declaration an undue tax liability or in an amount greater than that due and paid the fee.

According to the Tax Ordinance, in particular Art. 75 § 4, the office may refund the overpaid amount of tax, without issuing a decision stating the overpayment, provided that the correctly corrected declaration does not raise any objections. Otherwise, submitting the said application will initiate tax proceedings, and the decision will be issued after its completion.

Waiting time for a decision

As you might expect, the tax authority will not refund the overpayment immediately after receiving the application, along with the correction of the return. He has a time in which he can make a decision without haste. However, this date is not set freely at the discretion, but results from the above-mentioned the law. In the event that the overpayment results from the submitted correction of the declaration, then the tax office should return the liability within 3 months from the date of preparation of the correction. The tax office also has the right to independently correct the declaration as part of the verification activities. Then the overpayment must be reimbursed within 3 months from the date of the expiry of the deadline for objecting by the taxpayer to the correction.

On the other hand, if the overpayment is refunded on the basis of a decision issued by the office stating or specifying the amount of the overpayment, its refund should be made within 30 days from the date of issuing the decision.

It is worth knowing that the overpayment is most often created by correcting the declaration

The basic way to create an overpayment of tax on goods and services is to correct the declaration. However, there are also other sources of its creation, in particular:

  • amendment, declaration of invalidity or even revocation of the decision of the tax authority,
  • the judgment of the Constitutional Tribunal, and also
  • judgment of the Court of Justice of the European Union.

The regulations resulting from the VAT Act stipulate that an overpayment is also a tax difference not returned by the tax office within the applicable deadlines, subject to interest within the meaning of the provisions of the Tax Ordinance. Then, the overpayment, together with the interest rate, is first credited against current liabilities and tax arrears with interest for late payment. In a situation where none of the above occur, the overpayment is returned, unless the taxpayer applied for the overpayment to be credited to the account of future tax liabilities.