VAT refund and established property security

Service-Tax

Taxpayers who have the appropriate right to deduct VAT may apply for a VAT refund. The funds obtained from the state budget can be used for the purposes of the conducted business activity. However, there are also other situations in which entrepreneurs are entitled to either a standard return period or an extended deadline due to various circumstances. However, there is also a solution in this case.

VAT refund

If for a given settlement period (month or quarter) the taxpayer has shown a surplus of input VAT over the output VAT, then it is entitled to reduce the amount of tax due for the next periods by this difference or to refund the difference to the bank account.

The tax difference is refunded within 60 days from the date of submission of the VAT return, which includes the amount to be returned to the taxpayer's bank account at a bank established in the territory of the country or to the account of the taxpayer in the jump of which he is a member.

Proceedings of the tax office in the event of a refund within 60 days

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 the verification activities. If, as a result of the activities carried out, the tax office finds that the refund is justified, then it refunds the VAT. If the proceedings are extended, the taxpayer will also receive the interest due to him at the time of return.

In situations where the entrepreneur has not made any taxable sales in a given period or has doubts as to the extension of the verification procedure with regard to the submitted VAT refund documents, he may submit to the head of the tax office property security corresponding to the amount of the requested VAT refund.

If the tax office decides to extend the deadline, then, at the taxpayer's request, it may refund the tax difference within 60 days, if the taxpayer, together with the application, submits a property security to the tax office in the amount corresponding to the amount of the requested tax refund.

If the application with the security has been submitted 13 days before the expiry of the 60-day return period or later, in this case the tax office will make the refund within 14 days from the date of lodging the security.

Property security

Forms of property security provided for in the case of VAT refund are:

  • bank or insurance guarantee,

  • bank guarantees,

  • promissory note with the bank's surety,

  • a check certified by the domestic bank of the issuer of the check,

  • bearer securities with a specified maturity date issued by the State Treasury or the National Bank of Poland, bank securities and mortgage bonds with a specified maturity date, issued on its own behalf and for its own account by an entity that may be a guarantor or surety in accordance with the provisions of the Tax Code.

If the amount of VAT is refunded in the amount not exceeding EUR 1000, then the property security may be provided in the form of a promissory note. The conversion of the amount expressed in EUR is made according to the average EUR exchange rate announced by the National Bank of Poland on the last business day of the settlement period to which the VAT refund relates, rounded to the nearest PLN.

Examination of the application by the tax office

The head of the tax office may refuse to accept the security if it finds that the security provided:

  • does not fully cover the amount to be refunded or

  • it does not fully cover the amount of the reimbursement within the time limit in the case of collateral with a specified validity period.

The tax office releases the property security on the day following:

  • completion of the verification by the tax authority in the case of collateral,

  • in which 180 days have elapsed from the date of submission of the tax declaration in which the amount of the tax refund was shown.

The security is not released:

  • in the event of initiation, in accordance with the provisions of the Tax Code:

  • tax proceedings in the scope of the settlement to which the security relates - until the end of these proceedings, or
  • tax inspection in the scope of the settlement to which the security relates - until the expiry of the period of 3 months from the date of completion of the inspection, if no tax proceedings have been initiated within this period,

  • in the case of initiating a customs and tax control in the scope of the settlement to which the security relates - until the expiry of the period of 3 months from the date of completion of this control, and if within this period the customs and tax control was transformed into tax proceedings in the scope of the settlement to which the security relates - to completion of this procedure,

  • if it is found that the taxpayer in the submitted tax declaration showed the amount of the refund of the tax difference or the return of input tax that was undue or higher than the amount due and received it - until the resulting tax arrears are settled.

Proceedings of the tax office in the event of a refund within 180 days

By submitting an application for a VAT refund, the taxpayer delivered goods or services outside the territory of the country and at the same time did not make a taxable sale. In this case, he is also entitled to a refund of the amount of input tax within 180 days.

A taxpayer who did not perform taxable activities in the territory of the country in the tax period and:

  • delivery of goods or services by the taxpayer outside the territory of the country, if these amounts could be deducted if these activities were performed in the territory of the country, and the taxpayer has documents showing the relationship between the deducted tax and these activities,

  • free delivery of goods belonging to his enterprise and any other donations related to food products, with the exception of alcoholic beverages with an alcohol content above 1.2% and alcoholic beverages containing a mixture of beer and non-alcoholic beverages in which the alcohol content exceeds 0.5%, if they are transferred to a public benefit organization within the meaning of the Act of 24 April 2003 on Public Benefit and Volunteer Work, for the purposes of charity activities carried out by this organization,

- has the right to receive a VAT refund after submitting a reasoned application together with a VAT declaration.

In this situation, the refund of the amount of the input tax deductible from the output tax in connection with the business activity conducted in the territory of the country or outside this territory will be made within 180 days from the date of submission of the VAT declaration together with the reasoned application.

The exception will be the case where, at the taxpayer's written request, the tax office will refund the VAT, but within 60 days, but on the condition that the taxpayer submits property security to the tax office.