- MDR – extensions of obligations (also for the past)
- New changes to the white list and the EU Quick Fix – doubt as to iC supplies documentation remains
- Sugar tax – promotion of healthy consumer products and a raise
- From 1st February 2020 the UK is not in the European Union anymore – a transition period, find out the rules
- VAT registration and the virtual office – effects on the past and future
1. MDR – extensions of obligations (also for the past)
On 5th February 2020, a bill amending the Act CIT, the Act VAT, the Act on the exchange of tax information with other acts and other acts was submitted to the Sejm. This project concerns, among others changes in the reporting of cross-border schemes in connection with the adaptation of Polish provisions to the requirements of the MDR Directive. The following MDR changes have been submitted to the project:
- the obligation to report MDR schemes, if the first activity related to the implementation of tax schemes was made in the period from 26th June 2018 to 31st March 2020,
- reporting dates for:
promoters – until 31st May 2020,
beneficiaries – until 30th July 2020,
supporting – until 31st August 2020,
- all numbers of tax schemes as of 1st April 2020 with legal effect are offered invalid,
- information on tax svhemes (MDR-3) must be signed with an electronic signature by all board members,
- reporting based on a new scheme template, which will apply from 1st April 2020,
- there is no need to re-determine who is to report again, the reporting obligation applies to the entity that previously provided information to the Head of the National Revenue Administration,
- a special power of attorney to act in cases of MDR will also authorize to act in other cases of MDR in this regard, unless otherwise indicated in the mandate,
- a special power of attorney submitted up to 31st March 2020 is still in force, unless revoked,
- automatic exchange of information shall be sent within a month from the end of the quarter in which the authority received information from the obliged entity,
- the first exchange of information is expected until 31st October 2020.
The new regulations are to apply from 1st April 2020.
2. New changes to the white list and the EU Quick Fix – doubt as to iC supplies documentation remains
On February 5, 2020, the draft implementing the EU directive on Quick Fixes finally got to the first reading. Changes in VAT will appear on three levels: taxpayer verification for applying 0% rate at WDT, chain transactions and unification of call-off stock warehouses. The same print (Print No. 208) included changes in the assumptions of the White List and new obligations regarding MDR.
The changes that will appear include ia. simplification for taxpayers: if we use the split payment mechanism, it will not be necessary to verify that the bank account was on the VAT payers list. In January, the ZAW-NR form also appeared, which allowed to avoid sanctions of an incorrect transfer order being submitted and the taxpayer had 3 days to do so. Currently, the legislator provides for this 7 days. The notification will have to be submitted to your own tax office, and not to the office competent for the contractor as it is today.
What is missing in the draft is the implementation of the provisions of Regulation 2018/1912, which leaves much doubt as to which provisions to apply – all the more so as the Ministry of Finance published in this respect only a press release instead of binding explanations.
Below a link to the legislative process and print: http://www.sejm.gov.pl/sejm9.nsf/druk.xsp?nr=208
3. Sugar tax – promotion of healthy consumer products and a raise
On February 4, 2020, the government adopted a bill to amend certain laws in connection with the promotion of healthy consumer choices.
The project is aimed at combating overweight and obesity by imposing a fee on beverages with a high content of sugar and active substances (such as caffeine, guarana or taurine), as well as the so-called “Monkeys”, which have already been covered by excise duty increases since January.
The fee covers the introduction on the domestic market of beverages with the addition of sugars that are monosaccharides or disaccharides, foodstuffs containing these substances, as well as sweeteners, caffeine or taurine. The obligation to pay the sugar fee is imposed on the entity selling beverages to retail outlets or retailing beverages in the case of the producer or the ordering entity, if the composition of the drink subject to the fee is part of the contract concluded by the manufacturer regarding the production of this drink for the orderer.
The sugar fee consists of a fixed part and a variable part. Under the permanent part, entities obliged by law will pay PLN 0.50 for the content of sugars in an amount equal to or less than 5 g in 100 ml of drink, or for the content of at least one sweetener in any amount. The variable fee is based on the fact that an additional fee of PLN 0.05 will be added to the price of each drink for every gram of sugar above 5g (limit from the solid part) in 100 ml of drink – per liter of drink. Drinks containing caffeine or taurine are subject to a fee of PLN 0.10 per liter of drink. The maximum amount of the fee is PLN 1.2 per 1 liter of drink.
In addition, the Ministry of Health plans to limit alcohol consumption by Poles and discourage them from purchasing high percentage alcohol sold in bottles below 300 ml. In this case, an additional fee will be 1 PLN for every 100 ml of 40% alcohol sold in bottles up to 300 ml and 88 gr for 250 ml a bottle of wine up to 14% by volume of alcohol.
Obviously, the above will affect price increases, regardless of returning inflation.
4. From 1st February 2020 the UK is not in the European Union anymore – a transition period, find out the rules
As of 1st February 2020, the United Kingdom is not a member of the European Union anymore. Currently, European Union has 27 members. From 1st February 2020 to 31st December 2020, there is a transition period under the UK Withdrawal Agreement. It is time to set new conditions for relations between the UK and the EU. During this time, tax relations with the UK for Poland and the Polish Entrepreneurs will remain unchanged. The rules for free movements of persons and the absence of customs duties, quotas and other barriers in the trade exchange shall still stand. The UK remains in the customs union with the EU. The rules will not change regarding the export of goods to the United Kingdom, in terms of VAT and excise duties. All rules regarding further economic cooperation after 31st December 2020 will be established on the basis of the new free trade agreement.
5. VAT registration and the virtual office – effects on the past and future
The court confirmed that it is not possible to register a company that will indicate the virtual address of the registered office for VAT purposes. Virtual office service is an increasingly frequent procedure on the market that helps reduce operating costs. This is a place which companies need to provide their headquarters and potentially where correspondence is to arrive.
Applications for registration for the purposes of VAT and VAT-EU were rejected by the Head of the Tax Office explaining that under the given address it is impossible to conduct business and the data is false. The company’s case was finally resolved in the Supreme Administrative Court in its judgment of November 13, 2019 (reference number I FSK 1363/17). In the justification, the judge confirmed that no key decisions are taken in the given place or that there is no management board which prevents VAT registration.
Therefore, such registrations can be submitted, and in turn for taxpayers facing with vat carousel decisions it is another argument demonstrating their unjustification. In decisions issued in these cases, the virtual office is often indicated as a premise of fictitious activity.
WIS – last month to prepare, over 130 decisions issued, over 40 refusals
Binding information is a complementary tool to individual interpretations – in terms of determination, this time binding. The percentage of refusals and redemptions shows that preparing a WIS application is not easy. Taxpayers at the time filed over 2,000 requests for a rate, so the pace is not impressive. As a rule the director of KIS has theoretically three months to respond. The ministry explains, however, that some goods require longer and more expensive works (in addition to PLN 40 per application). So far, food and building materials have been asked the most frequently.
For more information contact our expert Mirosław Siwiński – firstname.lastname@example.org.