Issue of VAT invoices - now and in the future

Service-Tax

Due to the amendment to the provisions of the Value Added Tax Act, 2014 will be associated with significant changes in issuing invoices. They will mainly concern the dates of issuing documents and the periods in which VAT will have to be settled on invoices. Therefore, it is worth getting acquainted with the changes that will affect the issuance of VAT invoices in order to be able to properly prepare for them.

Dates of VAT settlement from invoices

According to the current regulations, VAT on an invoice should be settled in the period (month or quarter) of the date of issue of the document. For example, if the invoice was issued on October 10, the VAT on it should be settled in October or in the declaration for the fourth quarter. Similarly, VAT is settled on the purchase invoice, but in accordance with the date of its receipt. The exception here are purchases of, for example, utilities, which are settled according to the payment date.

On January 1, 2014, the above-mentioned the rules will change. As a general rule, the VAT on the sales invoice will have to be paid on the date of sale, i.e. the performance of the service or delivery of the goods. Of course, there will be exceptions to this rule, e.g. in the case of construction services, rental, lease or leasing, the date of VAT settlement will be the date of issuing the invoice or the expiry of the deadline for issuing it.

As a result, it will be possible to deduct the tax on goods and services from the purchase invoice on the date on which the tax obligation arises with the seller, but not earlier than on the date of receipt of the invoice. Accordingly, it will be necessary to track both dates in order for VAT to be cleared in a timely manner.

Deadlines for issuing invoices

With the introduction of the amended provisions of the VAT Act, the role of the invoice and the deadlines for issuing such documents will change.

By the end of 2013, the invoice should be issued within 7 days from the date of delivery of the goods, performance of the service or receipt of payment. This principle is described in the VAT Act and in the regulation on issuing invoices. However, it does not apply to a few exceptions:

  • continuous sales, e.g. utility supply - the invoice is issued within 7 days from the end of the billing period,
  • collective invoices that document several deliveries for one customer in one month - the invoice is issued no later than the last day of the month in which the sale took place,
  • invoices for EU customers - the invoice is issued by the 15th day of the month following the month in which the sale took place.

With the new year, the dates of issuing invoices will change. The 7-day rule will cease to apply and will be replaced by the rule of issuing invoices by the 15th day of the month following the month in which the sale or receipt of the payment took place.

Earlier issuing of VAT invoices

In art. 106i paragraph. 7 of the VAT Act, situations where an invoice may be issued up to 30 days before:

  • "Delivery of goods or performance of a service", except for deliveries and provided services described in Art. 19a paragraph. 3, 4 and sec. 5 point 4 of the VAT Act (e.g. utilities), if the invoice contains information about the settlement period it relates to - then it can be issued earlier than for the indicated 30 days,
  • "Receipt, prior to the delivery of goods or services, of all or part of the payment".

In summary, if the taxpayer knows the future date of the sale transaction not exceeding the statutory 30 days, he may issue an invoice earlier.

Advance invoices

Par. 10 (1) of the currently binding invoicing regulation indicates that if the payment was received in full or in part before the goods were released or the service was provided, the invoice should be issued no later than 7 days from the date of its receipt.

However, after introducing the changes on 1 January 2014, this time will be extended. Art. 106i sec. 2 of the VAT Act says that if the payment was received in full or in part before the delivery of the goods or the service, the invoice should be issued no later than on the 15th day of the month following the month in which the whole or part of the payment was received.

If the advance payment was agreed by the parties, it is possible to issue an invoice before receiving it. However, such an invoice cannot be issued earlier than 30 days before the date of receipt of all or part of the payment.

However, there are cases where, despite the fact that the advance payment has been received, there is no obligation to issue an invoice. These exceptions are set out in Art. 19a paragraph. 5 point 4: and apply to:

  • "Supply of electricity, heat or cooling as well as line gas,
  • provision of services:
  • telecommunications and radiocommunication,
  • listed in item 140-153, 174 and 175 of Annex 3 to the Act,
  • rental, lease, leasing or services of a similar nature,
  • protection of persons and services of security, supervision and storage of property,
  • permanent legal and office services,
  • distribution of electricity, heat or cooling and line gas
  • with the exception of services to which Art. 28b, constituting the import of services. "

Special cases of invoicing

The legislator provided for several exceptions to the general rule:

  • provision of construction or construction and assembly services - then the invoice should be issued no later than 30 days from the date of service provision,
  • delivery of printed books, newspapers, magazines, printed magazines, with the exception of maps and leaflets - the invoice should be issued no later than 60 days from performance, and if the contract provides for settlement of the returns of publications - the invoice should be issued no later than 120 days from the first day goods release,
  • activities consisting in printing books, newspapers and magazines, with the exception of maps and leaflets - the invoice should be issued no later than 90 days from execution.

A special case is also the packaging that was not returned by the buyer, which he received when purchasing goods in returnable packaging. Then the invoice is issued no later than:

  • 7 days from the date of returning the packaging, which was specified in the contract,
  • 60 days from the date of delivery of the packaging, if the contract does not specify the date of returning the packaging.

As it turns out, 2014 is the year of fundamental changes in the field of tax on goods and services. On the one hand, taxpayers will be relieved of the burden and will have time to issue VAT invoices, while on the other hand, many risks await them, which may arouse controversy until they get used to the new regulations.