According to prior notification, we would like to inform you about significant changes in Polish tax law. All following changes came into force on 1 April 2013
Changes in VAT as regards free of charge transfer of the goods
As of 1 April 2013 taxation of free of charge transfer of goods is changed. According to the new regulations free of charge transfer of goods is treated equally with supply of goods for consideration if a taxpayer was entitled in whole or in part, to reduce the amount of the output VAT by the amount of the input VAT while acquiring, importing, producing said goods.
In consequence free of charge transfer of goods will be taxable even if a taxpayer couldn’t wholly or partly benefit from tax deduction, but in transferred goods there were replaced parts for which taxpayer could reduce (wholly or partly) the amount of the output VAT by the amount of the input VAT while acquiring those parts.
Change of definition of the sample
Since 1 April 2013 by sample there should be understood a specimen of a product, or its small amount, which allows the characteristics and qualities of the product to be assessed. According to new wording of the provisions, sample should intend to promote the sales. Moreover a sample shouldn’t result in final consumption, other than where final consumption is inherent in such promotional transactions.
What is more, free of charge transfer of samples or gifts of small value will remain not taxable if a taxpayer is able to prove that such transfer is a part of its economical activity.
Calculation of tax base from foreign currency
Since 1 April taxpayers can choose if they want to convert taxable amounts determined in foreign currency using exchange rates quoted by the National Polish Bank or by the European Central Bank. In both cases taxpayer should use exchange rate quoted on last day proceeding day on which the tax obligation arose. In case of choosing exchange rates published by ECB, currencies other than euro should be converted using exchange rates for each of them against the euro.
Changes in documents confirming export of the goods
Since 1 April 2013 catalogue of documents which can confirm exportation of goods outside of the territory of European Union was extended. Now, such exportation can be confirmed by:
- Electronic document, received from system, or, confirmed by customs office, print out of such document.
- Electronic document received out of the system if its authenticity is ensured.
- Export declaration in paper form, submitted outside the system, or its copy confirmed by customs office.
The above list expands the catalogue of documents which entitle the use 0% VAT rate in export of goods. It also eliminates doubts and finally determines that electronic document received out of the system can confirm exportation of goods. It has practical implications especially in indirect export.
New definition of building land
The changes settle interpretational doubts regarding which lands should be considered as vacant and, therefore, should be exempted from VAT. The legislator unambiguously indicated lands designated for development as those which are described as such according to local land development plan, or, in case of lack of such a plan, according to conditions of development referring to regulations considering land use.
New obligations of foreign entities registered for VAT in Poland
Based on the tax provisions being in force till the end of March 2013, foreign entities (not having a fixed place of business in Poland) supplying goods in Poland did not show Polish VAT on their invoices. In consequence, Polish VAT was settled by the entity acquiring those goods, through the reverse charge mechanism. However, as of 1st April 2013, such foreign entities, registered for VAT in Poland, supplying goods to the Polish companies (having a seat or a fixed place of business in Poland) will be obliged to show the Polish VAT on their invoices and settle it in the VAT returns.
Changes in exemptions from VAT
Since 1 April 2013 delivery of the goods used only for purposes of activity exempted from VAT is exempted from VAT. However, the exemption may be executed only if when during acquiring, import or production of those goods, a taxpayer wasn’t entitled to deduct input VAT. In consequence, institutions which provide services exempted from VAT will enjoy tax exemption on supply of used goods (their assets) if they weren’t entitled to deduct the input VAT while acquiring said goods.
Changes concerning VAT rates
Finally it is worth to mention changes concerning VAT rates on some goods. Change which will have impact on fans of coffee or tee with cream, will be elimination from category of goods taxed 5% VAT rate of beverages, which were prepared from tee or coffee brew. It doesn’t matter what proportion of brew beverage contents. It means that even very creamy “latte” will be taxed with 23% VAT rate.
Tax rates will also increase (from 8% to 23%) for folk art goods and some of TV and radio services.