A few months after the implementation of the Slim VAT 1 package (the second one is already published), the Ministry of Finance (MF) issued official explanations to the first one. The following are the most interesting conclusions from them.
According to the new regulations, the taxpayer will be able to reduce the taxable base or the tax due for the settlement period of issuance of the invoice by fulfilling the following conditions: he has agreed to the terms of the correction with the buyer of goods or recipient of services and has fulfilled them, he has documents confirming the above-mentioned agreement (and the terms of the provision are fulfilled) and the corrected invoice fulfills the agreed terms.
The taxpayer will be able to reduce the taxable base and the output VAT immediately after issuing the corrected invoice. In the previous legal status, it was necessary to receive confirmation from the purchaser or recipient of the service.
How to agree on the terms of the tax base reduction?
In the opinion of the Ministry of Finance, the safest forms of determining the conditions for reducing the taxable base or the tax due include a separate agreement, an annex to the agreement, provisions of the regulations, other documents commonly used in trade. What is interesting, oral arrangements, in particular by telephone, are also permissible. However, a simple note is not sufficient, rather a record of the conversation documenting the content of the agreement would be desirable (e.g. call recording).
What if there is no documentation?
When the taxpayer has no documentation confirming that the conditions for reduction were agreed with the contractor or documents confirming the fulfilment of those conditions, and when the conditions were actually agreed and fulfilled, the taxpayer shall reduce the taxable base or the output tax only for the accounting period in which he has such documentation. Therefore, the taxpayer must be able to prove when he received the documentation in order to know in which settlement period the taxable base or tax should be reduced. On the other hand, if the taxpayer does not take into account the correcting invoice in his settlement, despite the fact that he fulfilled conditions entitling him to do so, he will have to take into account the invoice for the period when he fulfilled them.
How to confirm that an invoice fulfils the conditions?
The Ministry of Finance recommends a document that confirms that the buyer is aware of the reduction of the taxable base, so the invoice itself may not be enough. In particular, confirmation of receipt of a correcting invoice, an information clause in email correspondence (regarding the time within which objections may be raised), electronic platforms for communication between the parties may be one such possibility.
Taxpayer A returns part of the goods purchased from Taxpayer B. According to an agreement concluded between the parties the return may take place at any unit of Taxpayer A. Taxpayer A returns the goods on 12 April and notifies Taxpayer B of this fact by e-mail. Taxpayer B refunds the value of the goods transferred and issues a corrected invoice to Taxpayer A, sending it together with an e-mail containing an information clause about the time of presentation of objections.
We also invite you to our YouTube channel Porozmawiajmy o podatkach where we discussed this topic: https://www.youtube.com/watch?v=tFGkcf40ZTg&t=1s