Shortened period of VAT refund and purchase through a bank loan

Service-Tax

When completing the tax return, the taxpayer who has a surplus of input tax has a choice of two ways to use it. The entrepreneur may request its return to the bank account or deduct it towards the next settlement period, reducing the amount of tax due for the next period by this difference. However, you must remember to fill in the correct item in the settlement declaration. It should not be forgotten that the shortened period of VAT refund requires additional conditions. Find out more about it!

VAT refund deadlines

The basic deadline for VAT refund is 60 days from the date of submission of the settlement declaration, regardless of the type of purchases made or the tax rate applied to the sale of goods or services. In addition, this term also includes persons - after submitting an appropriate application - providing services and deliveries of goods abroad. If the taxpayer for a given tax period (month or quarter) does not show any sales (even tax-free), but only purchases, in principle, he has the right to apply for a tax refund within 180 days.

However, if the taxpayer submits an appropriate application together with the declaration, he or she is entitled to a VAT refund within a shortened period, i.e. 25 days from the date of submission of the tax return.

In this case, it should be remembered that several conditions must be met:

  • the amounts of input tax shown in the tax declaration, excluding the amount of the transfer of the VAT surplus on purchases from the previous period, result from:

    • invoices documenting the amounts of receivables that have been fully paid via the taxpayer's bank account at a bank established in the country or the taxpayer's account at a cooperative savings and credit union of which he is a member, indicated in the identification application referred to in separate regulations,

    • invoices, other than those paid by bank transfer, documenting receivables, if the total amount of these receivables does not exceed PLN 15,000,

    • customs documents, import declaration and decisions referred to in art. 33 paragraph 2 and 3 and article. 34 and have been paid by the taxpayer,

    • import of goods accounted for in accordance with art. 33a, intra-Community acquisition of goods, the provision of services for which the taxpayer is their recipient, or the supply of goods for which the customer is the taxpayer, if the tax return shows the amount of tax due on these transactions,

  • the amount of input tax or the excess of input tax over due tax, not settled in previous accounting periods and shown in the declaration, does not exceed PLN 3,000,

  • the taxpayer submits documents confirming the payment of tax to the tax office via the taxpayer's bank account or the taxpayer's account at a cooperative savings and credit union,

  • the taxpayer for the next 12 months directly preceding the period for which the taxpayer applies for a refund within 25 days:

    • was registered as an active VAT taxpayer,

    • submitted declarations for each accounting period.

After meeting the above-mentioned conditions, the taxpayer may apply for a shortened period of VAT refund. The law provides for a period of 25 days from the date of submission of the declaration.

Art. 87 sec. 2 of the VAT Act:

If the legitimacy of the return requires additional verification, the head of the tax office may extend this period until the end of the verification of the taxpayer's settlement performed as part of verification activities, tax control, customs and tax control or tax proceedings.

Shortened VAT refund period and the purchase is financed with a bank loan

Additionally, the taxpayer must remember, pursuant to Art. 19 of the Entrepreneurs' Law Act that making or accepting payments related to the business activity performed takes place via the entrepreneur's payment account, in each case when:

  • a party to the transaction from which the payment results is another entrepreneur and

  • the one-off transaction value, regardless of the number of payments resulting therefrom, exceeds the equivalent of PLN 15,000, while transactions in foreign currencies are converted into zlotys at the average exchange rate of foreign currencies announced by the National Bank of Poland on the last business day preceding the transaction date.

Therefore, it should be emphasized that the legislator does not impose restrictions on the taxpayer in the form of purchasing from own funds. Therefore, a taxpayer, as a rule, may apply for the right to a VAT refund within a shortened period, even if the refund covers goods or services purchased thanks to a bank loan.