ECJ decision simplified correction of reverse charge purchases in Poland

The European Court of Justice ruled that the VAT Directive trumps national legislation. Output VAT is not required to be reported separately when correcting IC-acquisitions. This means that taxpayers in Poland are entitled to refunds for VAT overpayment and interest incurred on IC-acquisitions.

Reporting of both input VAT and output VAT to change in Poland

On 18 March 2021, the European Court of Justice made a decision regarding the way input and output VAT were reported in Poland. Previously, businesses were subjected to national legislation that called for reporting input and output VAT in different reporting periods. This eventually led to VAT and interest incurring on intra-Community acquisitions, which in principle should not be the case according to the VAT Directive.

What will change due to the ruling?

For many companies, due to the difference in reporting periods and national legislation, they were paying VAT on intra-Community acquisitions and incurred interest when this should not have happened. The European Court of Justice determined that this was in contradiction of certain articles laid out by the VAT Directive. From now on, national laws in Poland will no longer precede articles 167 and 178 of the VAT Directive.

The decision was made keeping the overpayment of VAT and incurred interest on intra-Community acquisitions in mind. However, since all reverse charge transactions would have experienced the same issue, in theory the new ruling should apply to these types of transactions as well. 

How do I claim my refund?

Taxpayers who are entitled to a refund who had not had any dispute raised by the tax authorities should submit an application supplemented with corrective VAT returns. These VAT returns should be pertaining to all periods in which input and output VAT were declared separately. Refund applications will be accepted until the statute of limitations period ends.

The ECJ also deemed that settlements in tax and court proceedings that arose from quarrels with the tax authorities in Poland on the matter could be reexamined. In these cases, if a final decision was reached by the courts, companies should submit an application to reopen the proceedings.

Those who dealt with administrative proceedings have one month from the publication of the ECJ ruling in the Official Journal to submit their application. If court proceedings took place, the deadline for application submission is extended to three months from the date of the publication.

Need help?

We would be happy to clarify any of the above or help you with your refund in Poland. Contact us today to find out more about what services we can offer you to help you.


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