The Ministry of Finance announced the introduction of the first VAT simplification package – SLIM VAT (simple, local and modern). The planned changes concern four areas: invoicing, export, exchange rates, financial benefits. Entrepreneurs should already be informed about the changes and their consequences for their business.
Clearly, the new rules will make it easier for taxpayers to settle a correcting invoice in the minus. Under SLIM VAT, the condition of obtaining confirmation of an in-minus correction invoice from the client will be removed. As a result, the taxpayer will be able to reduce the tax base already in the period of issuing the correcting invoice.
There will also be added provisions regulating the method of accounting for the in plus correction invoices, which were lacking so far. This has led to great uncertainty for taxpayers as to the correctness of settlements. Correction invoices in plus will be recognized in settlements in the month of issue.
For the application of the 0% rate, the deadline for export of goods will be extended from 2 to 6 months from the date of receiving the advance payment. This is to solve the problem of long-term supplies. This regulation will particularly benefit those companies whose business is based on exporting goods to foreign markets.
Thanks to the VAT Simplification Package, the taxpayer will be able to apply the exchange rate applicable to the conversion of revenue into income tax also for VAT purposes. Therefore, it will be possible to use the same exchange rate for one transaction.
Entrepreneurs can also count on additional financial benefits. Among them one may point out:
- extension of the deadline for VAT deduction from invoices to four monthly settlement periods;
- the possibility to deduct VAT from invoices for accommodation services purchased for resale;
- increase of the limit for not registering gifts of small value from 10 to 20 PLN.
The proposed simplifications are to enter into force in early 2021. As announced by the Ministry of Finance, it is the beginning of a gradual process of simplifying the procedure for taxpayers and removing burdensome and time-consuming formal obligations. The project has been prepared in cooperation with entrepreneurs in order to adapt the regulations to the needs of companies as much as possible. Further proposals for simplification should be presented at the end of this year.
The legal changes, even those acting for the benefit of the taxpayer, generate the need to modify the existing intra-company procedures. Appropriate preparation of a company for SLIM VAT will allow to maximize profits related to time and financial resources saved.
We will be happy to answer any questions you may have in this respect in order to make it easier for you to adapt your daily practice to the current regulations.
Authors: dr. Małgorzata Stępień, attorney at law and tax consultant; Dominika Zbonik, attorney at law and tax consultant