VAT (part 12) - registration and registration obligations, part AND
Pursuant to Art. 15 sec. 1 of the VAT Act, VAT payers are legal persons, organizational units without legal personality and natural persons performing independent economic activity, regardless of the purpose or result of this activity. VAT taxpayers, both active and exempt, have a number of registration and record-keeping obligations, which we will try to present in the next part of the series of articles on VAT.
Registration for VAT purposes
Registration application for domestic transactions
Not all entrepreneurs are required to register as VAT payers. Some of them are exempt, which can be canceled at any time, and others, due to various reasons, are required to register. It applies in particular to taxpayers who intend to sell goods or services from a strictly defined group or who will exceed the statutory limit of the value of sales not exempt from VAT (PLN 150,000 in the previous tax year).
It is primarily taxpayers who perform one of the following activities that are required to register for VAT purposes:
- sale of metals made of precious products or with the participation of these metals,
- sale of goods subject to excise duty,
- sale of new means of transport,
- sale of construction and development areas,
- providing legal and advisory services,
- providing jewelery services.
Persons who start their business and decide to use the subjective exemption are not required to submit any declarations informing the tax office about the exemption selected.
In the case of taxpayers who commence activities subject to VAT, registration for VAT purposes should be made prior to the performance of the first activity not subject to VAT exemption. However, if the limit is exceeded, the relevant notification should be made before the first sale for the amount exceeding the limit. It is connected with the necessity of keeping an accurate sales register and controlling the transactions made.
An entrepreneur who voluntarily resigns from the exemption should register before the beginning of the month from which he wants to be a VAT payer.
In each case, registration is made using the VAT-R form, which is submitted to the appropriate tax office. The tax authority then confirms the registration using the VAT-5 form.
In the registration form, VAT taxpayers provide a number of important information, such as:
- whether they will be exempt or active taxpayers,
- whether they will use the status of a "small taxpayer" and settle with the cash method,
- whether they will submit declarations for quarterly or monthly periods,
- whether they will carry out intra-Community goods transactions.
Due to the fact that the moment when the taxpayer becomes an active VAT payer is not specified in the regulations, it is assumed that it takes place at the time of submitting the VAT-R declaration.
Please note that registration for VAT purposes is not irrevocable, but has long-term consequences. This applies to entrepreneurs who have exceeded the limit or have voluntarily resigned from the exemption. In this case, it is possible to use it again, but only after the full calendar year of functioning as a VAT payer. Additionally, two conditions must be met:
- running a business subject to VAT exemption,
- not exceeding the sales value limit of PLN 150,000 in the previous tax year.
The VAT-R form is also used to return to the exemption. It is worth noting that for a given tax year, this should be done by January 7. If this condition is not met, the necessity to pay tax on goods and services will apply for the next calendar year.
Registration application for EU VAT
Taxpayers who intend to make intra-Community acquisition of goods, intra-Community sale of goods or purchase services that are contained in art. 28b of the VAT Act (if they constitute an import of services) and provide services for which entities from EU countries are obliged to settle the tax, are required to notify the relevant tax office.
Such notification is submitted on the same VAT-R form that appeared during registration for VAT purposes in the case of domestic transactions. Such registration results in granting the taxpayer the status of an EU VAT taxpayer, which is confirmed by the head of the tax office on the VAT-5UE form.
Declarations and summary information
When submitting the registration form, the taxpayer informs the competent tax office about the periods in which he will settle VAT. There are two options - monthly or quarterly billing. The vast majority of entrepreneurs choose the first option. Such a decision is connected with the fact that by the 25th of each month following each subsequent month, the taxpayer is obliged to submit a declaration and settle any receivables towards the tax office.
The declaration appropriate for the monthly VAT settlement is VAT-7, which must be submitted monthly, regardless of whether the entrepreneur has a tax obligation or not (excluding the period of suspension of activity with some exceptions).
As mentioned earlier, the VAT Act also provides for the possibility of quarterly VAT settlements. In this case, the relevant declaration is VAT-7K, which is submitted by the 25th day of the month following each subsequent quarter.
Only taxpayers belonging to one of the strictly defined categories can use quarterly settlements:
- small taxpayers who chose the cash settlement method,
- small taxpayers who did not choose the cash method, but chose quarterly tax settlements, notifying the tax office of this intention,
- taxpayers who are not small taxpayers who chose the quarterly method of settlements provided that the tax office is notified of this intention,
- farmers who resigned from the status of a flat-rate farmer and notified the tax office of their intention to settle accounts for quarterly periods.
A special type of declaration for value added tax is the summary information, which consists of intra-Community transactions. Only entrepreneurs who trade with entities from other European Union countries (registered as EU VAT taxpayers) are obliged to deliver them to the tax office. Such transactions include:
- intra-Community supply of goods for value added tax payers or non-taxable legal persons identified for the purposes of value added tax,
- intra-Community acquisition of goods from value added tax payers, identified for the purposes of value added tax,
- delivery of goods in accordance with the simplified procedure for triangular transactions for VAT payers or non-taxable legal persons identified for the purposes of value added tax,
- provision of services to which Art. 28B, for value added tax payers or legal persons who are not such taxpayers, identified for the purposes of value added tax, provided in the territory of a Member State other than the territory of the country, other than exempt from value added tax or taxed at the rate of 0%, for which the recipient is liable to pay the value added tax.
The legislator also provided for the possibility of submitting summary information for quarterly periods by the 15th day of the month following the quarter in which the tax obligation arose on account of the transactions made:
- Intra-Community supply if in any of the four previous quarters the total value of the intra-Community supply transaction did not exceed PLN 250,000 and the total value of transactions in the first and second month of the quarter did not exceed PLN 250,000;
- WNT if the total value of transactions in the first and second month of a quarter did not exceed PLN 50,000;
- supply of taxable services in the buyer's country (no limit).
If the limit is exceeded in the 3rd month of a given quarter, it is still allowed to submit a quarterly declaration for this period, but from the next month the entrepreneur will be obliged to submit the declaration on a monthly basis.
Summary information is submitted for monthly periods, by the 15th day of the month following the month in which the tax obligation for the transactions was made. The exception is when the summary information is submitted by means of electronic communication. In such a case, they should be submitted by the 25th day of the month following the month or quarter in which the tax obligation for the transactions was made.
Entrepreneur registered as the so-called an active VAT payer is required to keep a sales record (so-called sales register) in order to correctly determine the amount of tax due resulting from the sale. The amounts shown on the basis of the issued original sales invoices, corrective invoices, internal invoices or on the basis of reports from the cash register are entered into this register.
Such records should contain all the information that enables the correct preparation of the VAT declaration. Most often they include:
- sequential number in the records,
- date of invoice,
- invoice number,
- name and address of the buyer and tax identification number,
- gross sales value,
- the amount of tax due,
- VAT rates.
Active VAT taxpayers must therefore conduct the so-called full sales and purchase records for the purposes of settling tax on goods and services. The provisions of the VAT Act do not impose any specific form of keeping records. It is only important that it contains all the elements that have been listed, as well as other data that are necessary for the correct completion of the VAT declaration.
The situation is different in the case of entrepreneurs selling to natural persons who do not have economic activity or flat-rate farmers who are obliged to record such events with the use of a cash register. Here, the provisions of the act and executive regulations precisely define the requirements to be met by this particular sales register.
Taxpayers benefiting from the VAT exemption are also required to keep sales records. In their case, however, the so-called simplified register, which includes information on the amount of sales on a given day. Entrepreneurs have until the next day to enter their data, but before the sale begins. Such records allow you to keep track of the turnover, and thus the moment until which you can benefit from the VAT exemption.