On the Finance Ministry website yesterday there was a statement announcing proposals for changes to the VAT Act, reducing VAT rates for certain goods, as well as simplifying the system of tax rates.
According to Minister Teresa Czerwińska, the resort will propose a reduction of VAT for bread, citrus fruits, baby products, children and women, as well as for e-books and electronic magazines. It's about the so-called equation up: basic food products – all kinds of breads and biscuits, soups, broths, homogenized and dietetic foods, seasonings, tropical fruits and citrus fruits; products for babies and children – food, pacifiers, diapers, car seats; Toiletries for women, as well as e-books and electronic magazines.
The new lower VAT rates should be a continuation of pro-family government policy and additional economic support for Polish families, but also the development of society in the field of culture and science, hence the proposal of a lower tax rate in e-books and electronic magazines.
In addition to reducing part of the VAT rates, the amendment to the law also aims to simplify the system of VAT rates, which will increase the certainty of taxpayers and tax authorities as to the correct application of the tax rates.
The simplification of the system of reduced rates of VAT should be based, for example, on bread for the lowest rate of 5%. regardless of the expiration date (currently bread with an expiration date of up to 14 days has a 5% VAT rate and a 14 day rate of 8%).
The same will be with the cookies, all, regardless of the date of durability, will be covered by a VAT rate lower than 8%. (currently, those with a durability date of up to 45 days have a rate of 8% and those above a rate of 23%).
Also, fruits, both domestic and citrus, or tropical fruits will be covered by the uniform 5% lower tax rate (currently, the domestic ones are covered at the rate of 5%, the remaining 8%).
The amendments to the VAT Law proposed by the Ministry of Finance are also intended to improve the situation of taxpayers in relation to tax services and this is to serve the so-called Boundary Limit Information (WIS), as well as binding tariff information or information on compulsory excise duties.
Because the Ministry undertakes a change in the way goods and services are identified for VAT purposes, a move away from the application of the Polish Classification of Goods and Services (PKWiU 2008 and transition to the EU Combined Nomenclature in the field of goods and the Polish Classification of Goods and Services (PKWiU 2015) in the field of services, it seems that there may be doubts about the reduced rates applied.
Although the new solutions provide for a reduced single tax rate for all NC departments, which means a significant reduction in the number of items in the new Annexes 3 and 8 of the VAT Act, taxpayers may have doubts.
Hence the introduction of the WIS, or decisions of the tax authorities, as opposed to the CSO rating opinions that have worked so far, which will give taxpayers and tax authorities greater certainty as to the correctness of VAT rates applied.
The WIS will provide protection to economic entities that request this information from the tax authorities because the tax authority will not be able to question, for example, the rate applied by the taxpayer (of course, when the goods and services match the WIS description).
The application of new reduced VAT rates is expected from 1 January 2019, but from 1 April 2019 taxpayers will be able to apply for WIS to allow taxpayers to familiarize themselves with the new system and to goods and services.