Loss of the possibility of quarterly VAT settlements - it's worth knowing

Service-Tax

Many entrepreneurs conducting business activity submit VAT-7K declarations, which are intended for quarterly VAT settlements, while taking advantage of several advantages that open up quarterly VAT settlements. From January 1, 2017. taxpayers other than small taxpayers can no longer submit quarterly VAT returns at all. How, then, to proceed in a situation when the possibility of quarterly VAT settlements is lost?

Selection of the quarterly method of VAT settlement

Small taxpayers who have chosen the cash method may submit tax returns for quarterly periods to the tax office by the 25th day of the month following each subsequent quarter.

A small taxpayer for VAT purposes in 2018 is an entity:

  1. in which the value of sales including VAT did not exceed PLN 5,176,000 in 2017,

  2. which runs a brokerage company, manages investment funds and alternative investment funds or is an agent, contractor or other person providing services of a similar nature, with the exception of a commission commission - if the amount of commission or other forms of remuneration for services rendered with VAT did not exceed the amount in 2017 PLN 194,000.

The limits are converted into PLN at the average EUR exchange rate announced by the National Bank of Poland on the first business day of October of the previous tax year.

Loss of the possibility of quarterly VAT settlements

As of January 1, 2017, the possibility of quarterly VAT settlements by taxpayers other than small taxpayers was abolished. This means that VAT-7K declarations for quarterly VAT settlements may be submitted by:

  1. only small taxpayers who chose the cash method,

  2. only small taxpayers who have not chosen the cash method, after prior written notification to the head of the tax office, not later than on the 25th day of the second month of the quarter for which the quarterly tax return will be submitted for the first time.

Small taxpayers, regardless of whether they have chosen the cash method, cannot submit quarterly VAT returns
if:

  1. have been registered by the head of the tax office as active VAT payers - for a period of 12 months starting from the month in which the registration was made or

  2. in a given quarter or in the four preceding quarters, they delivered sensitive goods (Annex 13 to the VAT Acts), which include, among others:

    1. pipes, pipelines, pipe fittings, plates, rods, angles, sections, other structures of aluminum, cast iron, steel,

    2. Cloth, grills, nets and fences, of iron, steel or copper wire; expanded mesh made of cast iron, steel or copper,

    3. Gasoline and heating fuels, diesel and lubricating oils,

    4. Animal and vegetable oils and fats,

    5. Emulsions for sensitizing surfaces for use in photography,

    6. Writing ink, drawing inks and other inks,

    7. plates, sheets, foils, strips and strips made of plastics,

    8. HDD and SSD hard drives,

    9. Digital cameras and digital cameras,

    10. Parts and accessories for photocopiers - cartridges and toners,

    11. Operating system software packages and utility programs on HDD and SSD drives,

    12. Other films and video recordings on disks, magnetic tapes, etc. on media - only SSDs

- unless the total value of these deliveries without the tax amount did not exceed, in any month of these periods, the amount of PLN 50,000.

How to proceed in a situation when the possibility of quarterly VAT settlements is lost?

Some taxpayers from January 1, 2017. lost the possibility of quarterly accounting for VAT using the VAT-7K declaration. If the taxpayer would like to switch from quarterly to monthly settlements, then he would have to submit an appropriate declaration using the VAT-R form to the competent tax office.

On the other hand, taxpayers who, in connection with the amendment to the VAT Act, have lost the possibility to submit quarterly VAT returns, do not have to submit any reports regarding the transition to monthly VAT settlements. To sum up, as a result of the change in regulations, no reports should be made if the right to quarterly VAT settlements has been lost from January 1, 2017.

A situation in which the taxpayer again meets the conditions to be included in the quarterly VAT settlement

If a taxpayer meets the requirements of a small taxpayer again, taking into account the aforementioned conditions, he may return to quarterly VAT settlements. For this purpose, he should make an appropriate notification using the VAT-R form to the competent tax office no later than by the 25th day of the second month in the quarter, which will already be settled by the quarterly VAT settlement.