Sealing the tax system in Poland – introduction of VAT white list of taxpayers
As of 1 September 2019 the new electronic register of Polish registered VAT payers (including entities who were declined to be registered for VAT purposes, removed from the register and restored to it) is compiled by the Head of the National Tax Administration (so called: the white list). The register is available on the Ministry of Finance’s website and apart from the data previously stored – it contains numbers of taxpayers’ bank accounts.
According to the opinion of the Ministry of Finance, in recent years, both in Poland and other European Union countries, an increase of using VAT mechanisms to commit criminal acts can be observed. This applies to the reduction of revenues to the state budget by lowering reported receivables, non-payment of declared tax liabilities, as well as extortion of undue VAT returns. The factors mentioned are related to crime activity based on the so-called tax carousels. The growing importance of exercising due diligence in the context of the contractors verification is emphasized at this point. Due diligence is a kind of safety valve for taxpayers in case of challenging the tax reconciliations of the taxpayer by the tax authorities. Replacing the existing lists with a new, complex system that contains a number of information on VAT taxpayers is supposed to improve the process of data verification between contractors.
As of January 1, 2020, the use of the white list became de facto mandatory for numerous entrepreneurs. Otherwise, they are exposed to severe sanctions.
The white list makes it possible to:
check if your contractor is an active VAT taxpayer,
confirm the bank account number to which the payment to your contractor should be made,
if your contractor has been refused registration, removed from the register or re-registered as a VAT payer, you can find out what was the legal basis of these decisions.
How it works?
While making payments for goods or services purchased with respect to transactions in the amount exceeding PLN 15,000 (around EUR 3,500), the taxpayers are required to verify the bank account of the supplier every time, so that the transfer is made to the right bank account, i.e. the bank account number included in the white list kept by the Head of the National Tax Administration.
On the other hand, the taxpayers should make sure the above-mentioned database includes their current bank account numbers used within the scope of their business activity.
Sanctions for using a non-white list bank account
The white list, according to the intention of the legislator, is to help even better seal the VAT system, and therefore, in certain cases its use should be mandatory and common. Therefore, the launch of the white list is accompanied by the introduction of specific tax sanctions for its non-compliance,
As of January 1, 2020, settling the amount exceeding 15,000 PLN to the bank account other than that specified in the white list results in:
• lack of possibility to recognize as cost deductible the amount or part of the amount that has been paid to bank account other than that specified in the list,
• bearing the risk of joint and several liability with the contractor for potential VAT arrears.
Doubts and expectations
As a rule, the data included in the electronic register will be updated on a daily basis (each business day). Therefore, the contractor’s bank account number should be confirmed on the same day the transfer is planned to be made. For entrepreneurs, the need to check each contractor on the VAT payers white list is a lot of extra work, especially for medium and largest business entities that can order up to several dozen transfers daily.
On the other hand, the white list of VAT taxpayers aims to determine the current status of the taxpayer and in addition contains relevant information related to the functioning of the economic entity, which is also publicly available. Hence, the comprehensiveness of the new system is aimed at encouraging taxpayers to actively and regularly control contractors, which in turn is supposed to eliminate the phenomenon of unconscious participation in carousel transactions.
Newly introduced provisions however raise many doubts. Among others, the concept of transaction remains unclear. Certainly, the transaction is a broader concept than just payment. This results for example in in the obligation to verify the contractor’s data in case of payments for continuous services settled in settlement periods (e.g. renting services) when their total exceeds PLN 15,000, even if payments for individual periods did not exceed the limit.
According to the Ministry of Finance, the tool in the form of a new list of taxpayers has a real chance to achieve measurable effects in combating the shadow economy, thanks to which budget revenues from tax receivables are to increase in the coming years.
