Transfer from the register of an active VAT payer

Service-Tax

Entrepreneurs who are active VAT taxpayers who again began to meet the conditions for being covered by the subjective exemption and wanted to be covered by the exemption, then submitted an application implying that they would remain in the VAT register but with the status of an exempt taxpayer. By the end of 2016 this situation was the only one that resulted in the transfer of an active VAT payer from the register of active VAT payers to those exempt from VAT. In the following article, new conditions for the transfer from the register of an active VAT payer to the register of an exempt taxpayer.

Transfer from the register of the active VAT payer to the register of exempt taxpayers by the end of 2016.

Until the end of 2016, pursuant to Art. 96 sec. 10 of the VAT Act, taxpayers who were registered as active VAT payers and at the same time:

  1. achieved a sales value lower than that specified in Art. 113 paragraph. 1, i.e. 200,000 zloty. or

  2. began to perform sales only exempt under Art. 43 of the VAT Act,

- and wanted to take advantage of the subjective or objective VAT exemption again, then they submitted an update notification using the VAT-R form to the competent tax office, which resulted in remaining in the VAT register as an exempt taxpayer.

Until the end of 2016, these were the only cases in which the tax status of a company that was an active VAT payer was changed to a taxpayer exempt from VAT.

Conditions for re-using the VAT exemption

If the above basic conditions for returning to VAT exemption are met, the taxpayer may do so after 12 months at the earliest, which should be counted:

  1. from the end of the year in which the taxpayer lost the right to VAT exemption or resigned from it voluntarily,

  2. from the beginning of the year being the previous tax year, in which it achieved a sales value of less than 200 thousand. zloty.

New situations of transferring active VAT payers to the register of exempt taxpayers

According to the amended art. 96 of the VAT Act from January 1, 2017. in addition to the above situations of transferring active VAT payers to the register of exempt VAT payers, a situation has been added in which the deletion from the register of active VAT payers of entities that:

  1. started performing the sale only exempt or

  2. made a notification that they will only conduct sales that are exempt in accordance with Art. 43 of the VAT Act

- and leaving them in the register of taxpayers exempt from VAT will take place in a situation where:

  1. the taxpayer shows in the submitted VAT declarations for 6 consecutive months or 2 consecutive quarters only the sale exempt pursuant to art. 43 of the VAT Act and

  1. has not submitted an update application using the VAT-R form to the competent tax office,

However, pursuant to Art. 96 sec. 10b of the VAT Act, the discussed situation does not apply if the taxpayer, as a result of the submitted explanations in connection with the circumstances indicated above, proves that the lack of sales other than tax-exempt in the declarations is related to the specificity of the business activity conducted, and not to the cessation of the sale of another than exempt from tax.

In the above situation, the head of the tax office may restore the taxpayer to the register of active VAT taxpayers without the need to submit a registration declaration, if the taxpayer proves that the lack of sales other than tax-exempted in the declarations is related to the specificity of business activity, and not the cessation of sales other than exempt from tax.

Correction of the deducted VAT

Returning to the exemption from VAT is associated with a change in the intended use of both assets and components
and goods, materials in stock, which will be associated with the correction of previously deducted VAT:

  1. in the case of assets other than real estate, for a period of 5 years starting from the year of the change of purpose,

  2. in the case of other assets that are real estate, for a period of 10 years starting from the year of the change of purpose,

  3. in the case of goods, materials in the settlement for the period in which the re-use of the VAT exemption occurred.