Rounding amounts in declarations
The Act of August 29, 1997 - Tax Ordinance, unifies the rules for rounding amounts due. However, taxpayers often have problems with the correct rounding of amounts in their declarations when settling, for example, VAT. How to correctly round the amounts resulting from invoices and include them in the declaration?
Rounding amounts in declarations - rules
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Art. 63. The rules for rounding the amounts of receivables provided for in the provisions of the tax law Tax bases, amounts of taxes, interest for late payment, extension fees, interest on overpayments and remuneration due to payers and collectors are rounded to full zlotys in such a way that the endings of amounts less than 50 groszy are omitted, and the endings of amounts of 50 groszes and more are increased to full zlotys.
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Invoices issued and received by the taxpayer constitute the basis for entry in the registers (sales and purchases) kept for VAT purposes. Pursuant to the VAT Act, the amounts shown on invoices are rounded to full groszes. Consequently, all values that are in the records regarding VAT settlement are also shown with an accuracy of PLN 0.01.
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Important! As a rule, the amounts shown on the invoices are not rounded up to the nearest PLN |
The method of rounding the amounts in individual items of the declaration has also been explained so that taxpayers have no doubts as to the correctness of the declarations they complete. This explanation can be found in Annex 4 to the Ordinance of the Minister of Finance of March 18, 2013 on the specimen declarations for tax on goods and services.
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Important! The amounts in the declarations are rounded up to full zlotys only after adding up the amounts on the invoices and VAT records.
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Rounding the amount due - differences in declarations
There is a possibility that a difference will arise when rounded up to the nearest PLN in the VAT register and multiplied by the tax rate. This amount will then differ from the tax amount shown in the records by PLN 1. Rounding differences may also arise between VAT-7 (VAT-7K) and VAT-EU declarations, in the transaction amounts reported with individual EU contractors and in the transaction amount broken down by individual contractors.
According to the Tax Ordinance, their tax base and VAT amount are rounded. Therefore, so that you do not have to explain it later with the tax office, you can include additional information in the declaration that the amounts in it are consistent with the kept records. Thanks to this information, the tax authority will accept the given amounts without asking for additional explanations about the difference.
Example 1.
A Polish entrepreneur makes intra-Community acquisitions of goods from contractors from Germany and Italy. In the records for July this year concluded the following transactions with suppliers:
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No. |
German contractor |
Italian contractor | ||
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The net value
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VAT tax |
The net value |
VAT tax | |
|
1 |
17,25 |
3,97 |
21,06 |
4,84 |
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2 |
14,37 |
3,31 |
13,87 |
3,19 |
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3 |
18,66 |
4,29 |
10,33 |
2,38 |
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4 |
16,98 |
3,91 |
15,54 |
3,57 |
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5 |
12,22 |
2,81 |
14,11 |
3,25 |
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6 |
11,05 |
2,54 |
19,02 |
4,37 |
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7 |
10,01 |
2,30 |
21,93 |
5,04 |
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∑ |
100,54 |
23,13 |
115,86 |
26,64 |
The total net WNT amount in July was PLN 216.40 and the tax due (23%) PLN 49.77.
In the VAT-7 declaration for July 2014, the taxpayer will show, after rounding, the net value of intra-Community value of PLN 216 and the tax due in the amount of PLN 50.
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