Poland should be implementing a high number of changes as from 01/01/2017 [Act still needs to be published but has been approved by government] impacting directing non-resident companies having a Polish VAT number.
A deduction of input VAT will be possible provided there is also output VAT reported on the VAT return for the filing period in which the VAT issue arises.
When output VAT is not reported within three months of the VAT issue, it will no longer be possible to retrospectively report the input VAT.
Elimination of the option to file quarterly VAT returns
This will affect all large taxpayers as well as entities that have just started to conduct business and are still within their first year of activity.
Update of the penalties system
The penalty system will be updated with new penalties of up to 30% of the VAT due. This penalty will apply whenever a business requests an excessive VAT refund or makes a smaller payment than the applicable amount for the relevant period. The penalties can go up to 100% where there is no underlying supply on an invoice issued. These penalties will apply if the tax office uncovers these inconsistencies during an audit.
The scope of the reverse charge mechanism is being extended to construction services that are provided by foreign subcontractors and Polish taxable businesses.
The current rules set a time limit of 60 days for the Polish authorities to pay back a VAT refund. This limit will be reduced to 25 days when a number of conditions are met, such as providing bank payment proofs for invoices, invoices paid in cash amounting to less than PLN 15,000 in total. Where the conditions are not met, the 60 days limit will remain applicable although a bank guarantee may be necessary when the tax shall be repaid within those 60 days and the audit of the repayment has not ended until then.
All those changes are the perfect opportunity to review and possibly optimize your company’s VAT processes in Poland. Please contact directly Bernard Ickowicz [firstname.lastname@example.org or +32 2 351.26.00] in order to discuss it.