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Next responsibilities with the new year – what will excise duty look like in 2021?

At the end of 2020, The President signed a law amending the Excise Duty Act and certain other laws (hereinafter: the Act), which introduce a number of amendments not only to the Excise Duty Act, but also to the Tax Code or the Act on electronic service. However, the following article will focus only on this first amendment – excise duty.

As we read, the Act enters into force on 1st February 2021 with the exception of Article 4, which enters into force on 31th January 2021 and Article 5 as of 1st July 2021.

What is the purpose of the changes?

First of all, to improve the rules on the verification of the supply of certain excise goods. Furthermore, as indicated in the explanatory memorandum to the project: In connection with the centralization and electronification of registrations, in order to provide comprehensive data on the entities subject to the obligation to inform about the intention to start a business, it is proposed to make those entities subject to the obligation to submit a registration application in order to register them in a single central database.

In view of the above, as can be seen, the legislator also notes a certain need to regulate the rules due to the increasing automation of the system and seeks to eliminate existing errors. However, it is not known whether it is effective enough.

Central Register of Excise Entities (CREE)

Undoubtedly, the creation of the CREE and the definition of its principles and functions can be regarded as the most important change. Such registration declaration will have to be made to the competent director of the Chamber of Tax Administration by the Electronic Revenue and Customs Services Platform (in polish: PUESC).

What does the introduction of the CREE mean for existing entities already in the system? First of all, this regulates the additional necessity and again another obligation. This time, you will need to update the application platform. This is due the obligation to supplement it with information concerning the competent Tax Office. Thus, in examining the foregoing, any entity concerned by excise duty is required to register in the system. Furthermore, the catalogue of registration obligations has been extended to include additional entities which intend to consume products exempt from excise duty as a result of their intended use, i.e. aviation fuel, shipping fuel or LPG.

Interestingly, on the base on Article 7 of the Act, it can be inferred that when an entity which, before the date of entry into force of the Act (before 1st February 2021), submits a registration application to the competent authority and receives a confirmation of acceptance, it will be registered with the CRPA upon notification of data concerning the competent tax authority. However, such a supplement must be made before 30 June 2021. By translating this into action, the taxpayer will be obliged to update his PUESC application and the new entities that will also be required to register will also be required to register.

In addition, it is worth mentioning that, in accordance with Article 20c (1) of the Act, an entity which may represent a foreign trader may only be an entity which is registered with the CREE and is established in the country and fulfils certain conditions set out in Article 20e (1) (1) and (2), i.e. in the case of an operator:

  • the name of the entity;
  • address(s);
  • the address of the place of business;
  • a tax identification number or other identification number;
  • the identification of the type of excise goods or the identification of the passenger cars which are the subject of the economic activity, or the nature of the excise goods used in its operation;
  • demonstration of the competent head of the tax office in the field of excise duties;
  • in the case of a foreign entity, also the data of its branch in the territory of the country (including the name of the branch with its registered office, where it conducts business in the territory of the country).

EMCS PL2 System

As indicated in the explanatory memorandum to the draft law, the provisions need to be amended to ensure the smoothness of the supply of excise goods used by EMCS PL2 and electronic delivery documents (e-DD). Undoubtedly, the legislature focused on the issue of regulating the control of that EMCS PL2 system in relation to supplies which are exempt from excise duty on coal products, as well as movements of products which are imported and exported. The above is certainly complementary to the existing regulations, but also aims to improve the rules for controlling the supply of products thanks to e-DD.

In particular, the Act provides for the verification of sales in EMCS PL2 which are exempt from excise duty on coal products and are carried out by an intermediary. It would be important that this entity had sales of more than 30 million kg of coal products in the previous year.

In addition, the monitoring of the movement of excise-exempt energy pipelines and the rules simplified for changes in the means of transport of moving products were also taken into account.

The Finance Ministry ensures that the changes made and the creation of the register are not only intended to simplify the existing system, but also to provide up-to-date information on excise entities not only for tax administrations, but also for entrepreneurs, and this will simplify further verification of persons operating in the supply of excise goods.