New VAT obligations for foreign companies
Amendment of the polish vat act
Entrepreneurs who do business in Poland and are registered there for VAT purposes will face new obligations as of November 2019.
Bank account in Poland
All companies registered in Poland as VAT payers must submit their bank accounts for inclusion in the list of taxpayers. It is important that they have an earmarked special account for VAT payments, which has been verified using the so-called “STIR system”. "STIR" is a state supervisory system based on algorithms and operated by the Polish “Settlement Chamber”.
If it is not possible to audit foreign banks via the STIR system, foreign entrepreneurs registered in Poland for VAT purposes are required to open such a special account in Poland. It is noteworthy that the Polish tax authorities are to reimburse the costs of maintaining the account.
Larger amounts may only be transferred to bank accounts indicated in the list of taxable persons. Otherwise, the business partner will not be allowed to set off business expenditures. In the most extreme case, the business partner may even be held jointly and severally liable by the VAT payer for irregularities in the VAT statement. These sanctions shall take effect at the beginning of 2020.
The previously applicable reverse charge procedure for domestic transactions will be replaced by the split payment procedure.
The new rules require certain (new) information to be included in the invoice. In addition, incoming invoices must be allocated appropriately. In certain cases, transfers may only be made using a Polish VAT special account. Any irregularities in this regard will be sanctioned in the future.
The obligation to use the “split payment procedure” applies to transactions between entrepreneurs (“B2B”) taxable in Poland if their gross value per month exceeds PLN 15,000.00 (equivalent to approximately EUR 3,000.00) and if the transactions involve supplies and services listed in an annex to the VAT Act.
Accordingly, the changes relate to the following supplies and services, among others:
- products made of steel, precious metals, non-ferrous metals;
- waste, old metal, secondary materials;
- electronic devices, in particular: processors, smartphones, telephones, tablets, netbooks, laptops, gaming consoles, print cartridges, toner hard drives;
- fuels for combustion engines, fuel oils and lubricating oils;
- emission rights for greenhouse gases;
- construction services;
- sale of car and motorcycle parts.
Author: Marta Ignasiak