Selected changes in the VAT
JPK_VAT implementation – the entry date 1 October 2020
Before October 2020 the Polish taxpayers had to submit to the tax authority mandatory two filings separately: VAT return and SAF-T file. As of 1 October 2020, the Polish taxpayers are obliged to submit JPK_V7M (monthly VAT reporting) or JPK_V7K (quarterly VAT reporting). The new method of the VAT reporting force the taxpayers to present to the tax authority additional information including special codes to identify the particular type of goods or services including special markings of documents and/or VAT procedures.
SLIM VAT Package – planning entry date 1 January 2021
The term SLIM VAT package (Simple, Local, and Modern) Value Added Tax will bring changes in the following fields:
- the sale invoice corrections „in minus” – no obligation to obtain confirmation of receipt of the invoice correction “in minus” from the purchaser,
- the sale invoice corrections „in-plus” – implementation to the VAT Act regulations specifying the method of settlement of the invoice correction „in plus”,
- a term to apply the 0% VAT rate on the advance payment in the export of goods, will be extended from 2 to 6 months,
- the taxpayer will be able to choose for VAT purposes the rules of currency conversion as for the income taxes,
- extending the deadline for the input tax deduction on an ongoing basis from 3 to 4 months,
- right of VAT deduction from invoices for the accommodation services which are purchased for resale,
- increasing the limit on the low-value gifts (a free-of-charge transfer) from PLN 10 to PLN 20.
Generalized reverse charge mechanism – planning entry date 1 January 2021
The Czech Republic, as the only EU Member State, will apply the generalized reverse charge mechanism (GRCM) to combat tax frauds.
Current reverse charge regulation applies only to the risky areas permitted by the existing EU law, such as the construction sector, selected IT product, precious metal trade.
The GRCM will be used for all domestic B2B transactions exceeding EUR 17 500, therefore, the customer will have to pay VAT and he is also entitled to VAT deduction and thus the GRCM makes it impossible to avoid paying VAT to the authorities. Due to the current situation regarding the spread of coronavirus, it is very questionable whether the planned deadline for the implementation of 1 January 2021 will be achieved.
Importation of consignments not exceeding EUR 22 in no longer VAT exempt.
Introduction of the “One Stop Shop” reporting to include distance selling of goods and B2C cross-border services between Czech and other EU countries.
VAT bad debt relief
The supplier may correct the tax base in case of total or partial non-payment after the supply of goods or services takes place when receivable due cannot be collected.
Simplification of VAT rules on distance deliveries of goods and certain supplies of services to non-taxable persons, such as
- place of supply of distance sales of goods is where the dispatch of goods ends,
- place of delivery for distance sales of goods and certain digital services in B2C transactions will be the place, where the dispatch of goods starts or where the service supplier has its registered seat, assuming that EU turnover for the calendar year (current and previous) does not exceed EUR 10 000 for the distance supply of goods or supply of services,
- voluntary special VAT regime for selected entities, simplification consists of the possibility of submission only one VAT return for all EU deliveries, excluding mandatory VAT registration.
Extension of the options for proving the export of goods outside the EU.
The importation of consignments from third countries not exceeding EUR 22 is no longer VAT exempt.
Grace period for the extended real-time reporting
As of 1 January 2021, the scope of invoices reported in real-time to the tax authorities will be expanded – for invoices issued to taxable persons on EU and non-EU transactions, for domestic invoices in B2C transactions, export and intra-Community supply of goods and services transactions, independently of the amount of VAT charged.
Introduction of the XSD 3.0 schema
Detailed reporting obligations forced tax authority to publish the updated XSD 3.0 schema including some adjustments, such as data privacy measures for B2C invoices. Due to the current COVID-19 situation, taxpayers are required to submit a new version of the XML file, nevertheless, failure to comply with this obligation shall not result in the imposition of a penalty.
Therefore, the authorities established a transitional period when taxpayers may use both the current XSD 2.0 and the new XSD 3.0 schema from 1 January 2021 to 31 March 2021. As a result, all the taxpayers will be required as of 1 April 2021 to use the updated schema and the previous version will be no longer valid. The online invoice 3.0 system and the related data reporting format will enable draft VAT returns, paper-free invoicing, and data security all at the same time.
Contact our tax experts if you have questions:
CEE VAT Compliance Director
VAT Compliance Manager