SLIM VAT 3 – Simplification of VAT rules in Poland

The changes should be perceived as positive, as they simplify VAT settlements and mitigate sanctions. Below is a summary of the main changes.

VAT sanctions

SLIM VAT 3 introduces significant changes regarding VAT sanctions. These changes are the result of an EU Court of Justice judgment, and give Polish tax authorities discretion in setting the amounts of sanction rates, which previously were determined as fixed amounts (at 15%, 20%, 30%, or 100%, depending on the situation). As a result of this change, the tax authorities can differentiate the level of the sanction (from 0.1% up to 100%). In special circumstances, Poland’s tax authorities can also decide not to impose VAT sanctions at all.

VAT small taxpayer

Following the implementation of SLIM VAT 3, the sales limit for small VAT taxpayers has increased from EUR 1.2 million to EUR 2 million. This change allows a greater number of small companies to benefit from the advantages of being a “small taxpayer” – namely, using the cash method and submitting quarterly VAT returns.

VAT ratio

Taxpayers no longer have to agree to the VAT ratio, notification about the VAT ratio is sufficient. An annual adjustment is not necessary if the final rate does not exceed 2% and the difference does not exceed PLN 10,000. Taxpayers are now able to deduct 100% of input tax in cases where the VAT ratio exceeds 98% and the input tax does not exceed PLN 10,000.

Intra-EU acquisition 

Taxpayers are entitled to settle input tax from intra-EU acquisition of goods without an invoice documenting the transaction.

Exchange rates for corrective invoices

SLIM VAT 3 provides that in the case of corrective invoices, taxpayers can apply historical exchange rates (from the original invoice). Only in cases of collective corrective invoices can taxpayers choose between historical rates and the current rate.

Wojciech is a tax professional focusing on issues with respect to transactions and international restructuring.