- VAT settlement when the contractor is deregistered from the VAT register in Poland
- Active VAT taxpayers have the right to deduct VAT for goods and services used for taxable activities
- The amount of deducted tax includes the sum of tax amounts from invoices received by the taxpayer for the acquisition of goods and services
- Does the taxpayer lose the right to deduct VAT from an invoice issued by a deregistered VAT taxpayer?
- As a rule, the right to deduct VAT arises in the settlement period in which the taxpayer received the invoice
- If the taxpayer does not deduct VAT within the specified period, they can do so in the tax return for the next three or two settlement periods
- The taxpayer has the right to deduct VAT for that period if the conditions are met and there are no circumstances listed in the VAT Act
- The taxpayer should ensure that the received invoice is correct and confirms the actual transaction
- Verification of the VAT status of the counterparty is important to ensure the right to deduct VAT
- Negative verification in the VAT register should be kept for evidentiary purposes
- The taxpayer has the right to deduct VAT if the counterparty was not an active VAT taxpayer at the time of providing the service and issuing the invoice
- The right to deduct VAT from an invoice issued by a counterparty who was deregistered from the VAT register is still applicable if the transaction occurred before the deregistration
- Formal considerations should not hinder the right to deduct VAT if the taxpayer was unaware of any irregularities on the counterparty’s side
- The taxpayer has the right to correct the taxable base and VAT amount for bad debts if the non-collectibility is proven
- The correction can be made if the debt has not been settled or transferred within 90 days from the payment deadline specified in the agreement or invoice
- Conditions for using the bad debt relief include the creditor being an active VAT taxpayer and the invoice not being older than three years from the end of the year it was issued
- Polish regulations denying the right to deduct VAT solely because the invoice was issued by a non-existent entity contradict EU VAT directive, except in cases of proven knowledge of VAT-related crimes
- The determination of such circumstances is the responsibility of the court, not the taxpayer.
Source: pit.pl
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
