Individual VAT rulings

Individual VAT rulings – for whom?

Individual VAT rulings at KR Group

Individual VAT rulings – KR Group offer

FAQ

• When can an application for an individual ruling be submitted?

  An application for an individual tax ruling can be submitted at any time during the conduct of business activity, without time restrictions. Depending on whether the ruling is to concern already occurred tax events or planned activities, the scope of legal protection may differ.

• What is the time limit for issuing an individual ruling?

  The issuance of an individual tax ruling should take place within 3 months from the date of receipt of a correctly prepared application by the competent tax authority. If the application is incomplete or requires additional information, the tax authority sends a summons to complete the documentation, which results in a corresponding extension of the deadline.

• When will an individual ruling not be issued?

  An individual ruling will not be issued when the matter:

  • has already been resolved in a general ruling issued by the minister responsible for public finance matters;
  • is the subject of an application for binding rate information (WIS – a decision indicating which VAT rate applies to a given good or service);
  • gives rise to a reasonable presumption that your action may be aimed at avoiding taxation or constituting an abuse of rights in the area of VAT;
  • has been presented in an insufficient manner and has not been supplemented by you in accordance with the instructions contained in the authority’s summons;
  • does not concern tax law provisions arising from tax statutes;
  • concerns the jurisdiction, powers and obligations of tax authorities;
  • concerns your individual tax matter which, on the date of submission of the ruling application, is the subject of e.g. ongoing tax proceedings, a tax audit or a customs and fiscal audit.

• On what basis does the protection of an individual ruling operate?

  Taxpayer protection consists of exemption from interest and waiver of penal fiscal consequences if the authority, during e.g. a tax audit, takes a different position from that expressed in the ruling – tax authorities are not bound by the position expressed in an individual ruling. However, if the ruling concerns a future event for which the tax consequences will arise after the ruling is issued, it additionally protects us against payment/additional payment of the tax itself. Individual tax rulings may be amended, revoked or expire due to amendment of regulations.

• When is it worth applying for an individual VAT ruling?

  An application for a VAT tax ruling can be submitted at any time. However, we suggest not delaying its submission in cases where there is an ambiguity or doubt regarding:

  • having a fixed place of business – this affects the place of taxation of services. 
  • determining the “moving supply” in a chain transaction, i.e. the supply that may benefit from the preferential VAT rate – in this case, factual circumstances may be relevant such as e.g. who is the organiser of the transport, but also legal circumstances, e.g. where a given entity has its registered office or whether it is registered for VAT in an EU country and which VAT number it will use for a given transaction;
  • determining the country in which a service is subject to taxation – this is particularly important in the context of services related to real estate, the rental of means of transport or transport itself – our intuition does not always keep pace with the legislator’s intentions, and something that appears obvious to us may not be so from the point of view of the principles guiding tax law;
  • documentation required to apply the 0% rate – this may concern various types of transactions to which the 0% rate may be applied, e.g.:
    • export of goods: where, in addition to IE599, the taxpayer may also use alternative documents confirming the removal from EU territory;
    • Intra-Community Supply of Goods (ICS): in addition to documentation confirming transport from point A to point B such as e.g. a waybill (CMR), the taxpayer may use other documents not listed in the regulations; and also
    • domestic transactions taxed at the 0% rate, provided that the appropriate documentation is collected,
  • determining whether the right to deduct VAT from a received purchase invoice is available – in this case, what is sometimes most problematic is what should in principle be obvious, i.e. establishing whether the purchase is related to taxable activities;
  • in all other matters where you are not certain what tax consequences a given type and method of conducting a transaction may bring.

• What is Binding Rate Information and what does it contain?

  Binding Rate Information (WIS) is a decision issued by the Director of the National Revenue Administration on the application of an entrepreneur. An entrepreneur who has received a decision under Binding Rate Information is protected during a tax audit in such a way that the inspecting authority cannot impose sanctions on them for applying the rate indicated in the WIS.

  The application for Binding Rate Information, in addition to the data of the applicant and the authorised representative, contains:

  • a detailed description of the goods or service, allowing for their identification in order to classify them in accordance with the Combined Nomenclature (CN) or the Polish Classification of Construction Objects (PKOB) or the Polish Classification of Goods and Services (PKWiU);
  • a declaration – “Being aware of criminal liability for submitting a false declaration, I declare that on the date of submission of the application, in the subject matter of the application, no tax proceedings, tax audit or customs and fiscal audit are in progress and that in this respect the matter has not been resolved as to its merits in a decision or ruling of the tax authority” (this declaration does not apply to the contracting authority within the meaning of Public Procurement Law.

• What does the Binding Rate Information application concern?

  The application may concern only the provisions regarding the tax rates on goods and services of 0%, 5%, 8% or 23%, with the exception of the taxation of intra-Community supply of goods and export of goods. Binding Rate Information may also be issued in the area of classification of goods or services for the purposes of applying the provisions on the tax on goods and services that contain such classification.

• What is the validity period of WIS?

  The decision is valid for 5 years from the date of issue, unless before that date the WIS expires by operation of law in the event of a change in the tax law regulations that are the subject of the WIS.

• What does the support in obtaining an individual VAT ruling look like?

  KR Group, as a tax and accounting group, provides comprehensive support to clients throughout the process of obtaining an individual tax ruling. We provide:

  • analysis of the factual background;
  • preparation and submission of an application for an individual tax ruling;
  • communication with the tax authorities during the VAT ruling process;
  • support in challenging an unfavourable individual VAT ruling.

  The service includes the preparation and submission of an application for an individual tax ruling together with a detailed analysis of the client’s tax situation. Thanks to KR Group’s tax advisory services, companies gain greater certainty regarding their tax settlements, reduce the risk of disputes with tax authorities, and obtain clarity on how to carry out planned transactions in a secure and compliant manner.

  We support our clients not only in the area of individual VAT rulings, but also in the field of VAT Compliance,  from ongoing verification of VAT settlements, preparation of VAT returns and SAF-T (JPK) files, to identification of tax risks and implementation of secure internal tax procedures within the organisation.