Amendments to the Tax Code and the VAT Act

The Ministry of Finance is once again preparing a number of tax changes for us. This time, the tax ordinance and the VAT Act will be modified.

Act on VAT

Additional attachment

One of the most important changes to the Act will be the addition of Annex 13, which will apply to certain steel products and fuels, as well as raw gold.

Restrictions on quarterly VAT settlements

Art. 99 sec. 3a and sec. 3b, which will limit the possibility of quarterly settlement of VAT returns. These restrictions will apply to taxpayers who deliver the goods indicated in Annex 13, and the total value of sales without the tax amount did not exceed PLN 100,000 in any month of these periods.

If the above-mentioned amount is exceeded, taxpayers will be required to submit monthly VAT declarations starting from the first month of the quarter:

• in which this amount was exceeded - if the exceedance took place in the first or second month of the quarter; if the exceedance occurs in the second month of the quarter, the declaration for the first month is submitted by the 25th day of the month following the second month of the quarter;
• following the quarter in, this amount was exceeded - if the exceedance occurred in the third month of the quarter.

Newly added chapter XIa

The amendment provides for the addition of a new chapter to the VAT Act, which will regulate issues related to joint and several liability of entities selling goods included in Annex 13.

Pursuant to Art. 105a paragraph. 1 the taxpayer to whom the goods listed in Annex 13 were delivered are jointly and severally liable with the entity making the delivery for tax arrears in proportion to the supply of goods made to him.

These regulations will apply in certain situations:

• when the net value of the purchased goods listed in Annex 13 from one entity in a given month is PLN 100,000.
• when the taxpayer, at the time of delivery of the goods specified in Annex 13, knew or had reason to believe that the entire amount of tax or part of the tax relating to the delivery of these goods for him would not be paid to the account of the tax office.

The new regulations also specify when there is a situation in which it has the right to assume that the bank account of the tax office will not receive all or part of the tax, namely when the circumstances accompanying this supply of goods or the conditions on which it was made differed from the circumstances or conditions usually occurring in trade. these goods, in particular when the price for the delivered goods was lower than their market value.

Joint and several liability does not apply to:

• taxpayers who purchased the goods specified in item 8 of Annex 13 to the Act only at petrol stations or LPG stations, for standard tanks used by them, for propulsion of these vehicles, or
• if the emergence of tax arrears was not related to the participation of the entity supplying the goods (from Annex 13), in unreliable tax settlement in order to obtain financial benefits, or
• if the taxpayer demonstrates that the special circumstances accompanying the delivery of the goods referred to in Annex 13 to the Act, or the specific conditions on which it was made, were justified by normal commercial practice, in particular the discount granted, or
• when two conditions are jointly met: 1.the entity supplying the goods included in Annex 13, was included on the date of delivery of the goods in the electronic list of entities with a guarantee deposit, and 2.the amount of the guarantee deposit corresponds to at least ⅕ of the amount of tax due for the supply of goods made in a given month for a given taxpayer or is at least PLN 2,000,000.

Importantly, the entity supplying the goods referred to in Annex 13 to the Act may submit a guarantee deposit to the tax office as security for the payment of tax in connection with the delivery of these goods.

The value of the deposit may not be lower than PLN 100,000 and should correspond to ⅕ the amount of tax due on the value of sales of goods expected by the entity in a given month, specified in Annex 13.

The guarantee deposit may take various forms, e.g. a cash deposit paid to an auxiliary account of the tax office or a bank / insurance guarantee submitted to the office.

Act - Tax Ordinance

Amendments to the Tax Ordinance also apply to issues related to liability for tax liabilities. Accordingly, Art. 117B on the basis of which the taxpayer referred to in art. 105a of the VAT Act, is jointly and severally liable with all its assets for the tax arrears of the entity delivering the goods, to the extent and on the terms specified in the provisions on tax on goods and services, with the inclusions referred to in § 2 of the article.

The buyer will be responsible only for the supplier's tax arrears. The scope of this liability will not include interest for late payment on these arrears and enforcement costs related to their enforcement. It will also not be possible to rule on the buyer's tax liability if three years have elapsed from the date of delivery of the goods, counting from the end of the year in which the delivery took place.

If enforcement of the supplier's property proves to be ineffective in whole or in part, enforcement of the liability arising from the buyer's tax liability decision on its property will be initiated (Article 33b (3) of the draft law).