SLIM VAT – what changes is the Ministry of Finance preparing? | JWW Accounting Office

SLIM VAT – what changes is the Ministry of Finance preparing?

Simple invoicing, simplifications for exporters, common currency exchange rates with income tax, financial benefits – these are four areas subject to changes.
SLIM VAT is a collection of simplifications that answers the entrepreneurs’ expectations towards Ministry of Finance.
SLIM VAT is a result of MF’s audit of regulations aiming at adapting them to the operational conditions of small to medium sized companies.

“Lately, we’ve been focusing on the solutions that facilitate business operations during pandemic. We also care about introducing lasting changes that facilitate operations of small businesses. What they need the most, is shortening the time needed to fulfill tax duties. At MF, we performed an audit of taxpayers’ duties in order to eliminate or reduce those that serve as a road bump for the development of Polish entrepreneurship” according to Tadeusz Koscinski, a minister of finance. “The conclusions we drew gave us the basis for initiating the modernization and simplification of regulations for VAT regulations.” The head of MF informed that “the idea of SLIM VAT is the result of our actions“.

The vice-minister of finance, Jan Sarnowski, says that “SLIM VAT” is an acronym that consists of words simple, local and modern. It means an easily manageable tax, adapted to the local specifics of the country it functions in. It’s also a modern tax in which implementing further technological solutions and electronic administration services is combined with the reduction of obligations for taxpayers. A distinctive feature of Polish market is a well-developed sector of small to medium-sized businesses. We want to consequently remove as much formalities as possible in order to decrease the time needed for tax calculations. Bigger companies will also benefit from the changes. For them, SLIM VAT means simpler daily tasks for payroll teams and saving time. These are real and measurable financial benefits for the companies“, added the vice-minister.

SLIM VAT project introduces changes in four areas of VAT.

Simple invoicing:

Correction invoices in-minus

The Ministry’s goal is to resign from the formal requirement of getting a confirmation of receiving a correction invoice by the buyer of goods or ordering party.

The taxpayer shall decrease the tax base and output VAT in the time period of issuing a correction invoice under the condition that the taxpayer possesses a documentation according to which they establishes the terms of transaction with the buyer or ordering party.

The change will considerably simplify the calculations by lack of necessity of gathering confirmations of receiving a correction invoice and waiting for their delivery as well as by

lack of necessity to make corrections for declarations.

Correction invoices in-plus

VAT Act will gain regulations that specify the ways of settling correction invoices in-plus (that increase the tax base).

So far, the taxpayers relied on the interpretation line and jurisdiction. It didn’t provide with the right certainty of law.

Now, the taxpayers will be certain about the right way of settling – the settlement will be done on a regular basis in the time period of issuing a correction invoice (in relation to the reasons that became apparent after making the sale).

Simplifications for exporters:

For applying the 0% rate from the advance payment in goods export, we’re extending the deadline of exporting goods from 2 to 6 months.
Extending the time to export the goods to six months since receiving the advance payment will considerably improve the exporters’ situation which will affect solving a problem even for the long term deliveries.

Consistent currency exchange rates:

Unifying the way of setting currency exchange rates for the purposes of VAT settlements with the rules of setting the currency exchange rates for the purposes of CIT.
For VAT, the taxpayer will be able to choose the rules of calculating the currency exchange rate like for the calculating the income in income tax. It means shortening the time to settle the currency exchange rate for one transaction.

Financial benefits:

Extending the deadline for deducting VAT on an ongoing basis to 4 months

The taxpayer will be able to include the invoice during four months in total without the need of correcting the declaration.

It will eliminate frequent and unnecessary VAT corrections, both for the business and for the tax administration.

VAT deduction from the invoices for purchasing accommodation services to resell them

The solution will allow to deduct VAT from the invoice for accommodation services purchased to the benefit of your business client.

This change is an answer to the needs of the market. It means the end of the deduction prohibition for the taxpayers who buy such services in order to resell them.

Increase of the limit for low value gifts

We’re increasing the quotes for one-time gifts of small value from PLN 10 to PLN 20.

We’re getting the Polish one-time gifts limitation (without unnecessary formalities) closer to the average EU value directly assigned to gifts.