Cancellation of VAT declarations - a new SAF-T as a taxpayer control tool

Service-Tax

When registering for VAT, active VAT payers must take into account additional reporting obligations. Until September 30, 2020, active VAT taxpayers were required to prepare and submit to the Tax Office and the Ministry of Finance a VAT declaration and JPK_VAT file as separate documents. On the other hand, 2020 is a breakthrough period, because the VAT declaration has been liquidated, and the new JPK V7 submitted to the Ministry of Finance contains very detailed data not limited only to sales and purchases, which in turn is a big obstacle for micro and small entrepreneurs.

Cancellation of the VAT declaration - when did it take place?

The new SAF-T, which replaced the VAT-7 and VAT-7K declarations known to all active VAT payers, was introduced on October 1, 2020. This means that the liquidation of the VAT declaration took place from the settlement for October 2020.

The new JPK has replaced the VAT declaration and the JPK_VAT file

The new JPK was introduced together with the regulation of the Minister of Finance, Investment and Development on the detailed scope of data contained in tax declarations and records in the field of tax on goods and services. On the basis of the regulation, a template of the JPK scheme was additionally developed, which is available on the website of the Ministry of Finance. The new JPK replaced the existing JPK_VAT file and the VAT declaration. It has two structures depending on the period of VAT settlement:
- JPK-V7M - in the case of monthly VAT settlement (replaces the VAT-7 declaration),
- JPK-V7K - in the case of quarterly VAT settlements (replaces the VAT-7K declaration).

Moreover, in the brochure provided by the Ministry of Finance on the new JPK_VAT structure with the declaration, there is information that the liquidation of the VAT declaration does not apply to the declaration:

  • VAT-12 - for passenger taxicabs taxed with a flat rate,
  • VAT-8 and VAT-9M - for foreign transactions with non-VAT owners,
  • VAT-10 - concerning intra-Community acquisition of new means of transport,
  • VAT-14 - concerning intra-Community acquisition of motor fuels.

Corrections relating to previous months and the liquidation of VAT returns

In the course of business activity, there are situations in which it is necessary to correct the accounting entries made. Often, these corrections affect the amount of the tax liability due to VAT or relate to the formal content of the invoice, which was shown in the JPK_VAT file. The liquidation of the VAT declaration results in the simultaneous liquidation of the current JPK_VAT structure, because both the declaration and the JPK file have been fully replaced from October 1, 2020 with one new JPK-V7M or JPK-V7K file. From October 1, 2020, all active VAT payers are required to submit the JPK_V7M / JPK_V7K file in accordance with the new structure. If, after October 1, 2020, the entrepreneur is obliged to correct the VAT declaration or the JPK_VAT file for earlier periods, he shall do so "on the old rules”.

Example 1.

Mr. Łukasz is a small entrepreneur settling VAT for quarterly periods. In November 2020, he received a correction invoice reducing the value of the purchased goods, issued due to a billing error. The original invoice was entered in the VAT register of purchases in March 2020. How should Mr. Łukasz correct the entries to meet the reporting obligations?

Due to the fact that the reason for issuing the correcting invoice is a billing error, Mr. Łukasz is obliged to correct the accounting entries in the period of the original invoice. Despite the liquidation of the VAT declaration, he is obliged to submit a correction of the VAT-7K declaration for the first quarter of 2020 and to prepare a correction of the JPK_VAT file for March 2020, in accordance with the structure of the declaration and JPK applicable in this period.

Example 2.

Mr. Aleksander received a correction note from the buyer regarding the change of his address on the invoice issued by Mr. Aleksander. The note was issued in October 2020 and related to the sales invoice of July 2020. How should he include the note in the records?

The change of the buyer's address results in the obligation to correct his data shown in the JPK_VAT file for July 2020. The correcting note does not affect the amount of the tax liability, therefore Mr. Aleksander does not correct the VAT declaration. He should submit a correction of the JPK_VAT file generated "under the old rules", ie in accordance with the structure applicable at the time of issuing the sales invoice. In a situation where the entrepreneur receives from the head of the tax office a request to correct the detected irregularities in the new JPK sent by him, he has 14 days to submit a JPK_V7M / JPK_V7K correction or clarify the inaccuracies in the office. If, after this date, the taxpayer fails to do so, a fine of PLN 500 will be imposed on him for each error found. Start a free 30-day trial period with no strings attached!

Cancellation of VAT declarations and the advantages of introducing a new SAF-T

The legislator aims to tighten the tax system in Poland and prevent VAT fraud. The new JPK contains a lot of detailed information related to concluded transactions and introduces additional markings, e.g. individual groups of goods and services being the subject of the transaction. On the one hand, a new, new reporting obligation has been imposed on entrepreneurs, and on the other - accounting software providers are forced to adapt their systems again, which is associated with large financial outlays.

However, the Ministry of Finance points to a number of advantages brought by the liquidation of the VAT declaration and the replacement of the current JPK_VAT structure with a new JPK, including:

  • combining two reporting obligations - sending the VAT declaration and separately the JPK_VAT file - and replacing them with the obligation to send one JPK file in the new structure;
  • automatic verification of the correctness of VAT settlements without involving the taxpayer;
  • shortening the time of performing control activities;
  • simplification of settlements with the tax office;
  • reducing the number of documents processed in the IT systems of the National Tax Information.

Additionally, in the justification to the draft regulation introducing the new SAF-T structure, we read that:
“An additional simplification is the resignation from attaching attachments to tax returns. The new JPK_VAT will allow to replace the attachments with appropriate markings (the so-called check box) ”.

In summary, the introduction of a new SAF-T and the elimination of VAT returns reduced the number of reporting obligations for taxpayers. In addition, it is a tool for controlling the correctness of VAT settlements, and thus will contribute to the tightening of the tax system in Poland. The introduced changes, however, constitute an obstacle for entrepreneurs who had to adapt to subsequent new changes. In this case, a good warehouse management program may prove to be helpful (despite the fact that there is no obligation to run a warehouse among entrepreneurs who settle accounts with the KPiR or a lump sum on recorded revenues). This is related to the introduced, inter alia, additional sales and purchases markings, which are a mandatory element of the new SAF-T. Therefore, in order to meet the new requirements imposed by the legislator, the entrepreneur should choose a good and comprehensive program for accounting and invoicing, so as not to be exposed to possible sanctions for errors in SAF-T, often resulting from ignorance resulting from dynamically changing tax regulations.