Polish Entrepreneurs Wait For Code Of Good Practice

In the summer, the Ministry of Finance started tax consultations with Polish entrepreneurs on a list of due diligence requirements for buyers in VAT transactions. Meeting these requirements would mean entrepreneurs may be certain they have the right to deduct value-added tax from the carried-out transactions.

In other words, the Ministry wanted to teach business owners in Poland what they should do in order not to get in trouble with Polish entrepreneurs and fiscal authorities. In the Ministry’s words, the list was to be “complete and precise” and give you a guarantee that you will not be considered a participant in VAT fraud or charged with some other fiscal offense.

A report from the VAT consultations was published in July 2017. Company owners in Poland have been waiting for further developments in this matter ever since. Officially, the list of good practices is going to be published when the Ministry of Finance ends its internal analyses. Unofficially, government officials seem to have second thoughts about the whole idea of Polish entrepreneurs.

Tax officials worry that a closed list of due diligence requirements could be used by criminals to avoid being accused of breaching fiscal regulations and it will make tax inspections harder to carry out as taxpayers will know how to “beat” the system.

Instead of having numerous obligatory verification procedures that will take a lot of time and resources, Polish entrepreneurs and lawmakers are now planning to introduce a list of tips or steps to take before concluding an agreement and executing a transaction with an unknown seller which will, however, bear no legal effects.

Before doing business with another company, entrepreneurs should, among many other things, check their counterparty’s VAT status. Selling to or buying from a company that has an invalid VAT number may cause you a lot of trouble.