Slim VAT 3 package - changes starting July 1, 2023.

Changes to provide better liquidity for taxpayers

Raising the sales threshold for so-called small VAT taxpayers - until now, the sales turnover threshold for small taxpayers was PLN 1.2 million. With the entry into force of Slim VAT 3, this limit will be PLN 2 million. This change will increase the number of taxpayers entitled to use the cash method of VAT as well as quarterly settlements.

Extension of the possibility to dispose of funds accumulated in the VAT account - according to the amendments, funds accumulated in the VAT account will also be able to pay a wider range of public dues, including: tax on the extraction of certain minerals, tax on retail sales, the so-called sugar tax, the so-called shipbuilding tax, the so-called "monkey" tax and tonnage tax.

Regulating VAT group settlement using VAT accounts - Slim VAT 3 introduces the possibility of transferring funds from a group member's VAT account to the group representative's VAT account.

Changes in VAT accounting

Increase of the amount allowing the application of the ratio of 100% - according to the Slim VAT 3 package, in a situation where the ratio exceeded 98%, the full right of deduction will be entitled to the condition that the potential non-deductible amount according to the ratio will not exceed PLN 10,000 (instead of the previous PLN 500). In addition, the amendments provide for the possibility of waiving the VAT ratio adjustment when the difference between the initial and final proportions does not exceed 2% with the condition that when the non-deductible input tax resulting from the difference between the established proportions and the multi-year adjustment (applicable to certain fixed assets or intangible assets) does not exceed PLN 10,000 in total.

Clarification of the rules for converting foreign currency amounts for correction invoices - both for corrections increasing the value of the transaction (in plus) and decreasing the value (in minus), the rate at which the original invoice was converted should be used. On the other hand, with regard to so-called collective adjustments, the exchange rate of the last business day preceding the issuance of the collective adjustment invoice will be applicable.

Changes in the settlement of international transactions

Clarification of the moment at which WDT transactions are shown in VAT return adjustments - in the case of late receipt of documents entitling the application of the 0% rate, the transaction will be shown on the date when the tax obligation arises (i.e., as a rule, on the date the invoice is issued) instead of on the date the supply is made.

Accounting for input tax on VAT without receiving an invoice - Slim VAT 3 package repeals the formal requirement to have an invoice for VAT deduction on VAT transactions.

Declaration corrections in the case of remote sales - the amendments provide for the introduction of provisions allowing the submission of declaration corrections outside the OSS and IOSS system (directly to the Lodz Tax Office) in the foreseen cases (e.g., in the situation of discontinuation of one of the above procedures).

WIS changes

Extension of the binding force of WIS (binding rate information) - according to Slim VAT 3, during the validity period of WIS, the decision will be binding on the taxpayer and the entity planning to carry out the taxable activity to which the issued WIS applies. Importantly, the above also applies to information issued before July 1, 2023.

Determining the period of validity of WIS - according to the amendments, WIS decisions are to be effective from the day after the date of service for a period of 5 years, unless there has been an earlier amendment, revocation or expiration of such decision. Applications for WIS are also to be free of charge.

Consolidation of the issuance of binding information - the Director of National Fiscal Information is to be the sole authority authorized to issue WIA (binding excise information), WIT (binding tariff information), WIP (binding origin information) and WIS (binding VAT rate information).

Other VAT changes

New rules for calculating VAT sanctions - according to the amendments, the so-called VAT sanction is to be applied by the tax authorities on an individualized basis, taking into account, among other things, the amount of the default and the circumstances under which the VAT arrears arose.

Expansion of the circle of entities excluded from sanctions for failure to apply the mandatory split payment mechanism - the change refers to the situation of payment of the amount of tax resulting from the received invoice also by a taxpayer other than the taxpayer indicated on the invoice (this applies, among others, to the factor), in which case the taxpayer will not be subject to sanctions provided for the omission of payment using the mandatory split payment mechanism.

Changes in the settlement of the so-called TAX FREE system - introduced the possibility of making adjustments to the VAT due on the supply of goods made to a traveler under the TAX FREE system in the event that the tax was refunded in cash after the expiration of the deadline for filing a tax return in which the supply was settled.