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SLIM VAT 3 - another simplification package for VAT taxpayers?

At the beginning of August this year, a draft law amending the VAT law and introducing a third package of simplifications for taxpayers - so-called SLIM VAT 3 - appeared on government websites.
Gerard Goliasz
Senior TAX Specialist

The simplifications introduced through the SLIM VAT 3 package, among others, include:

1. setting the gross sales limit for a small VAT taxpayer to €2,000,000 entitling to use the cash method and quarterly VAT settlements;

2. eliminating doubts regarding the rules of converting foreign currency for corrective invoices by using the primary exchange rate for both "in plus" and "in minus" adjustments;

3. introducing a simplification in the case of collective adjustments by using the average exchange rate of the National Bank of Poland (NBP/ECB) on the last working day preceding the issuance of the collective adjustment invoice;

4. introducing individualized sanction amounts up to a maximum of 30%, 20% or 15%, depending on the circumstances. The 100% sanction remains unchanged. These changes are introduced following the CJEU judgment in case C-935/19, which challenged the Polish VAT sanction;

5. designating a single authority, i.e., the Director of National Fiscal Information, as competent to issue binding excise information (WIA), binding tariff information (BTI) and binding origin information (WIP) and binding rate information (WIS);

6. abolishing the fee for issuing WIS;

7. binding the addressees for whose benefit the WIS was issued with the position presented by the tax authority in the WIS;

8. abandoning the requirement to have an invoice documenting intra-Community acquisition of goods when deducting input VAT;

9. abandoning the requirement to agree with the Head of the Tax Office on the prognosis of input VAT deduction by using the VAT coefficient (VAT ratio) and pre-factor in the case of taxpayers who have not reached the turnover within the specified limit. In such a situation, it will be sufficient to submit a notification on the estimated amount of the preliminary VAT ratio / pre-factor;

10. increasing from PLN 500 to PLN 10,000 the amount which allows for considering that the proportion determined by the taxpayer is 100%, in a situation where the proportion actually exceeded 98%;

11. the possibility to waive the VAT ratio adjustment when the difference between the initial and final proportion does not exceed 2 percentage points and when the non-deductible input tax resulting from the difference between the initial and final proportion and the multi-year adjustment does not exceed PLN 10,000;

12. extending the subjective scope of VAT exemption of investment fund management services for services provided to investment funds based in other EU member states;

13. expanding the catalog of possibilities of spending funds accumulated in the VAT account for obligations such as mineral tax, retail sales tax, grocery levy.

In principle, the new regulations will take effect on January 1, 2023.

You can read the draft law here.

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