Poland Approves Draft Law to Simplify VAT for Taxpayers

The Polish government has adopted a draft law intended to streamline VAT procedures and reduce administrative burdens for businesses. The Ministry of Finance prepared the bill, which introduces several dozen changes designed to simplify economic activity and clarify regulations that have caused uncertainty.

A significant amendment will allow taxpayers to verify a VAT payer's status up to five years in the past, a notable expansion from the current practice of checking only the current status. The draft also proposes a "VAT installment" institution, a simplification for entities involved in international trade. Furthermore, the legislation aims to clarify the place of supply rules for electricity, ensuring consistent VAT treatment whether electricity is delivered through the grid or outside of it.

The proposed changes also extend the scope of joint liability for a buyer concerning the seller's tax arrears. This applies to transactions where the buyer knew the invoice was issued by a non-existent entity, documented non-existent transactions, or reported inaccurate amounts. The joint liability will also cover certain intangible services like consulting, management, accounting, advertising, and research, including some services valued below 15,000 PLN, such as glasswork, painting, and installation services.

Additionally, the draft law seeks to eliminate the obligation to pay VAT within 14 days of acquiring a vehicle within the EU. It also removes the requirement to report the tax base for VAT purposes on intra-community acquisitions of goods and services that are exempt from tax. These measures are part of an effort to align Polish tax law with rulings from the Court of Justice of the European Union.