KPMG reports on a couple of interesting changes in the Polish VAT rules per April 1. I found it striking that the Polish authorities reiterated that on a reverse charge the input tax is only recoverable if the connected output tax is reported in the same tax period.
Also, a reverse charge for domestic supplies no longer applies when the non-resident seller is VAT registered in Poland. This is a nice one. I will show you the difference with the old rules. Take the example where a U.S. company imports goods into Poland, stores them in a warehouse and subsequently sells them to a Polish business.
Import VAT is due at 23%. On the local sale the VAT was reverse-charged, so no output VAT was payable. The U.S. company was stuck with the 23% import VAT, and had to file a tedious 13th Directive reclaim to get the import VAT refunded. A cash flow matter at best, and a lost cause at worst.
Under the new rules the U.S. company can register for VAT, file VAT returns and offset the paid import VAT against the VAT due on the local sales. No significant cash flow disadvantage, and no risk that the refund request will be rejected.
Wish Italy would do the same.
This, and more in the pdf below.