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Individual VAT Interpretations

Apply for a tax law interpretation regarding your individual case with KR Group

Individual VAT Interpretations

An individual tax interpretation is the official position of the Director of National Tax Information, mayor, city president, district governor or provincial marshal (depending on the type of tax and the state or local government level); assessing the validity of your company's understanding and application of tax law. The taxpayer's compliance with the position of the tax authority reduces potential tax risks.

Requests for an interpretation can be made individually or jointly with several interested entities.

It is worth entrusting professionals with the application for an individual VAT interpretation. The VAT team at KR Group has been obtaining individual interpretations for their clients for several years. We specialize in international transactions, but provide support in the entire scope of tax.

When should you ask for an individual VAT interpretation?

A VAT tax interpretation may be requested at any time. However, we suggest that you do not postpone filing it in case of any ambiguities or doubts concerning:

1/ Having a fixed establishment – (FE) - this affects the place of taxation of services. In addition, circumstances may determine whether the taxpayer is required to use the National System of e-Invoices (KSeF);

2/ Determining a moving supply in a chain transaction, i.e. a supply that may benefit from a preferential VAT rate - in this case, factual circumstances such as who is the organizer of transport may be relevant, but also legal circumstances, such as where the entity is located or whether it is registered for VAT in an EU country and what VAT number will be used in the transaction;

3/ Determining the country in which the service is taxable - particularly important in the context of services within real estate, rental of transport or in transport services - our intuition doesn’t always keep up with the intentions of the legislator. Something that may be seemingly obvious to us, may not be deemed as such from the point of view of the principles guiding tax law;

4/ Documentation needed for the application of the 0% rate - this may include different types of transactions to which the 0% rate may be applied, such as:

    • Export of goods: where, in addition to IE599, the taxpayer may also use alternative documents confirming exports from the EU territory;
    • WDT: in addition to documentation confirming the transport from point A to point B such as a consignment note (CMR), the taxpayer may use other documents that are not listed in the regulations; and
    • domestic transactions taxed at a 0% rate, provided the appropriate documentation is collected,

- It is worth confirming in these cases whether these documents are accepted by the tax authorities;

5/ Determining the entitlement to deduct VAT from a received purchase invoice -  in this case, sometimes what is most problematic is what should be obvious in principle, that is, determining whether the purchase is related to taxable activities.;

6/ In all other matters, if you are unsure about the tax consequences of a particular type and manner of transaction.

A very important element of applying for an interpretation, is the applicant's presentation of facts. This issue can be critical, to the extent that the interpretation is designed to play a protective role for the taxpayer. The applicant should present the facts as honestly and accurately as possible. If it turns out that the facts were different, the tax authority may challenge the "protective power" of the interpretation. For the same reason, an interpretation is binding only on the taxpayer who requested it; an individual interpretation issued for another taxpayer, even if the facts were identical, has no protective function.

Gerard Goliasz
Senior VAT Specialist
Gerard_Goliasz_cytat

Our Support

KR Group comprehensively supports clients in the process of obtaining an Individual Interpretation:

  • Analysis of the facts.
  • Preparation and submission of a request for a written individual interpretation of VAT regulations.
  • Contact with the authorities during interpretation proceedings.
  • Assistance in challenging an unfavorable VAT interpretation.

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FAQ

When can an individual interpretation be requested?

There are no restrictions as for the timing of a request for a tax law interpretation, but depending on whether the request is to address already existing or future tax consequences, its protective scope may vary.

What is the deadline for issuing an individual interpretation?

The issuance of an individual interpretation should take place within 3 months from the date of receipt of a properly prepared application by the competent authority. If the application is incomplete, you will receive a summons to supplement it.

When will I not receive an individual interpretation?

An individual interpretation will not be issued if the case:

  • has already been resolved in a general interpretation issued by the minister responsible for public finances;
  • is the subject of an application for a binding rate information (WIS - a decision that indicates which VAT rate is applicable to a given good or service);
  • justifies the suspicion that your action may be aimed at tax avoidance or an abuse of VAT law
  • has been presented in an insufficient manner and has not been supplemented in accordance with instructions provided in the authority's summons;
  • does not concern the provisions of the tax law under the tax acts;
  • concerns the jurisdiction, powers and duties of the tax authorities;
  • relates to your individual tax case, which on the date of submitting the request for interpretation is the subject of, for example, pending tax proceedings, tax inspection, customs and fiscal inspection.
On what principles does a taxpayer’s protection work?

The taxpayer's protection consists of the exemption from interest and a waiver of penal and fiscal consequences if the authority, in the course of, for example, a tax inspection, takes a different position than that expressed in the interpretation - tax authorities are not bound by the position expressed in an individual interpretation. If, on the other hand, the interpretation relates to a future event for which the tax consequences will occur after the interpretation is issued, it additionally protects us from a surcharge/payment of the tax itself.

Individual tax interpretations may be amended, repealed, or expire due to amendments to the law.

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