Adjustment of transfer prices is a mechanism applied in settlements between related entities. The appropriate classification of a settlement as a transfer pricing adjustment (as…
Taxpayers are to pay taxes on individual bank accounts as of 2020
Polish tax law is subject to extensive changes each year. Bearing in mind recently published draft laws, 2020 will also bring further revolutions for VAT taxpayers - both in terms of principles of tax settlements, as well as technical elements and a variety of solutions, the implementation of which may improve the exchange of information between the taxpayers and tax authorities.
One of the proposals of the Minister of Finance is the introduction of an individual bank account number for each taxpayer (both for natural and legal persons) that will be used for paying liabilities due to:
- Personal Income Tax;
- Corporate Income Tax;
- non-tax revenues of the public budget (i.e. stamp duty, customs duties, etc.).
Former and current regulations concerning VAT payments
VAT is paid based on the territorial jurisdiction of a competent tax office according to the place of the registered seat of a taxpayer. In case of taxpayers being registered for VAT purposes only (i.e. EU based entities without a fixed establishment in Poland or entities from third countries), Drugi Urząd Skarbowy Warszawa-Śródmieście is set as the competent tax office for that taxpayer.
Additionally, each tax office has several different bank accounts, which are used separately for different types of taxes. Moreover, based on current regulations it is possible to have different tax offices set as eligible to collect VAT and income taxes. Additional difficulties may also arise when the taxpayer changes the place of their business establishment.
Implications resulting from the draft law
The draft law states that the taxpayer will obtain the individual bank account number by filling an online request or directly in the tax office. The number will be unique for each taxpayer based on their tax identification number. The draft law does not provide any statutory deadlines for obtaining the individual number both in terms of a request being filled by the taxpayer and by settling the matter through tax authorities.
The most important regulation concerns the allocation of the payments received by the tax office, in particular:
- If the taxpayer has no tax arrears and
- indicates the specific tax liabilities in the bank transfer made – the tax office will allocate the payment based on the taxpayer’s requests;
- does not indicate any specific tax liabilities in the bank transfer made – the tax office will credit the received payment firstly towards the oldest tax liability.
- If the taxpayer has tax arrears, any payment will firstly cover these past arrears. Depending on the description on the remittance, the payment will be assigned to specific tax arrears, i.e. if the taxpayer
- indicates the exact tax arrears – the tax office will allocate the payment based on the taxpayer’s request;
- does not indicate any specific tax arrears – the payment will cover the oldest tax arrears. The current tax liabilities will remain unpaid.
The remaining amount will be assigned to cover current tax liabilities, based on point 1 above. Otherwise, if the amount is not sufficient, the current tax liabilities will remain unpaid.
Pros and cons for the taxpayers
The purpose of the amendment is to maximally accelerate and simplify the process of tax payments – both from the taxpayer’s and tax authorities’ point of view. Moreover, the changes will be another element in the creation of a modern communication system, which will, in turn, mean that most of the information and documents crucial for the taxpayers will be obtainable online.
As a result, the taxpayer will cover tax liabilities resulting from different types of taxes by making one, aggregated payment to the same bank account number. The above will be especially useful in cases of changes in the tax jurisdiction (i.e. changes in location of the registered seat, registration of the fixed establishment, etc.).
On the other hand, the amendment may be a threat for the taxpayers who do not pay their tax liabilities within statutory deadlines, including those affected by unintentional delays in payments (i.e. very often tax arrears results from conversion of payments made in foreign currencies or from the remittances received from the bank accounts set in foreign-based banks, which may be transferred to the tax office for even up to several days). The tax authorities will be able to link the remittance with tax liabilities resulting from the submitted tax declarations almost immediately. It can be therefore expected that the period of receiving the notification of tax arrears will be significantly shortened. Moreover, the number of initiated enforcement procedures, which brings additional costs for the taxpayers, may also considerably increase.
After the change, settlements related to CIT, PIT, VAT will be possible only to the individual bank account number generated with using the account’s generator based on a PESEL number (for individuals) or a Tax Identification Number (for companies). The generator is located on the dedicated website of the Ministry of Finance.
You can find the generator link - HERE