When and can a private person be a VAT payer?

Service-Tax

Many people who do not run a business did not think that they might be obliged to register as a VAT taxpayer despite the fact that they do not have a registered company. In addition, due to the obligation to register for VAT, a private person will be required to perform, inter alia, such activities as: issuing invoices with the assigned tax identification number or keeping VAT registers. Under what circumstances will there be an obligation to register for VAT? Can a private person be a VAT payer? We answer in the article!

Definition of a taxpayer and business activity under the VAT Act

Pursuant to Art. 15 sec. 1 of the VAT Act, taxpayers are legal persons, organizational units without legal personality and natural persons who independently carry out economic activity, regardless of the purpose or result of such activity.

On the other hand, the legislator defined economic activity as all activities of producers, traders or service providers, including entities acquiring natural resources and farmers, as well as activities of freelancers. In addition, in this definition, it indicated that economic activity includes, in particular, activities consisting in the use of goods or intangible assets on a continuous basis for commercial purposes. It should be emphasized that this definition differs from the definition of economic activity contained in the Act on Entrepreneurs' Law -economic activity is organized gainful activity, performed on one's own behalf andcontinuously. As can be seen in the provisions of the VAT Act, it additionally covers all activities based on the use of intangible goods and assets.

What is not an economic activity in the light of the VAT Act?

The following are not considered independent economic activities:

  1. revenues from a business relationship, employment relationship, cooperative employment relationship and homework (except for the value of raw materials and auxiliary materials provided by these persons and the reimbursement of costs incurred by them for transport, energy, fuel, maintenance of machinery and equipment, etc., if the person , for the benefit of which the outwork is performed, it pays the amount due under these titles in a separate item.),

    1. an employee within the meaning of the Act is a person who is in a business relationship, employment relationship, contract work or a cooperative employment relationship,
  2. monetary value of benefits in kind due to employees under separate regulations,

  3. monetary value of the gratuitous benefit due to the employee for the use of a company car for private purposes,

  4. monetary values ​​of other free benefits or partially paid benefits,

  5. income from membership in an agricultural production cooperative or other cooperative engaged in agricultural production,

  6. income from personally performed artistic, literary, scientific, coaching, educational and journalistic activities, including participation in competitions in the field of science, culture and art and journalism, as well as income from practicing sports, sports scholarships awarded on the basis of separate regulations and income judges for running sports competitions,

  7. income from the activities of clergy, obtained on account other than an employment contract,

  8. revenues from the activities of Polish arbitrators participating in arbitration proceedings with foreign partners,

  9. revenues received by persons performing activities related to the performance of social or civic duties, regardless of the method of appointing these persons, including compensation for lost earnings, with the exception of the revenues referred to in point 7,

  10. revenues of persons to whom a state or local government authority or administration, a court or a public prosecutor, on the basis of relevant provisions, commissioned the performance of specific activities, in particular the revenues of experts in court, investigative and administrative proceedings as well as payers and collectors of public law receivables, as well as revenues from participation in committees appointed by state or local government authorities or administration, with the exception of revenues,

  11. revenues received by persons belonging to management boards, supervisory boards, committees or other bodies constituting legal persons, regardless of the method of their appointment,

  12. revenues received by members of the National Media Council,

  13. revenues from the provision of services, on the basis of a contract of mandate or a contract for specific work, obtained only from:

    1. a natural person conducting business activity, a legal person and its organizational unit as well as an organizational unit without legal personality,

    2. the owner (holder) of the real estate in which the premises are rented, or the manager or administrator acting on his behalf - if the taxpayer performs these services only for the purposes related to the real estate,

- with the exception of revenues obtained on the basis of contracts concluded as part of non-agricultural business activities conducted by the taxpayer and revenues,

  1. revenues obtained on the basis of enterprise management contracts, managerial contracts or contracts of a similar nature, including revenues from this type of contracts concluded as part of non-agricultural business activities conducted by the taxpayer.

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Can a private person be a VAT payer?

On the basis of the above analysis, it turns out that a private person who does not run a business (who is not an entrepreneur), but performs activities that meet the definition of economic activity under the VAT Act, may be an active VAT payer. The above-mentioned types of revenues, which are not included in VAT, are an exception.

It is worth emphasizing that if the revenues from sales conducted by a private person (not subject to VAT exemption) exceed the limit of the subjective VAT exemption, which for 2018 amounts to PLN 200,000. PLN, then this person will be obliged to register using the VAT-R form as a VAT taxpayer, before making another sale transaction causing the above limit to be exceeded in a given month. However, before submitting a VAT-R, he must obtain a tax identification number.

Private person and tax identification number

Gone are the days when every private person had a tax identification number. Currently, if a natural person does not register a business, he will not receive a tax identification number without submitting the relevant documents. A private person who wants or is obliged to register as a VAT payer must first obtain a tax identification number. Legislator for people:

  • who are not entrepreneurs:
    • self-employed or
    • subject to registration as taxpayers of tax on goods and services or being registered taxpayers of tax on goods and services, or
    • who are tax payers, or
    • being payers of social security and health insurance contributions, or
    • not included in the PESEL register,
  • who are entrepreneurs conducting independent economic activity in the field of activity to which the provisions of the Act on the freedom of economic activity do not apply.

- made available the possibility of obtaining a NIP number by submitting the NIP-7 form as an application for assigning a NIP number.

It follows from the above that, inter alia, persons running a business but not being entrepreneurs within the meaning of the Freedom of Economic Activity Act (private persons) who are registered as VAT payers are required to submit the NIP-7 form for the purpose of obtaining a NIP number.

Both VAT-R and NIP-7 are submitted to the tax office competent for your home address.

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Obligations of a VAT sheep as a private person running a business

A private person running a business under the VAT Act, who is an active VAT taxpayer, is obliged to issue sales invoices with their own name and surname as well as the assigned tax identification number.

In addition, it is obliged to keep VAT records of purchases and sales and to submit a VAT-7 declaration and JPK_VAT as an entrepreneur by the 25th day of the following month after the month of sale. The same as with the entrepreneur, also within the deadline for submitting the declaration, he is obliged to pay VAT, if there is one.