Time limits for tax deduction

General rules for deducting input tax

Pursuant to the provisions of the VAT Act, the right to reduce the amount of tax due arises:

• as a rule, in the settlement for the period in which the taxpayer received an invoice or a customs document,
• in the case of the import of services or the intra-Community acquisition of goods or the supply of goods for which the buyer is the taxpayer, the right to deduct arises in the settlement for the period in which the tax obligation arose in the tax due to the buyer;
• in the case of import of goods covered by the simplified customs procedure - in the settlement for the period in which the tax obligation arose in the tax due on the import of goods, accounted for in accordance with art. 33a;
• in the case of a taxpayer's use of a single permit enabling the settlement of VAT on the import of goods using an import declaration - in the settlement for the period in which the tax obligation arose in the tax due on the import of goods, accounted for in accordance with art. 33b;
• in the case of purchasing the media referred to in Art. 19 paragraph 13 point 1 (including electricity and heat, line gas, telecommunications and radiocommunication services, water supply, sewage management services, waste disposal and disposal services, sanitary and related services), if the invoice contains information about the period for which it relates - in the settlement for the period in which the payment is due;
• in the case of a physical inventory determined at the time of resignation or loss of the right to VAT exemption by a small entrepreneur - not later than in the settlement for the period in which the inventory was made;
• in the case of using the simplified procedure in the import of goods, consisting in entry in the register in accordance with customs regulations - for the accounting period in which the taxpayer made the entry in the register; reduction of the amount of tax due is provided that the taxpayer makes the payment of the tax shown in this register, subject to article 22. 33a;
• in the case of customs decisions - in the settlement for the period in which the taxpayer received the decision; the amount of tax due is reduced provided that the taxpayer has paid the tax resulting from the decision.

However, it should be remembered that the taxpayer has three accounting periods (months or quarters) to deduct the input tax from the invoice or customs document received, because if the taxpayer fails to reduce the amount of tax due within the time limits specified in paragraph 10, may reduce the amount of tax due in the tax return for one of the next two tax periods (Article 86 (11) of the VAT Act).

Acquisition of the right to dispose of the goods as an owner

In order to be able to exercise the right to deduct VAT, one must observe the principle that the right to deduct the tax, in the case of receiving an invoice before acquiring the right to dispose of the goods as an owner, or before the service is provided, arises only at the time of acquiring the right to dispose of the goods or at the time of performance. services. However, this condition does not have to be met in the case of services for which the legislator has specifically defined the moment when the tax obligation arises, i.e. in the cases specified in Art. 19 paragraph 13 points 1, 2, 4, 7, 9-11 of the VAT Act).

VAT deduction in the absence of taxable activities

An important issue for VAT payers is the settlement of input tax on purchases made, in a situation where in a given settlement period the taxpayer did not perform activities subject to VAT. According to the wording of Art. 86 sec. 19 of the VAT Act, a taxpayer who did not perform taxable activities in the territory of the country in a given tax period and did not perform activities outside the territory of the country, the amount of input tax may be transferred for settlement to the next tax period. The use of the word "may" by the legislator means that the taxpayer himself decides whether the input tax will be settled in the submitted declaration (despite the lack of taxable activities) by applying for a refund of this tax to the bank account, or withholding this settlement until the output tax occurs on the activities performed, showing the input VAT as the amount to be carried over to the next period.

Deduction of input tax from utility invoices

In some cases, the specific moment when a tax obligation arises is also related to special rules for deducting the tax charged by the buyer of goods and services. This is the case of the so-called universal services, which include, among others: supply of electricity and heat as well as line gas, telecommunications and radiocommunication services, services in the field of water distribution and sewage management, as well as waste disposal and disposal, sanitation and related services.

For these services - pursuant to art. 19 paragraph 13 point 1 of the VAT Act - the tax obligation arises upon the expiry of the payment deadline, if it has been specified in the contract. The right to deduct the input tax from the invoice documenting the purchase of any of the above-mentioned services, pursuant to art. 86 sec. 10 point 3 of the VAT Act, arises in the settlement for the period in which the payment deadline falls. However, because in the next paragraph 11 of this provision provides for the possibility of deducting input tax also in one of the next two tax periods, as a result, in the case of universal services, the taxpayer has three months to exercise the right to deduct input tax.

Tax charged on import

The taxpayer has the right to deduct the tax on the import of services for the period in which the tax obligation in the output tax arises. When importing services, the taxpayer issues an internal invoice, in which he shows the amount of tax and the tax resulting from this invoice is settled in the declaration as due tax. At the same time, however, the amount of this tax is entered in the declaration as deductible input tax.The general principle of VAT deduction, however, allows taxpayers to use the right to deduct input tax on the import of services also in the settlement for one of the next two accounting periods.

Date of tax deduction specified in the physical inventory

Taxpayers who are subjectively exempt from VAT prepare a physical inventory if, after exceeding the amount of the turnover entitling to the exemption, they lose this right or if they voluntarily resign from the VAT exemption they are entitled to. They are entitled to deduct input tax specified in this list, provided that additional conditions are met. Deduction of input tax on purchases made before the loss or resignation from the right to exemption is possible only with the consent of the head of the tax office. Input tax can be deducted no later than in the settlement for the period in which the inventory was made. However, it should be remembered that also in this case the provision of Art. 86 sec. 11 of the VAT Act, which means that the taxpayer also has the right to deduct VAT in one of the next two accounting periods.

Tax deduction by small cash-based taxpayers

The basic condition for acquiring the right to deduct input tax by a small taxpayer settling VAT using the cash method is the payment of the entire amount due resulting from the invoice received from the contractor or payment of the tax resulting from the customs document, taking into account the amounts resulting from customs decisions. However, the deduction may not take place earlier than the date of receipt of the invoice or customs document.

The deduction of the tax charged by the taxpayer using the cash method may take place either in the settlement for the period in which he will settle the amount due resulting from the invoice from which he wants to deduct the tax, or in the settlement for one of the next two periods.

VAT deduction in case of receipt of a VAT invoice correction

Pursuant to Art. 86 sec. 10a, if the buyer of the goods or services has received an invoice correction that reduces the tax base or the VAT itself, it is obliged to reduce the amount of input tax in the settlement for the period in which the invoice correction was received.