VAT- settlement in Poland under new rules without freezing funds

From 1 July 2020 VAT on the import of goods to Poland can be settled directly in the tax declaration. Previously, this required a special permit. The aim of the amendment is to improve the competitiveness of Polish ports, which until now have been losing the battle for the customer with i.a. German and Dutch ports. In these countries, the possibility of non-cash settlement of imports for all taxpayers has been long provided for. The new rules for settlement of the VAT will avoid freezing of funds and will have a positive impact on the financial liquidity of companies.

Previous rules have reduced the competitiveness of Polish companies

So far due VAT on the import of goods to Poland should in principle be paid within 10 days of customs clearance. Taxpayers could then deduct the tax paid in the relevant tax declaration, which frozen the entrepreneur’s funds for about 90 days. Taxpayers often decided to carry out an import procedure in another EU member state and subsequently settle intra-Community movement of goods.

Currently, every active VAT taxpayer can avoid the obligation to pay VAT on import earlier and settle it directly in one VAT return.

In practice, this means that it is possible to avoid temporary freezing of the amount of VAT paid to the customs office, which makes importing goods into Poland more advantageous.

What formal conditions must be met?

Such a solution will be available for taxpayers who make customs declarations through a direct or indirect representative. Traders will have to present an appropriate and current (not older than 6 months) certificates of no arrears in taxes and social security contributions and confirmation of registration as an active VAT taxpayer. For convenience- the required documents may also be replaced by a written statement of the taxpayer with the appropriate content.

The new regulations do not provide for special requirements for foreign VAT taxpayers who are registered in Poland only for VAT purposes and do not pay, for example, social security contributions. In our opinion, it will be sufficient in such a case to submit an appropriate statement, which will ultimately be assessed by the competent authority.

The documents should be submitted to the head of the customs office in view of the taxpayer’s place of residence or headquarters. In the case of taxpayers who do not have their place of residence or headquarters in Poland, the head of the Lower Silesian Customs Office in Wrocław is competent.

The taxpayer is also obliged to present documents confirming the settlement of VAT due on import within 4 months after the month in which the customs declaration was accepted to the competent head of customs office. However, this obligation will probably be repealed after 1 October 2020.

When will companies benefit from the simplifications of VAT settlement?

The provisions do not directly regulate the moment from which the simplification may be applied. It seems that it will be possible already in the next settlement period after fulfilling formal conditions. In this regard, taxpayers must remember to submit the relevant documents to the competent head of the customs office. Failures in this case will result in the inability to take advantage of the simplifications.

If you are interested in taking advantage of this simplification or have you further questions in tis topic, please contact our VAT specialists. Our team will help you to make an appropriate notification, correctly settle the tax, as well as take care of the timely submission of documents to the relevant office.

Authors: dr. Małgorzata Stępień, attorney at law and tax consultant; Dominika Zbonik, attorney at law and tax consultant