New VAT regulations: Annex 16 and buyer's liability

Who will be covered by the new regulations?

The new Annex No. 16 to the VAT Act will include, among others: accounting and bookkeeping services, advertising services, software and hosting services, business consulting and employment-related services.

It will be crucial to assign the service to the appropriate PKWiU grouping - not every consulting or IT service will be covered by the new regulations.

The buyer will be liable if, at the time of providing the service, he knew or had reasonable grounds to suspect that VAT would not be transferred to the tax office. Particular attention should be paid to unusual terms of cooperation, e.g. prices that differ significantly from market prices without justification. However, a promotional price or discount resulting from permanent cooperation does not necessarily mean tax risk - it is important to have appropriate justification and documentation.

Two thresholds you need to remember

The exclusion of liability for VAT will apply to purchases documented with an invoice for less than PLN 15,000. PLN gross.

However, if the sum of services covered by the new regulations, purchased from one service provider in a given month, exceeds PLN 50,000. PLN net – the exclusion ceases to apply.

Split payment – a protective shield for entrepreneurs

Good news for companies: split payment remains an effective protection against joint and several liability for VAT. After the Senate's amendments, payment in split payment excludes the buyer's liability also for services covered by the new Annex No. 16.

However, it is worth remembering that split payment does not give you the right to deduct VAT from an invoice for a service that has not been performed.

Simplifications and new responsibilities

The package of changes in VAT includes not only an extension of liability, but also a number of simplifications - including: abolition of separate information about the physical inventory when closing a business or simplification when purchasing a car from the European Union.