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Practical aspects of excise compliance

Contrary to appearances, excise duty compliance and VAT compliance are two different processes, while there is a common part that constitutes the core of the two processes. Interestingly, prior to accession to the European Union, both indirect taxes contained their provisions in a single act, which was called the Value Added Tax and Excise Duty Act.

General comments

The common part is certainly the monthly analysis of transactions and submission of declarations. Similarly to VAT, excise tax returns are submitted by the 25th of the month following the month in which the tax liability arose.

Excise duty is specific due to its selectivity and exclusivity, as it broadly covers energy products, electricity, alcoholic beverages and tobacco products. It may seem that supplies are usually irregular, as in the case of VAT, where goods circulate every month – although not always. However, this probably depends on the company and its needs and business profile.

Before we submit the declaration

The first obligation, and also a practical problem, is the need to register with CRPA – the Central Register of Excise Operators. Conducting business activity in the field of excise goods, or even just consuming excise goods exempt from excise duty due to their intended use, obliges you to make a registration declaration on the PUESC platform. If someone has previously been registered for excise duty using the AKC-R form, data should automatically migrate to the new platform.

Registration to CRPA is also not an easy process, especially when relatively detailed data has to be provided during registration. In the case of registration for a company, it is extremely important that the power of attorney was drawn up and authorized exactly for those things which we are applying for on PUESC (possibly more widely, although here the attorney should be cautious). Otherwise, we will receive a call to supplement the formal deficiencies, and to call the PUESC hotline is very difficult, not to say that there is little chance for this.

Currently the only option for sending current declarations is electronic way – that is why registration is so necessary. Maybe it is a good thing – paper declarations looked like at least lay on the bottom of the sea and were covered with a green feather.

Preliminary analysis

Once an entity is on the register, it is possible to analyse source documents or excel spreadsheets and characterise transactions. Naturally, each case should be analysed before registration so that everything is reported on time. It is very important to determine the correct rate of tax on excise goods, as this determines the amount of excise duty due to the tax office.

In contrast to VAT, the amount of the tax is calculated not on the value of the transaction, but at the rate calculated on the quantity (units of measure) of the product in a given transaction.

Excise tax and VAT are harmonised taxes in the European Union, which is why countries are required to apply a minimum level of taxation to individual products. However, countries may set their own financial policies and establish rates under their own fiscal policies. As Poland does not have the euro currency, it must verify the level of its rates every year.

Thus, in the Excise Duty Act of 6 December 2008, we can find such rates for domestic calculations. Another important thing is to establish the tax obligation – this will determine the period in which a given excise transaction must be recognised. Articles 10-12 of the Excise Duty Act specify a number of moments when the obligation arises, which are different for various categories of excise goods and activities or events subject to taxation.

Declarations and payment

Excise declarations consist of the main form AKC-4/AKC-4zo and attachments for individual product groups. Both forms must be declared simultaneously by the 25th of the month following the month in which the tax obligation arose. Only the simplified declaration for WNT for business purposes or WNT of passenger cars is submitted by a different deadline.

It is worth to remember that according to the VAT Act and in the light of article 106e of the VAT Act, there is no obligation to indicate the CN code on the invoice. After all, the CN code is the main factor in determining the rate for a specific product, so to remove any doubts the contractor may include such a code on the invoice. Unfortunately, the regulations in this respect are imprecise, as only Art. 10(12) of the Excise Duty Act indicates that at the request of the buyer, the excise taxpayer shall indicate in the invoice or in a declaration attached to the invoice the amount of excise duty included in the price of the excise goods shown on the invoice. Thus, the excise duty does not appear on the invoice automatically and there is no obligation to indicate the CN number at all, but the buyer can and should ask for it to be included.

Finally, it should be noted that the bank account to which the excise duty due should be paid is the account of the tax office in Nowy Targ. Which, as it may seem, is not so obvious, since the declarations ‘land’ in tax offices with territorial jurisdiction (also often other than for VAT), and the payment is made to the account of a single office in Poland. A delay in excise duty payment means, as in the case of other taxes, that interest has to be calculated.