Amendment to the VAT Act - the most important facts
The amendment to the VAT Act, which regulates the issues related to taxes on goods and services, which comes into force on 1 January 2014, will have a significant impact on the rules of issuing invoices. The changes are to be significant - a document without the mandatory elements specified by the amendment will not be formally an invoice.
Amendment to the VAT Act - what data will be mandatory?
Until now, the formal rules for creating invoices have not been regulated by the VAT Act. The binding standards had to be found in the Regulation of the Minister of Finance of March 28, 2011 on tax refunds to certain taxpayers, issuing invoices, their storage and the list of goods and services to which VAT exemption does not apply.
The regulations in force from next year clearly and precisely describe the structure of a fully-fledged invoice. Article 2 of the VAT Act in point 31 states that an invoice is a paper or electronic document containing data provided for by the act and regulations based on it. The next point of the article defines an electronic invoice: it is an invoice issued and received in any electronic form.
Here is a list of mandatory information that each invoice must have, pursuant to Art. 106e paragraph. 1:
- exact date of issue,
- a sequential number assigned within one or more series that uniquely identifies the invoice,
- names and surnames (or names) and addresses of the taxpayer and the buyer of products / services,
- NIM number of the taxpayer and buyer,
- date of service / delivery or receipt of payment (if it is different from the invoice issue date),
- name (type) of goods or services,
- scope of services provided or quantity / number / measure of delivered products,
- unit net price (excluding VAT) of goods / services,
- amounts of reductions / discounts - including rebates related to early payment (if not included in the net unit price),
- net value of goods sold / provided services covered by the transaction,
- tax rate,
- the sum of the net transaction value, detailing sales subject to specific VAT rates and tax-exempt,
- VAT amount on the sum of the net transaction value, detailing the amounts related to specific tax amounts,
- total amount of money owed.
Section 1 of Article 106e of the Act in the following sections also specifies additional information that is mandatory for invoices issued in specific situations. We are talking here, among others on the entry "cash method", which should appear on the invoices of a small taxpayer who settles this method, and a note on self-billing if the invoice is issued by the buyer with the consent of the seller.
The act regulates the issues of what should not be included in the invoice, and also lists data that may not (in certain cases) be included in the document. As for the first matter, the applicable provisions can be found in Article 106e para. 4 - the legislator mentions three situations there:
when the buyer of the goods / service recipient is obliged to settle VAT. Then the seller / service provider on the invoice issued by him should not specify: the tax rate, the sum of the net transaction value with the specification of sales subject to certain VAT rates and tax-exempt, and the VAT amount on the sum of the net transaction value, distinguishing amounts related to specific tax amounts;
when a legal person, an organizational unit without legal personality, a natural person who is not a taxpayer - performs the occasional intra-Community supply of new means of transport. Then the invoice should not include the tax identification number;
when the taxpayer is required to issue an invoice (at the request of the buyer / recipient) in the case of a transaction exempt from VAT pursuant to Article 43 par. 1, 113 sec. 1 and 9 or regulations issued on the basis of article 82 par. 3. Then the invoice should not include: the tax rate, the sum of the net transaction value, specifying sales subject to specific VAT rates and tax-exempt, and the VAT amount on the sum of the net transaction value, specifying amounts relating to specific tax amounts.
Entries that in certain situations do not have to (but can) be included in the invoice can be found in Article 106e para. 5. Identical to the regulations described above, here also the legislator distinguished three cases:
when the taxpayer has a registered office / permanent place of business in Poland and provides goods / services in the area of another EU country. Then the invoice does not need to include: the amounts of reductions / discounts - including discounts related to early payment (if not included in the net unit price), the tax rate, the sum of the net transaction value, detailing sales subject to specific VAT rates and tax-exempt, and the amount of VAT on the sum of the net transaction value, distinguishing between amounts related to specific amounts of tax;
when the taxpayer sells goods / provides services to recipients in non-EU countries. In such a situation, the following are not necessary on the invoice: NIP (tax identification number) of the buyer of the goods / recipient of services, the tax rate, the sum of the net transaction value with the specification of sales subject to specific VAT rates and tax-exempt, and the VAT amount on the sum of the net transaction value with the distinction of amounts related to specific amounts of tax ;
when it comes to the so-called simplified invoices (purchases up to EUR 100 or PLN 450). Such documents may not contain: personal data and address of the buyer, scope of services / measure and quantity of goods, unit price and net value of goods / services, tax rate, total net transaction value, detailing sales subject to specific VAT rates and tax-exempt, and VAT amounts on the sum of the net transaction value, distinguishing between amounts related to specific amounts of tax.
Invoice without mandatory data
A document that does not contain all the mandatory data will not be considered an invoice. This means that drawing up such an incomplete document does not equal issuing a full invoice. However, it is worth noting that the seller will still be obliged to pay VAT on the sale, even though the invoice has not been issued in accordance with the regulations. The amendment significantly changes the moment when the tax obligation arises - from January 1, 2014, in accordance with Art. 19a paragraph. 1, it depends on the delivery of goods or the performance of the service. Therefore, in this respect, the fact that the sale was not actually documented with a correctly issued invoice is irrelevant for the purposes of the tax obligation.
On the other hand, the recipient can deduct input tax at the time when the tax obligation arises on the supplier's side and when he receives an invoice. In this situation, the sales document is much more important. If the buyer receives an invoice that is incorrect under the provisions of the law, he may require him to issue a new, correct document.
The amendment to the VAT Act also significantly changes the deadlines for issuing invoices. First of all, the invoice is issued no later than on the 15th day of the month following the month in which the goods were delivered or the service was performed. The provisions of Article 106i para. 6 pts 1 stipulate that the seller must issue an invoice at the customer's request also at the same time - if the request for an invoice was submitted by the end of the month in which the goods were delivered / service performed / advance payment was received. If, however, the request for an invoice was submitted after one month (from the delivery of the goods, the performance of the service) - the invoice should be issued no later than on the 15th day from the date of submitting the request. On the other hand, the seller is not obliged to fulfill the customer's request after three months from the delivery of goods / provision of services - he can only do so voluntarily.
After the amendment to the VAT Act enters into force, taxpayers will have to pay more attention to two fundamental issues: the correctness of the invoice in the light of the new regulations and the moment when the tax obligation arises on the seller's side. It is worth remembering that an incorrectly constructed invoice will not release the supplier of goods / services from the tax obligation, but it will be an obstacle for the buyer when deducting VAT.