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27 May 2021

SLIM VAT 2 – favorable changes in VAT regulations?

According to the legislators, SLIM VAT 2 is a set of fifteen significant legislative changes in the field of VAT law. The payers can expect updates related to the issuing of corrective invoices, advance invoices, and duplicates, as well as new deadlines and changes in financial thresholds.

Recently, the public consultation stage has ended (remarks were to be submitted until May 7th, 2021). Therefore, the SLIM VAT 2 will probably enter into force at the very beginning of 2022.

The SLIM VAT 2 amendments will focus on five key areas:

  • invoicing (proposals to simplify the process),
  • VAT deduction,
  • international trade (clarification of the VAT law),
  • real estate trade,
  • split payment (MPP) and relief for bad debt (corrections and regulations).

About previous SLIM VAT regulations

The first edition of the SLIM VAT amendments entered into force at the beginning of 2021. The acronym SLIM means “simple, local, and modern” – which, according to the announcement of the Ministry of Finance, suggests a tax that is easy to use, adapted to the local context, and responsive to modernization in terms of e-administration services.

You can read more about the first SLIM VAT here.

SLIM VAT 2 – new rules for invoice issuing

The second SLIM VAT extensively interprets the provisions on the practical side of invoicing, especially focusing on the rules of correction, issuing advances, duplicates, and the related deadlines.

  1. Correction invoices

According to the Ministry of Finance, under the new regulations related to correcting invoices, not only the literal “correcting invoice” (or “correction”) footnote will be entirely optional, but also stating the reason for issuing such a document will not be required.

Additionally, the issuer will also not have to provide the date of completion/completion of the delivery/performance of the service, or the date of receipt of payment. Also, the collective correcting invoices will be allowed, which should contain all items from the invoice to be corrected (i.e. correction of an individual or all deliveries/services).

  1. Advance invoices – deadline

The current deadline for issuing an advance invoice – 30 days – will be extended to 60 days before the delivery of goods/performance of the service/receipt of goods.

  1. Duplicates

The new SLIM VAT 2 regulations propose the abolition of duplicate invoices. The projected art. 106g sec. 3b of the VAT Act amendment states that if an invoice is damaged or lost, another copy of the invoice is handed over to the buyer. Thus, duplicate invoice entry will also disappear from the JPK_VAT file structure, because the taxpayer will not be obliged to send a copy of the invoice or data contained therein to the tax office.

As in the case of correcting invoices, the requirement to include an annotation on the duplicate invoice (e.g. “duplicate”) will be removed.

Transport tickets as VAT invoices

The current regulations recognize a document confirming the journey over a distance of no less than 50 km (usually a ticket) as an invoice, (regardless of the means of transport). The SLIM VAT 2 includes provisions abolishing the said kilometers limit. Thanks to the change, carriers will not be forced to issue invoices, and the buyer will be able to exercise the right to deduct VAT based on a document, regardless of the distance traveled.

In parallel with the above changes, the JPK_VAT file with the declaration will also be adjusted, about which the legislator will inform in an update communication.

Other changes in the amendments include:

  • possibility to transfer funds between VAT accounts in different banks;
  • increasing the time for bad debt relief from 2 to 3 years;
  • possibility to pay ZUS contributions from VAT accounts;
  • changes in VAT deductions for cars;
  • changes in the taxation of import of services;
  • “in minus” adjustments in the case of import of services and intra-community acquisition of goods.

The above list of thematic fields has merely been suggested by the legislators. Taxpayers can expect these issues to be developed and clarified in the coming weeks.

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