VAT regulations - significant changes for financial institutions

Analysis

VAT regulations - significant changes for financial institutions

Bill of amendments to the VAT Act

Tax Alert 20/2016 | 26 September 2016

A bill of amendments to the VAT Act has been announced on the website of the Government Centre for Legislation. The proposed changes include solutions aimed to improve VAT collection.

Repeal of Article 43.13 of the VAT Act

From the perspective of financial institutions, the repeal of Article 43.13 of the VAT Act is one of the key changes included in the bill.

Currently a number of support activities performed for the benefit of financial institutions can be exempted from VAT in line with Article 43.13. Considering the intended repeal of that provision, the scope of the exemption granted in respect of services supporting the activities of banks, leasing companies and other financial institutions may be heavily restricted and will need to be redefined. 

Repealing Article 43.13 of the VAT Act was taken into consideration several times in the past, but today removal of the provision in question seems fairly likely.

Comeback of VAT sanctions

The bill also introduces the so-called obligatory VAT sanction if the taxpayer understates its tax obligation / overstates the VAT refund.  The amount of the additional sanction will be determined by tax authorities and tax control authorities ex officio and will equal 35% of the value of the understated obligation.

According to legislative plans, the bill will become the binding law on 01 January 2017. 

Its full version can be found here:
http://legislacja.rcl.gov.pl/docs//2/12290205/12380434/12380435/dokument246209.pdf (in Polish)

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