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Amendment to the provisions concerning adjustments in the importation of services


On September 7, 2021 an amendment to the Value Added Tax Act came into force, introducing, inter alia, changes regarding the moment of accounting for input tax on the import of services.

Regulations prior to amendment

According to the wording of the regulations prior to the amendment, the moment of reduction of the amount of the output tax by the amount of input tax on the import of services depended on the date, counting from the end of the month in which the tax obligation arose, the taxpayer took into account the amount of output tax with regard to a given service. Tax neutrality was assured to taxpayers by including the amount of output tax in the return in which they were obliged to settle the tax, no later than 3 months following the end of the month in which the tax liability arose. Otherwise, the taxpayer was obliged to incorporate input tax in the return submitted ‘au courant’, while the output tax was declared in the period when the tax liability arose

The legislator has provided analogous regulations for intra-Community acquisitions of goods.

Judgement of the CJEU of March 18, 2021 (case no. C-895/19)

The point of departure for the amendment of the regulations was the CJEU judgment of March 18, 2021 (Case No. C-895/19), in which the Court, ruling on the right to deduct VAT relating to intra-Community acquisitions, indicated that Polish regulations requiring taxpayers - in selected situations - to account for output and input VAT in settlements for different periods are inconsistent with the VAT Directive.

In the CJEU’s opinion, the right to deduct VAT must be exercised, as a rule, in the period in which the tax liability arose in output VAT. It guarantees tax neutrality – the taxable person does not bear the economic burden of the VAT.

Although the Court's ruling concerned intra-Community acquisitions of goods, the regulations on recognition of input tax on intra-Community acquisitions of goods and importation of services contained corresponding regulations. Therefore, the judgment should also be of importance to the importation of services.

Amendment of the regulations

Article 86(10i) of the VAT Act, on the basis of which taxpayers deducted VAT "in the ongoing periods", in the so-called "angle array", was repealed as of September 7, 2021. The wording of Article 86(10b)(3) has also changed, which in its current wording states that the right to deduct VAT in connection with the import of services arises in the settlement for the period in which a tax liability arose in relation to the services imported by the taxpayer.

The amendments confirm the position of the tax authorities and administrative courts, which has already been taken since the issuance of the CJEU judgment (e.g. ruling 0111-KDIB3-3.4012.278.2021.1.MS of August 30, 2021, judgment of the Voivodship Administrative Court in Warsaw of April 28 2021, docket number III SA/Wa 1897/19, and judgment of the Voivodship Administrative Court in Warsaw of April 22, 2021, docket number III SA/Wa 346/20). The right to deduct VAT on the import of services should be exercised in the period in which output VAT is reported, thus guaranteeing the neutrality of VAT for the taxpayer. Due to the amendment in question, there is no discrepancy between the VAT Directive and the provisions of national law as regards recognition of importation of services. 


Katarzyna Czerwińska-Sabała, Tax Consultant, ATA Tax Sp. z o.o.

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