VAT Friday: Poland SLIM VAT package-reporting corrections

On 1 January 2021, amendments known as the SLIM VAT (Simple, Local and Modern VAT) package were introduced to the Polish VAT Act. One of the most important changes concerns reporting correction invoices decreasing taxable base and the VAT amount.

Background:

Taxpayers were entitled to decrease VAT in their settlements if they disposed of a confirmation that the correction invoice was received by the buyer. In 2021 this condition has been abolished.

Based on the new regulations, the supplier is entitled to reduce the VAT taxable base if documentation is available confirming that the conditions under which such reduction should be made were agreed by supplier and buyer. The obligation of the buyer also changes. Up to 2021 the buyers was obliged to correct (reduce) the amount of input VAT once they received the correction invoice. Now the input VAT has to be reduced when the conditions agreed with the supplier are met.

Taxpayers may choose not to apply the new rules till the end of 2021. If such option is chosen, the former (2020) rules of reduction of the VAT taxable base should be used.

To Do:

New regulations require implementing appropriate business procedures which will ensure that the invoicing process and reporting of corrections reflect commercial arrangements with customers

If you have any questions, please contact one of the specialists of the Crowe Indirect Tax teams or email [email protected]