Tax Alert (VAT) - September 1/2006 - Polonya

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Beginning from 16 August 2006, as per the Tax Code, large taxpayers (among others, those whose net revenues exceed the equivalent of EUR 5m) can file their tax returns electronically. The taxpayer or tax remitter who wishes to file tax declarations in that manner has to inform the tax office thereof on a paper fill-in notification form. Moreover, each person authorised to sign declarations is obliged to submit the relevant Declaration of Will electronically, on a special form. Then, the head of the tax office issues a certificate to confirm the right to electronic filing. Returns are submitted electronically and must contain electronic signatures. Taxpayers may choose from three available forms of electronic filing: via the Ministry of Finance portal: e-poltax.mf.gov.pl (returns are filed on-line), via an off-line application loaded from the MOF website (returns are prepared in advance and then signed and sent to the Ministry), or alternatively, through financial and accounting software (this solution can be used owing to the fact that the Ministry of Finance has published an open tax document standard as the appropriate XML). The system sends confirmations of receipt within approx. one hour from the moment of sending the return to the electronic mail address provided by the taxpayer. At present, the system accepts two types of returns: PIT-4 (for employers paying monthly PIT advances for their staff) and PIT-8A (lump-sum PIT declaration). According to the plans to extend the system, it will be possible to file VAT returns electronically as from October 2006. For details see: http://www.mf.gov.pl/index.php?wysw=2&sgl=2&dzial=661

 

On 24 July 2006 the European Union Council approved Directive 2006/69/WE amending Directive 77/388/EWG. The main objective of the Directive is to simplify the procedures arising under art. 27 of the 6th Directive and aiming to assist in counteracting tax evasion or avoidance. With the amendments incorporated, the 6th Directive provides the possibility for EU member states to impose an obligation to settle output tax by the acquirer (self-charge mechanism) in the situations listed in art. 20 section 4 paragraph 7 letter c of the 6th Directive (inter alia, in the case of supplies of construction work, real estates, or scrap metal). In addition, an option is introduced for EU member states to adopt measures in order to ensure that the taxable amount in respect of supply of goods and services will be the open market value (this option may also be exercised in the situations that are precisely defined in the 6th Directive). Until now such measures could be used only based on an individual authorisation issued by the Council pursuant to art. 27 of the 6th Directive. Before the effective date of the amending, directive member states were obliged to apply to the European Commission, which would examine the application and then forward it to the Council. The Council members had to consent unanimously to the authorisation and the entire procedure was very time-consuming. At present, the member states may introduce such instruments under the 6th Directive and without notifying the European Commission or obtaining the consent of the Council. Apart from the above, the amending Directive also introduces changes in the taxable amount of the value of exempt investment gold.

Beginning from 1 January 2007, the German VAT base rate will be increased from 16% to 19%. On 11 August 2006 the German tax authorities issued an explanatory note in this respect (BMF-Schreiben IV A 5-S-7210-23/06). The new tax rate will be applicable to supplies of goods and services executed after 31 December 2006. Please note that the physical performance of the supply or service rather than the invoice issuing contractual provisions or payment collection determines the application of the appropriate rate. Therefore, if prepayments are accepted in 2006 for services/supplies to be effected in 2007, the higher VAT rate will be applied. If the taxpayer issues an invoice for the prepayment with the old VAT rate, it may still add the tax underpayment in the final invoice or in a separate invoice. We recommend analysing the transactions on which German VAT must be paid. For long-term services, subject to business considerations, we suggest subdividing the services into stages to apply the lower rate to the services rendered in 2006. Please note that such arrangements must be followed by service receipt in 2006 and a separate payment. The taxpayers who intend to make investments in Germany ought to verify their contractual provisions regarding the prices and VAT due in Germany.

  

In the judgement of 7 September 2006, re. case C-166/05 (Heger), ECJ accepted a broad definition of services related to immovable property. ECJ acknowledges that the sale of fishing rights for certain stretches of river located in Austria should be perceived as a service related to immovable property and as such, it should be taxable in Austria. It should be noted that ECJ rejected the standpoint of the Advocate General who suggested a narrow interpretation of the notion of services linked with immovable property. According to the opinion of the Advocate General only the services aimed to modify the status of the immovable property, such as construction works or the services of architects, can be deemed the services related to immovable property. Our experience is that the Polish tax officials tend to construe the definition of services related to immovable property broadly.

   

If you have any questions concerning the changes presented in this publication, please contact one of the following VAT specialists at our Deloitte office in Poland:

  

Joanna Stawowska, Partner
Tel. (48 22) 511 08 49

Michał Kłosiński, Senior Manager
Tel. (48 22) 511 07 16

Krzysztof Hejduk, Senior Manager
Tel. (48 22) 511 07 40

Dominika Cabaj, Manager
Tel. (48 22) 511 08 68

Agnieszka Czarnecka, Manager
Tel. (48 22) 511 08 27

Aleksandra Pacowska-Brudło, Manager
Tel. (48 22) 511 08 38

Krzysztof Wilk, Manager
Tel. (48 22) 511 08 53