Slim VAT 3 – Changes in VAT Regulations Effective from July 1, 2023

On July 1, 2023, the third edition of the VAT package reform, known as Slim VAT (Simple Local And Modern VAT), came into effect. The introduced regulations primarily aim to simplify the process of VAT settlement for taxpayers. The most significant changes have been made to the VAT Act. Below are the key changes:

Increase in the Small Taxpayer Sales Threshold to EUR 2,000,000

The threshold for small taxpayers has been raised from EUR 1,200,000 to EUR 2,000,000 (including VAT). This change allows a larger number of taxpayers to use the cash accounting method and file quarterly VAT returns.

Clarification of Exchange Rate Application for Corrective Invoices Issued in Foreign Currency

When the taxable base, defined in a foreign currency, changes, the conversion into PLN must be done using the exchange rate of the foreign currency applied to the amounts used to determine the taxable base before the change (i.e., the original exchange rate). For example, if a taxpayer applied the exchange rate on August 1, 2023, for an initial delivery, the same rate must be applied when issuing a corrective invoice, regardless of the reason for the correction.

Clarification of the Period for Declaring Intra-Community Deliveries of Goods (ICD) When Documents are Received After 3 Months

If a taxpayer does not have documents confirming the intra-Community supply of goods (ICD) within the prescribed time, the transaction must be recorded as a domestic supply, taxed at the applicable VAT rate (e.g., 23%). Upon receiving the documents confirming the export of goods from Poland to another EU country, the taxpayer may adjust the VAT return and apply a 0% VAT rate. Under the previous regulations, the transaction should have been declared in the period when the delivery occurred. However, due to these changes, the taxpayer can now report the transaction in the period when the tax liability arose, thereby eliminating ambiguities present in the previous version of the regulation.

Waiver of the Requirement to Have an Invoice for Intra-Community Acquisitions of Goods (ICA) When Claiming Input VAT

Taxpayers making intra-Community acquisitions of goods (ICA) are no longer required to have an invoice to claim input VAT. It is sufficient to include the VAT due on ICA in the tax return for the relevant period and to ensure the acquisition is related to taxable activities. This change ensures that the input and output VAT for ICA are always settled in the same reporting period, without the need for an invoice. The consequence is VAT neutrality for ICA transactions.

Relaxation of Conditions for VAT Refunds Within 15 Days

Since January 1, 2022, taxpayers have been able to apply for an accelerated VAT refund within 15 days, provided they meet certain conditions. Following the introduction of the new regulations, some of these conditions have been modified, including a reduction in the minimum sales value recorded using cash registers in a given settlement period from PLN 50,000 to PLN 40,000.

Introduction of an Additional Opportunity for “Third Parties” to be Relieved from Solidary Liability

A new option has been introduced for taxpayers acquiring receivables (mainly factors). This applies in cases where the taxpayer acquiring the receivables changes (e.g., changing one factor for another).

Option to Opt-Out of the Obligation to Print Fiscal Documents for Transactions Using Cash Registers

This change allows taxpayers to issue and provide a fiscal receipt or invoice in electronic form, with the buyer’s consent, through an agreed method, including using the National Tax Administration (KAS) system. There is no need to provide the buyer’s personal details, thus enabling the issuance of digital fiscal receipts or invoices.

Linking VAT Penalty Amounts to the Cause of the Identified Irregularity

This change aims to eliminate situations where taxpayers who make minor or formal errors are treated the same as those involved in VAT fraud regarding penalties.