Checking the validity of VAT refund by the tax authority

If the input VAT is higher than the VAT due, the entrepreneur has the right to return it or transfer the surplus to the next settlement period. Tax authorities have the right to check whether the tax refund is justified. Check how the verification of the validity of a VAT refund by the tax authority should proceed. Answer in the article!

Checking the validity of a VAT refund and the extension of the refund deadline

Pursuant to the provision of Art. 87 sec. 2 of the VAT Act, the head of the tax office may extend the deadline for VAT refund. This is the case when the validity of the VAT refund is checked, because the taxpayer provided incorrect data, for example, or when the amount of the input tax indicated by the taxpayer is much higher than in previous accounting periods. The verification is performed as part of checking activities, tax control, tax proceedings pursuant to the provisions of the Tax Ordinance Act or control proceedings pursuant to the provisions on fiscal control.

The tax authority may, in the course of carrying out activities checking the validity of the VAT refund, request the taxpayer within the prescribed period to provide the necessary explanations or supplement the declaration, indicating the reasons for questioning the accuracy of the data contained therein.

The tax authority may request the taxpayer to submit invoices confirming the purchase of goods or services that he has taken into account in the records. The tax office orders the extension of the deadline because checking the validity of the VAT refund is time-consuming. On the other hand, the 60-day deadline for return cannot be extended, when almost until the end of this deadline the tax office has not taken any action, and on the last day of expiry of the deadline it extends the deadline for return, referring to the need to verify the accuracy of the submitted declaration.

The exact date of completion of the checking activities is never known, but the tax authority is obliged to provide the taxpayer with at least an indicative date.

Decision to extend the deadline for VAT refund

The extension of the deadline is issued in the form of a decision and should contain:

• designation of the tax authority,

• the date of the decision,

• designation of the party or other persons participating in the proceedings,

• reference to the legal basis,

• decision, instruction on whether and in what manner is a complaint or complaint to the administrative court,

• signature of an authorized person stating the full name and position.

VAT refund deadlines

The taxpayer, after prior submission of an appropriate application, tax declaration and possible security for property, has the right to the basic deadline for returning the excess tax charged over the due tax - 60 days. The tax office has the right to extend the deadline for VAT refund.

Pursuant to the amendment to the VAT Act, which has been in force since 2017, the procedure for obtaining a VAT refund within the shortened period of 25 days has been hindered. Currently, as is clear from Art. 87 sec. 6 of the VAT Act, in order to shorten the VAT refund period to 25 days, the following conditions must be met:

• the amounts of input tax shown in the tax declaration, excluding the amount of the transfer of the VAT surplus on purchases from the previous period, result from:

• invoices documenting the amounts of receivables that have been fully paid via the taxpayer's bank account at a bank established in the country or the taxpayer's account at a cooperative savings and credit union of which he is a member, indicated in the identification application referred to in separate regulations,

• invoices, other than those paid by bank transfer, documenting receivables, if the total amount of these receivables does not exceed PLN 15,000,

• customs documents, import declaration and decisions referred to in art. 33 paragraph 2 and 3 and article. 34 and have been paid by the taxpayer,

• import of goods accounted for in accordance with art. 33a, intra-Community acquisition of goods, the provision of services for which the taxpayer is their recipient, or the supply of goods for which the customer is the taxpayer, if the tax return shows the amount of tax due on these transactions,

• the amount of input tax or the excess of input tax over due tax, not settled in previous accounting periods and shown in the declaration, does not exceed PLN 3,000,

• the taxpayer submits documents confirming the payment of tax to the tax office via the taxpayer's bank account or the taxpayer's account at a cooperative savings and credit union,

• the taxpayer for the next 12 months directly preceding the period for which the taxpayer applies for a refund within 25 days:

• was registered as an active VAT taxpayer,

• submitted declarations for each accounting period.

When the procedures checking the validity of the VAT refund show that the refund declared by the taxpayer was justified, the tax authority must pay him the excess amount due. Even if the tax authority accepts a given declaration, it may be verified again at a later time.