Ministry Of Finance Is Considering Resigning From Tax Returns

Every company in Poland that is a VAT payer is under obligation to file periodic VAT tax returns to the Ministry of Finance. The document, which may be submitted on a monthly or a quarterly basis, indicates the amounts of VAT sales and purchases and the amount of value-added tax liability the entity has to pay. Tax offices use these to check whether entrepreneurs meet their fiscal obligations and calculate and pay taxes in the appropriate way and amount.

Filing tax returns is mandatory. Failure to meet this obligation puts a company at risk of some severe penalties, ranging from fines to losing the VAT number and being removed from the register of VAT taxpayers. This in turn means they are not allowed to enter into any VAT transactions. Entrepreneurs must make sure they as well as their counterparties have active VAT numbers. Doing business with an entity that fails to comply with tax obligations (including the obligation to submit VAT tax returns) is, in the eyes of fiscal authorities, highly suspicious.

Recently, however, officials from Polish Ministry of Finance admitted the obligation may be done away with. After the Ministry introduced the Consolidated Control File in 2016, fiscal officials are receiving tons on information on business transactions carried out by Polish companies. This means that submitting VAT data in a separate document appears to be no longer necessary. Wojciech Śliż from the goods and services tax division at the Ministry has said it appears natural to dispose of one of the two obligations.

Today, Consolidated Control Files are only submitted by the biggest companies in Poland. Soon, the obligation will cover 1.5 million of enterprises registered in our country. The Ministry is monitoring the implementation of the new requirement and the problems enterprises and officials may encounter when preparing and analysing the reports. The abolition of tax returns will happen no sooner than in 2019.