Changes in the scope of the mandatory split payment
The last part of the changes contained in the SLIM VAT2 draft concerns certain modifications to the split payment mechanism. Due to the technique of the current regulation in this respect, the amendment applies to both the VAT Act and the Banking Law and, as you can see, this change will come into force at the latest of all.
Extension of the possibility to transfer funds from the VAT account
Firstly, an exception has been added to the refusal to grant permission to transfer funds from the VAT account to the entrepreneur’s account. Head of the tax office is obliged to refuse the permission for such transfer, among others, in case the taxpayer is in arrears with taxes and charges referred to in Article 62b Section 2 Item 2 letter a of the Banking Law – in the amount corresponding to this arrears together with default interest, as of the date of the decision. This refusal, however, does not apply to the case where the taxpayer, in relation to such arrears, has a decision issued on deferment or payment in instalments of tax arrears or interest on tax advances not paid on time. The amendment in this respect obviously corrects an earlier omission in this respect, as does the subsequent one.
Also in the provisions of the Banking Law, a number of facilitations have been introduced.
The first is related to the scope of possibilities of crediting a VAT account. Currently, one of the titles was, among others, transferring funds from another VAT account of a VAT account holder kept in the same bank. After the amendment, it will be possible to transfer funds from a VAT account held in another bank, as well as to transfer funds to a VAT account held in another bank (which is quite logical, but required amendment of two provisions).
In turn, the VAT account will also be used to finance receivables due to social insurance contributions for farmers referred to in the Act of 20 December 1990 on social insurance of farmers (Journal of Laws of 2021, item 266), and receivables due to health insurance contributions referred to in the Act of 27 August 2004 on health care services financed from public funds (Journal of Laws of 2020, item 1398, as amended), which the Agricultural Social Insurance Fund (Kasa Rolniczego Ubezpieczenia Społecznego) is obliged to collect.
Transfer of funds from a technical account
In accordance with the provision of Article 62e of the Banking Law. Before closing a VAT account, the bank shall credit the amount of funds accumulated on the VAT account, on the day of closing the VAT account, to the other VAT account indicated by the holder of the VAT account with the same bank. However, if the taxpayer does not indicate such account, then the bank closing his account before closing the VAT account shall
1) credit the settlement account for which this VAT account of that holder is opened with the amount of funds accumulated on the VAT account, as at the date of closure of the VAT account – in accordance with the information on the provision referred to in Article 108b(4) of the Law of 11 March 2004 on Value Added Tax, or
2) transfers funds accumulated on the VAT account as of the day of closing this account to the separate technical account kept in the same bank and used to identify the VAT account holder – if on the day of termination of the agreement on the settlement account for which the VAT account was kept he does not have information on the decision of the Head of the Tax Office on the consent to transfer funds to another taxpayer’s bank account.
After the amendment, the taxpayer will be able to apply to the head of the tax office for permission to withdraw these funds accumulated on the technical account described above. Although further added provisions mainly contain rules for issuing a decision in this respect, some of them are worth pointing out. First of all, the head of the tax office will have, as in the case of approval for transfer of funds from the VAT account, 60 days to issue a decision in this respect, which will also be appealable, if only because it will determine the amount of funds that can be withdrawn. Interestingly, the draft does not specify the rules of determining this amount. The prerequisites for refusal of consent, as well as exceptions from them (including those discussed above and resulting from the amendment) will be analogous to the decision on transferring funds from the VAT account.
Additionally, the draft indicates that an entity which is not a taxpayer will also be able to submit a request in this respect:
1) whose funds were transferred to a technical account;
2) who does not have a seat of economic activity or a permanent place of business activity in the territory of the country.
Relevant technical changes related to these provisions have also been introduced to the Banking Law.
What is important, the separate technical account used to identify the VAT account holder is also exempt from seizure under a court or administrative enforceable title relating to execution or securing of receivables other than those listed in Article 62b(2)(2) (i.e. receivables which can be financed from the VAT account).
Scope of the mandatory split payment
Finally, the last change in the scope of the IRP is the change in the wording of item 60 of Schedule 15 to the VAT Act.
It now includes:
60 | ex 26.20.1 | Computers and other automatic data-processing machines and parts and accessories thereof – only computers and other automatic data-processing machines |
After the amendment it will read:
60 | 26.20.1 | Computers and other automatic data-processing machines, and parts and accessories thereof |
The removal of the “ex” by the PKWiU heading and the words after the hyphen means in an obvious way an extension of the scope of the obligation to apply split payment, which, of course, may be regarded as a certain simplification (there is no need to analyse what falls under this heading and what does not), but rather not very beneficial to taxpayers.
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