Poland’s VAT Changes – Hints of What’s to Come?

VAT Compliance Changes 

In recent years, we’ve witnessed an enormous increase in the pace and magnitude of VAT compliance changes. More countries are implementing new VAT reporting obligations that will supplement or even replace traditional VAT returns. Some countries are even experimenting with new methods for VAT remittance.

The "White List" of VAT Payers

Recent compliance developments in Poland illustrate the speed and variety of these changes. In September 2019, the Polish tax authorities made available an electronic database of taxpayers registered for VAT purposes in Poland (called a white list of VAT payers). In addition to general business information, the white list includes businesses’ bank accounts. When paying for certain goods or services, the purchaser is required to check whether the bank account of the supplier is included in the list. If you fail to check the account number and you transfer money to a different bank account, that may result in a joint responsibility for output VAT not settled by the supplier and the loss of any opportunity to recognise the expense as tax-deductible costs.

In November 2019, Poland became the second country in the European Union (after Italy) to introduce mandatory split payments. This alternative VAT collection mechanism applies to certain B2B supplies and services (e.g. electronics, metal, scrap, fuel, construction services) above PLN 15,000 (or about USD 3,800).

VAT Reporting Changes on the Horizon

This year more VAT reporting changes are on the horizon. As of 1 April the VAT return and the SAF-T report will be merged into one file. This means that businesses will officially no longer need to submit VAT returns; instead, they will submit a single report listing all transaction data, which will also include items that are currently covered by the VAT return.