Tax Alert (VAT) - 19/2011VAT changes since 1 January 2012 |
On 1 January 2012, next amendments to the VAT Act come into force. What are the major changes introduced?
International occasional carriage of passengers by road
Starting from 1 January 2012, we will have new regulations which introduce a new procedure for registration and settlement of tax paid by international road carriers (registered abroad) which carry passengers by coaches registered in an EU member state other than Poland. The simplification is designed for entities which do not deduct input tax, including VAT refunds to their bank account. It is a significant simplification compared to the current regulations. Under the new procedure, entities will be exempt from filing a VAT registration in accordance with the general terms. Instead, they will be registered as “VAT payers – occasional carriage of passengers”. They will also be exempt from the registration obligation referred to in Article 2.1 of the Tax Identification Number Act.
VAT rates
There will be a new VAT rate on clothing and clothing accessories for babies and on children’s footwear The rate will be raised from 8% to 23%. The change is the effect of judgement C-49/09 of Court of Justice of the European Communities which declared that applying a reduced VAT rate to supplies, import and intra-Community acquisition of clothing and footwear for babies and children was against the EU law. As a result of the change, items 76 and 77 were deleted from attachment No. 3 to the VAT Act.
Starting from 1 January, a 23% tax rate will be imposed on restoration and maintenance works and services provided by state budget institutions, which before were exempt from VAT. It is also likely that the tax rate on in-vitro medical products will be raised from 8% to 23%.
Coefficient
Starting from January 2012, taxpayers that deduct VAT using the coefficient specified in Article 90 of the VAT Act will be obliged to carry out an annual adjustment even if the difference between the initial coefficient and the final one does not exceed 2 p.p. (Article 91.1 of the VAT Act). Irrespective of the above, in the first tax return filed for 2012, in line with Article 90.10, if the coefficient exceeds 98% and the amount of non-deductible input tax resulting from the proportion, is less than PLN 500 a year, the taxpayer may assume that the proportion is 100%. Before, the law did not provide for a limitation with regard to the amount.
Limits
Starting from 1 January 2012, the total value of intra-community delivery of goods above which taxpayers will have to file recapitulative statements for individual months will be reduced. Until the end of 2011 the limit will be PLN 500 000; from 2012, PLN 250 000.
Small taxpayer
The current sales limit for small taxpayers will be raised from PLN 4 736 000 to PLN 5 324 000; and from PLN 179 000 to PLN 200 000 for agents. The change is the effect of the provisions of the act which stipulate that the limit for the small taxpayer is EUR 1 200 000 and for the agent, EUR 45 000; the amounts are translated at the average euro exchange rate published by the National Bank of Poland on the first business day of October of the preceding year, rounded to PLN 1 000 (3 October 2011 – PLN 4,437).
Legal basis:
- Article 1.20, 1.21 and 1.28 of the Act on changes to the VAT Act, Act on registration and identification of taxpayers and tax remitters and Act on carriage by road of 9 June 2011 (Journal of Laws No. 134, item 780, as amended);
- Article 1. 33d) and Article 8 of the Act on changes to the VAT Act and Measures Law of 18 March 2011 (Journal of Laws, No. 64, item 332);
- Article 4 of the Act on changes to the VAT Act of 23 October 2009 (Journal of Laws No. 195, item 1504);
- Articles 43, 44 and 45 of the Ordinance of the Minister of Finance on application of certain provisions of the VAT Act of 4 April 2011 (Journal of Laws No. 73, item 392);
- Article 2.25 of the VAT Act of 11 March 2004 (consolidated text, Journal of Laws 11.177.1054).
