Tax refund - what are the statutory deadlines?

Service-Tax

Each taxpayer who has achieved even a zloty of profit in a given tax year is required to submit an annual PIT declaration. Additionally, entrepreneurs registered as active VAT payers are required to settle VAT. Most consider settlements with the tax office as an unpleasant obligation, but in some cases the taxpayer may obtain a tax refund. After submitting a declaration that shows the overpayment, entrepreneurs would certainly like to receive cash as soon as possible. Check how long it takes to get your income tax and VAT refunded!

Income tax return

Income tax is a compulsory payment for taxpayers who earn income. In Poland, there are personal income tax and corporate income tax, and the issues related to these taxes are regulated by two separate acts, respectively - the PIT Act and the CIT Act.

The method of taxation with personal income tax is regulated by the PIT Act. It indicates that it should cover those who reside in the territory of the Republic of Poland, regardless of the source of their income. To the group of entities subject to this tax in accordance with art. 3 sec. 2b of the PIT Act, therefore, include, inter alia, persons working under an employment contract, civil law contracts or conducting their own sole proprietorship, or being partners of civil partnerships, settling on the basis of simplified accounting.

This tax covers income, i.e. in most cases, income less tax deductible costs. The tax should be paid to the bank account of the tax office competent for the place of residence of the taxpayer. Art. 17 § 1 of the Tax Ordinance:
Unless the tax laws provide otherwise, the local jurisdiction of the tax authorities shall be determined according to the place of residence or the registered office address of the taxpayer, payer, collector or entity mentioned in art. 133 § 2. During the year, it is necessary to make advance payments for income tax, the final settlement of which is made in the annual tax return. It is possible to choose one of two forms of paying advances for income tax - monthly or quarterly. It is also possible to pay simplified advances in a fixed monthly amount, regardless of the income earned in a given period. Tax advance payments should be made by the 20th day of the following month in the case of monthly settlement, or by the 20th day of the first month after the end of the quarter in the case of quarterly settlement. The amount of tax depends on the selected form of taxation:

  • general principles - taxation according to the tax scale of 17% and 32%;

  • flat tax - taxation at the rate of 19%;

  • checked lump sum;

  • tax card.

In the case of settlement on the basis of a tax card, advance payments should be made by the 7th day of the following month. Advance payment for December is payable until 28 December. After the end of the year, you must submit the PIT-16A annual declaration by January 31, 2020.

Taxpayers settling based on a flat rate on recorded revenues have a choice of 5 basic rates, which depend on the type of business (17%, 15%, 10%, 12.5%, 8.5%, 5.5%, 3 % and 2%). The taxpayer must submit the annual tax return PIT-28 by March 1, 2021. The flat rate of 12.5% ​​applies after exceeding the income limit of PLN 100,000 in the case of private rental. Taxpayers settling on the basis of the tax scale tax their income at the rate of 17% in the case of income not exceeding PLN 85,528. After exceeding the first threshold, the surplus is taxed at the rate of 32%. The deadline for submitting the PIT-36 or PIT-37 annual tax return for 2020 is April 30, 2021.

Taxpayers who chose a flat tax tax their income at a fixed rate of 19%, regardless of the amount of the income earned. Similarly to the case of taxation under general rules, the deadline for submitting the annual tax return for 2020 is April 30, 2021. The appropriate annual tax return in the case of flat tax is the PIT-36L form.

Tax return and applicable deadlines

If the submitted annual PIT declaration results in an overpayment of income tax, the tax office is obliged to return the overpaid amount to the taxpayer's bank account or in the form of a postal order.

After submitting the annual declaration showing the overpayment, the tax office has to:

  • 45 days - for declarations submitted electronically, after February 15, 2021;

  • 3 months - for declarations submitted in other forms.

The return period is counted from the date of submission of the declaration. Importantly, if the annual declaration is submitted before February 15, 2021, the return deadline will start from that date. The return can be made in the form of a bank transfer or a postal order. If the taxpayer is in tax arrears, he is not entitled to a tax refund because the overpayment will be credited towards the outstanding liabilities.

The deadline for the income tax refund may change if the taxpayer corrects the original annual tax return. In such a case, the period of 3 months or 45 days (when the declaration was submitted in electronic form) is counted from the moment of submitting the correction.

Examples of terms of returns are presented in the table below.

Deadline for submitting the declaration

Method of submitting the annual tax return

Deadline for the refund of overpayment of tax

January 10, 2021

electronically

April 1, 2021 (45 days starting from February 15, 2021)

January 19, 2021

paper - in person at the office

May 16, 2021 (3 months counted from February 15, 2021)

February 22, 2021;

correction 1 April 2021

electronically

May 16, 2021 (45 days starting from April 1, 2021)

VAT refund

VAT issues are regulated by the Value Added Tax Act. VAT is an indirect tax that is charged and collected at every stage of trading a service or good. It is crucial for entrepreneurs to distinguish whether a tax is charged or due.

Input tax is related to the purchase. The value of the input tax may reduce the value of the VAT liability that must be paid to the Tax Office (output tax). The tax due is related to the sale.This is the amount that the entrepreneur must pay to the Tax Office. Its value may be reduced by the value of the input tax.

Only active VAT taxpayers can use the right to deduct VAT - entities exempt from VAT or entities not conducting business activity do not have such a possibility.

Start a free 30-day trial period with no strings attached!

VAT on time

The issues related to the deduction of VAT are detailed in the VAT Act. VAT may be deducted in the period in which the seller's tax obligation arose, but not earlier than on the date of receipt of the invoice. Here, special attention should be paid to the phrase "receipt", which must not be confused with the invoice date. The deduction can be made in the period of receipt of the invoice or in one of two or even three consecutive billing periods (these are respectively 3 months - in the case of monthly settlement - or 2 quarters - in the case of quarterly settlement).

Example 1.

A taxpayer who settles VAT on a monthly basis purchased materials used in business activities for the production of pens. The invoice was issued on May 25, but the taxpayer did not receive it until May 29. The taxpayer acquires the right to deduct VAT on May 29. The tax can also be deducted in the declaration for June, July or August.

Example 2.

An entrepreneur settling VAT on a quarterly basis purchased water for employees on May 30, and the invoice was delivered on June 1.

The taxpayer has the right to settle VAT in the return for the second, third or fourth quarter of the year.

VAT refund

If in the declaration part of the JPK_V7 file the input tax (VAT on purchase invoices) exceeds the output tax (VAT on sales invoices), the so-called excess tax.

The surplus may be transferred towards future accounting periods. If there is also a surplus in the following settlement periods, it is possible to accumulate them and carry them over to subsequent settlement periods.

It is also possible to show the surplus to be returned to the entrepreneur's bank account or VAT account. A taxpayer may apply for a tax refund within one of the three statutory deadlines:

  • up to 60 days from the date of submitting the declaration - the type of purchases made and the rate applied to the sale of services and goods is irrelevant. This term is also used for foreign transactions. If the tax authority has doubts as to the validity of the VAT refund, it may extend this deadline by way of a decision;

  • up to 180 days from the date of submitting the declaration - the term is used when there is no taxable sale in a given period, and only costs were incurred;

  • up to 25 days from submitting the declaration - in the case of return to the taxpayer's bank account, certain conditions (listed below) must be met. On the other hand, the return to the taxpayer's VAT account is made upon the taxpayer's request submitted with the tax return.

Currently, in order for a taxpayer to be able to apply for a tax refund within the shortened period of 25 days to a bank account, the following conditions must be met:

  • the amounts of input tax shown in the tax declaration, excluding the amount of input tax or the tax difference, not settled in previous accounting periods and shown in the declaration, 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;

    • invoices other than those mentioned above, if the total amount due 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 tax difference, unsettled in previous accounting periods and shown in the declaration, does not exceed PLN 3,000;

  • the taxpayer submits to the tax office, not later than on the day of submitting the declaration, a confirmation of payment of the amount due;

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

    • was registered as an active VAT taxpayer,

    • submitted declarations for each accounting period.

How to apply for a VAT refund in the wfirma.pl system?

The VAT refund should be applied for in the JPK_V7M (for monthly settlements) or JPK_V7K (for quarterly settlements) for the period in which there is an excess of input tax over due tax.

In order to generate the JPK_V7 file in the wfirma.pl system, go to the tab: START »TAXES» SINGLE CONTROL FILE »ADD» ADD JPK_V7. In the window that will appear, select the period to which the generated JPK_V7 file relates, and indicate SUBMISSION OF THE DECLARATION. In the window for adding the JPK_V7 file on the third page, in the Settlement of surplus section, select the type of account to which the return is to be made and the date of return:

  • bank account - a return to the basic account which may take place in:
    • 25 days
    • 60 days
    • 180 days.
  • VAT - a refund to the VAT account in 25 days.

Then, in the Refund Amount field, enter the value of the excess VAT refund.

Details of filling in the JPK_V7 file in case of VAT refund are explained in the help article: VAT refund within 25, 60, 180 days.