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Poland: Proposed amendments intended to simplify VAT law

Poland: Proposed amendments to simplify VAT law

Legislative proposals are included in a bill that would introduce changes the Polish value added tax (VAT) law that would simplify VAT settlements and amend the “tax-free” travel tax refund system.

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As proposed, the “simple local and modern” VAT package would no longer require a formal confirmation that the purchaser received a “correcting invoice” (credit note).

  • It would be possible to reduce the tax base and the amount of VAT due at the time of issuance of a correcting invoice, provided that the taxpayer has documentation confirming the correcting-related arrangements made with the purchaser. If such documentation is unavailable when a correcting invoice is issued, it would be possible to make a correction in the settlement for the tax period in which the documentation was obtained.
  • At the same time, the purchaser would make adjustments (reduction of input tax) for the period in which the conditions for reducing the tax base specified in the correcting invoice have been agreed upon (currently, the purchaser may reduce the input VAT only upon receipt of the correcting invoice).

The bill would also:

  • Regulate the method of VAT settlement of debit notes and allow settlements for the period in which the reason for the increase in the price (tax base) occurred
  • Introduce measures concerning the use of currency conversion rates for VAT purposes and allow the use of a single exchange rate for VAT and individual (personal) income tax and corporate income tax settlements for 12 consecutive months, starting from the beginning of month in which the method was selected
  • Introduce an all-electronic “tax-free billing” system for recording documents along with the paid amounts of the VAT refunds
  • Introduce clarifications and adjustments to existing VAT provisions concerning a “binding VAT rate statement”

The bill is subject to parliamentary consideration and, if enacted, would have an effective date of 1 January 2021 (except the tax-free provisions would be effective 1 January 2022).
 

Read an August 2020 report [PDF 237 KB] prepared by the KPMG member firm in Poland

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