VAT sanctions - additional criminal liability to the taxpayer in 2017

Taxpayers until the end of December 2016. could expect the tax authority to impose an additional levy in the event of failure to correct the tax deducted from the unpaid invoice. With the new 2017, provisions on the abolition of a penalty for the taxpayer for failure to the above-mentioned correction were introduced, but at the same time new VAT sanctions were introduced.

No more additional levy imposed in the absence of a VAT correction

Even before January 1, 2017. entrepreneurs who deducted the VAT from the purchase invoice and, at the same time, did not pay the invoice after 150 days from the expiry of the payment deadline specified in the invoice, were required to make an appropriate correction of this VAT.

For example, if the payment date on the invoice was September 20, 2016. is a correction consisting in a reduction of VAT resulting from an unpaid invoice, should be made after 150 days from the expiry of the payment deadline specified in the invoice, in the form of a reduction of the input VAT in the declaration for the period 02/2017.

If the tax authority found that the taxpayer did not make any adjustments pursuant to art. 89b paragraph. 6 of the VAT Act, then it imposed an additional tax liability in the form of 30% of the VAT amount due to unpaid invoices or invoices.

From January 1, 2017. A 30% additional levy imposed by the tax authority for failure to make the above-mentioned adjustment by the taxpayer has been abolished.

New VAT sanctions in 2017

Despite the liquidation of the above levy for failure to correct VAT pursuant to Art. 86b paragraph. 6, new, additional tax liabilities were created in accordance with Art. 112b and 112c of the VAT Act.

Additional tax liability 30%

The head of the tax office or the fiscal control authority will determine the correct amount of the VAT liability along with an additional liability of 30% from:

1. the amount of the understatement of VAT to be paid,

2. the amount of overstatement of the VAT refund,

3. the amount of overestimation of the excess of input tax over due tax, i.e. to be transferred,

4. the difference of the tax to be reduced in relation to the tax due for the next accounting periods.

- if it finds that the taxpayer has shown in the submitted tax declaration:

1. the amount of tax liability lower than the amount due,

Such a situation may occur when the taxpayer has incorrectly deducted 100% of VAT on the operating expenses of the vehicle, from which only 50% should be deducted. For example, if as a result of this operation the VAT payable was PLN 8,500 and should be PLN 9,000, the additional tax liability will be PLN 150 (30% of the difference).

2. the amount of the tax difference refund or the amount of the input tax refund higher than the amount due,

This case may occur when the taxpayer has applied for a larger amount to be returned to the bank account. For example, he showed PLN 5,000 to be returned and he should show PLN 3,500. The additional obligation in this situation will be PLN 1,500.

3. the amount of the tax difference to be used to reduce the amount of tax due for subsequent accounting periods higher than the amount due,

This type of problem may arise when the taxpayer in the VAT declaration shows the amount to be transferred to the next settlement period in an excessively high amount, e.g. PLN 4,000 instead of PLN 3,000, then the additional liability will be PLN 300.

4. the amount of the tax difference refund, the amount of input tax refund or the amount of the tax difference to be reduced the amount of tax due for the next accounting periods, instead of showing the amount of tax liability to be paid to the tax office.

If the taxpayer shows the tax to be refunded in the VAT return, e.g. in the amount of PLN 6,000, and the tax authority has calculated, as a result of which there is a VAT obligation to pay, e.g. in the amount of PLN 2,000, then the additional liability will be as much as PLN 2,400, because it will be calculated on the amount PLN 8,000.

In addition, an additional 30% levy will also be imposed in a situation where the taxpayer has not submitted a tax declaration and has not paid the amount of the tax liability.

VAT sanctions - an additional 20% levy upon completion of the tax audit

In the event of completion of a tax inspection or during the audit proceedings in the situations listed above in points a to d, the taxpayer has submitted a correction of the declaration taking into account the irregularities found and has paid the amount of the tax liability or returned the undue amount of the refund, the amount of the additional tax liability is 20% from:

1. the amount of the understatement of VAT to be paid,

2. the amount of overstatement of the VAT refund,

3. the amount of overestimation of the excess of input tax over due tax, i.e. to be transferred,

4. the difference of the tax to be reduced in relation to the tax due for the next accounting periods.

An additional 20% tax liability will also be applied by the tax authority as well
if the taxpayer fails to submit a tax declaration and does not pay the amount of the tax liability

When an additional 30% tax obligation is not imposed

The amendment to the VAT Act in Art. 112b paragraph. 3 provides that an additional 30% tax liability will not be imposed in the event of:

1. if the taxpayer before the date of initiation of a tax inspection by the head of the tax office or inspection proceedings by the tax inspection authority:

a) submitted an appropriate correction of the tax return, or

b) submitted a tax declaration with the indicated tax amounts

- and paid to the account of the tax office the amount resulting from the submitted declaration or correction of the tax declaration, together with interest for late payment,

2. in a situation where the understatement of the amount of the tax liability or the overstatement of the amount of the tax difference refund, input tax refund or the tax difference to reduce the output tax for the next accounting periods, is related to:

a) obvious mistakes or accounting errors made by the taxpayer,

b) failure to recognize the tax due or input tax in the settlement for a given tax period, while the tax due or input tax was recognized in previous accounting periods or in periods subsequent to the relevant accounting period, if it took place before the date of initiation of a tax inspection by the head of the tax office or audit proceedings by the fiscal control authority,

3. in relation to natural persons who are liable for the same act for a fiscal offense or for a fiscal offense

Additional VAT sanctions - liability of 100%

The legislator also introduced the principle of imposing an additional tax liability of 100% in the part concerning input tax resulting from invoices which:

1. were issued by a non-existent entity,

2. state activities that have not been performed - in the part concerning these activities,

3. provide amounts that are not in accordance with reality - in the part concerning those items for which amounts are not consistent with reality,

4. confirm the activities to which the provisions of art. 58 and art. 83 of the Civil Code - in the part concerning these activities.