Zero VAT declaration and the obligation to submit it
Active VAT payers are required to submit periodic settlement declarations for monthly (VAT-7) or quarterly (VAT-7K) periods by the 25th month following the given settlement period. The obligation does not raise any doubts when the entrepreneur made transactions affecting the tax on goods and services in a given month. Check if a zero VAT declaration also needs to be submitted!
Obligation to submit VAT returns
The necessity to submit VAT settlements to the tax office results directly from the VAT Act, and more precisely from Art. 99, which shows that active VAT payers are required to submit tax declarations for monthly periods to the tax office by the 25th day of the month following each subsequent month. For taxpayers who chose the form of quarterly settlement by the 25th of the following month following the given quarter.
VAT returns may only be submitted in electronic form. It is not possible to submit paper VAT returns to the Tax Office!
This means that the VAT payer who settles monthly for a given tax year will be obliged to submit 12 VAT-7 settlement declarations after each of the months, i.e. per month:
- January to February 25
- February to March 25
- March to April 25, etc.,
- and for December to January 25 of the next fiscal year.
On the other hand, entrepreneurs who have decided to settle quarterly for a given tax year will be required to submit 4 VAT-7K settlement declarations, namely for:
- quarter I (January, February, March) until April 25,
- Q2 (April, May, June) until July 25,
- quarter III (July, August, September) until October 25,
- 4th quarter (October, November, December) until 25 January.
In the act, the obligation to submit VAT settlement declarations was not made dependent on transactions that took place in a given month. Therefore, it applies to all active VAT payers - even those who in a given period did not make any transactions affecting VAT or cases where the amount of tax due was equal to the amount of input tax and the final tax liability was PLN 0. This means that taxpayers are required to submit even "zero" VAT returns.
Who is not required to submit a VAT declaration?
There is a group of entities that are not obliged to submit VAT settlement declarations. It includes taxpayers who benefit from the subjective exemption from VAT pursuant to art. 113 paragraph. 1 of the VAT Act (limit of PLN 200,000). The VAT-7 settlement declaration is also not required to be submitted by entities performing only activities exempt from tax pursuant to art. 43 sec. 1 or on the basis of the regulations issued on the basis of art. 82 sec. 3, unless:
- they are entitled to a tax refund or input tax refund;
- are obliged to correct the tax deducted;
- are obliged to make adjustments related to the relief for bad debts.
The last group of entities exempt from the obligation to submit periodic declarations is made up of entrepreneurs (both active VAT payers and non-VAT taxpayers) who have suspended their business under the provisions of the Entrepreneurs' Law Act.
During periods in which their activities are suspended, they are not required to submit VAT returns. The exceptions are situations that have tax consequences in the output VAT (on sales), e.g. when the company's assets were sold during the suspension, when there is a need for an adjustment related to the relief for bad debts, or when a sales invoice is issued for activities that were performed before the suspension.
Zero VAT declaration - failure to submit within the statutory deadline
On the other hand, other VAT payers are required to submit periodic tax returns within the time limits set by the act. Failure to submit a periodic declaration may result in the imposition of a penalty on the taxpayer specified in the Fiscal Penal Code.
Article 54 of the Fiscal Penal Code Act:
"Art. 54. § 1. A taxpayer who, avoiding taxation, fails to disclose to the competent authority the subject matter or the tax base or does not submit a declaration, thus exposing the tax to depletion, shall be liable to a fine of up to 720 daily rates or imprisonment, or both of these penalties jointly .
§ 2. If the amount of the tax subject to depletion is of low value, the perpetrator of the offense specified in § 1 shall be fined up to 720 daily rates.
§ 3. If the amount of tax subject to depletion does not exceed the statutory threshold, the perpetrator of the offense specified in § 1 shall be fined for a tax offense ".
There are doubts here whether failure to submit a "zero" VAT return on time may also be punishable? In this case, there is no risk of depletion of public law liabilities. Therefore, on June 13, a parliamentary interpellation No. 18890 was submitted to the Minister of Finance on the consideration of the proposal to abolish the obligation to submit a "zero" VAT declaration.
In response to a complex question, the representative of the Ministry of Finance explained that even zero returns are important for the ongoing monitoring of VAT taxpayers. They are the main source of information sent to tax offices about transactions carried out or not conducted by taxpayers related to taxable activities, which information about the tax due for a given period or is not prepared by the taxpayers themselves on the basis of their own calculations. Additionally, the representative of the Minister of Finance drew attention to the importance of VAT itself and the dishonesty of the taxpayers themselves:
"Considering the specificity of the value added tax and the fact that this tax is exposed to various types of abuse (including, among others, the disappearing taxpayer), such monitoring of taxpayers carried out on the basis of submitted VAT declarations is necessary . It allows for faster detection of dishonest taxpayers, which is very important from the point of view of securing revenues from this tax, which are the largest source of state budget revenues ".
Therefore, the ministry is not planning to change the obligation to submit "zero" periodic VAT returns. Therefore, active VAT payers, even if they have not performed activities subject to tax on goods and services in a given month, are required to submit a "zero" VAT return to the tax office.