The forthcoming amendment to the VAT Act (the so-called SLIM VAT 3) provides for beneficial solutions for non-cash taxpayers in the form of faster VAT refund. Following joint market analyses with the National Revenue Administration, the Ministry of Finance announces two forms of liberalisation of the conditions for fast VAT refund in the bill: permanent and temporary.

Permanent changes

In terms of permanent liberalisation of the conditions, the change is to shorten the required time of owning only online or virtual fiscal cash registers and meeting the condition of the value of sales achieved on these registers from 12 to 6 months before the period for which the taxpayer applies for a tax refund, with a simultaneous reduction of the value of gross sales recorded on the cash register from PLN 50.000 to PLN 40.000.

According to the Ministry of Finance, this change is justified by the growing number of online and virtual cash registers brought into use by taxpayers, which has an impact on expanding the group of businesses meeting the conditions for a faster VAT refund. The restriction related to the 12-month period of having only online or virtual cash registers is, in the opinion of the proponent of the project, a barrier that may cause an unjustified restriction for taxpayers. The foreseen changes are expected to increase the number of taxpayers meeting both conditions. At the same time, no threat to the state budget was perceived by this implementation.

Temporary changes

In addition to the permanent changes, the Act also provides for temporary regulations, to be in force until 31 March 2025. These changes refer to the reduction of the thresholds for the two economic conditions of the return. Taxpayers will be able to take advantage of the preferential VAT refund conditions during this period provided that:

• the required percentage of the value of sales using online or virtual cash registers in the total value of sales is no less than 70% (this will increase to the required 80% after the transition period);
• the required percentage of payments received using payment instruments in relation to the total value of sales wis no less than 55% (after the transition period, the threshold will increase to the required 80%).

According to the Payment Services Act of 19 August 2011 (Journal of Laws 2022, item 2360), a payment instrument is a personalised device or a set of procedures agreed between the user and the provider, used by the user to submit a payment order. Payment instruments can be, for instance, cards, mobile payments or transfer orders.

During the indicated 2-year period, the total value of sales, including tax, evidenced with the use of cash registers does not include the value of sales documented with invoices issued with the use of a cash register, where the value of sales and the amount of tax are evidenced in the cash register’s daily fiscal report (Article 146k section 2).

The total value of sales including tax is based on data collected in the Central Repository of Cash Registers, while the total value of sales including tax is based on the Single Control File [JPK_VAT].

These solutions are expected to give taxpayers time to increase the amount of non-cash payments registered using online or virtual cash registers of the total sales they make.

Changes in deliveries

The provisions of Article 87 sections 6j-6l of the VAT Act establish a particular rule for the service of orders extending the 15-day time limit for VAT refunds or decisions refusing to make a refund within 15 days. They provide for a fiction of delivery for cases where such an order or decision is not taken or received within 4 days of the date specified in subsections 6j(1)-(3), which constitutes a serious and constitutionally questionable breach of the principle of 14-day advice of delivery of any service.

The bill introduces section 6m to Article 87, according to which if a decision to prolong the 15-day time limit for a VAT refund would be delivered in line with the terms set out in sections 6j-6l, i.e. using the so-called fiction of delivery of the decision (i.e. with the expiry of 4 days from the date set out in section 6j points 1-3), the complaint shall be brought within 17 days (previously it was 7 days) from the date of delivery with the expiry of those 4 days. On the other hand, where a decision to refuse a VAT refund within the 15-day time limit would have been served as above, the appeal shall be lodged within 24 days (previously it was 14 days) from the date on which service was made with the expiry of the time limit of those 4 days.

As the justification of amendment states:

“For instance, if the decision to extend the 15-day return period is not received within 4 days of the date on which the letter began to be held at the post office, service shall be considered to have been effected on the expiry of those 4 days (Article 87 section 6j point 1). The period of 17 days for bringing a complaint would be counted from the expiry of the 4 days from the first advice letter (legal fiction of service) regardless of whether the taxpayer picks up the decision from the postal facility later or the uncollected letter is returned to the authority.”

The proposed amendment is intended, according to the justification, to strengthen the procedural framework for the fast refund of VAT, so that the taxpayer is in any event guaranteed the possibility to make an effective complaint against an order extending the time limit for the refund of VAT or an appeal against a decision refusing a refund, regardless of how they were delivered or whether the order was later taken or received by him. The extension of time limits is reasoned by the specific nature of this tax preference and the balancing of the taxpayer’s procedural rights.

Evaluation of the change of terms

Reading the above change and its justification, it is difficult not to get the impression that it has an ulterior motive. And, as is usually the case with fiscal ideas, it is unlikely to mean a change in favour of taxpayers. According to the amendment, the total deadlines for filing a complaint and an appeal are 21 days and 28 days respectively. Under the current rules, it is also 21 days for a complaint (14 days of advising plus 7 days for lodging a complaint) and 28 days for an appeal (14 days of advising plus 14 days for lodging an appeal). In essence, therefore, the total time does not change in any way. The time for drafting the above-mentioned appeals is increased, which of course gives increased opportunity for its effective filing (more time to get acquainted with the decision and, of course, to draft the letter). However, the time for receipt is drastically reduced – by as much as 10 days. At the same time, it does not appear from the explanatory memorandum that the rules on keeping correspondence in the post office would change, so it should continue to be available for a fortnight at the post office. So the question is whether this change is not calculated to make it more difficult to receive correspondence? Furthermore,what about correspondence on epuap, which rather dominates these days? We will find out in practice.

From when?

According to the assumptions of the Ministry of Finance, the SLIM VAT 3 package was to be in force from 1 January 2023, but in the course of the legislative work of the Council of Ministers, it was decided to postpone the entry into force of the aforementioned draft amendments to the VAT Act to 1 April 2023. The amendment bill is still being discussed by the Council of Ministers and has not yet been submitted to the Parliament. The amendments of a temporary nature will be in force as of the same moment as the other regulations, and their duration will unchangeably elapse on 31 March 2025.

Summary

The modifications proposed in the SLIM VAT 3 project will probably achieve their aims and popularise the execution of non-cash transactions, thanks to which more and more taxpayers will be subject to the aforementioned provisions and will be given the opportunity for a faster VAT refund.