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Revolutionary simplification in VAT? SLIM VAT is coming

Revolutionary VAT changes were announced the previous year. However, in recent days Minister Tadeusz Koscinski has developed detailed issues of the new Ministry of Finance project. As the Minister emphasized, We would like to simplify and reduce formalities so that the time, that entrepreneurs spend on payoffs, was getting shorter.

Is SLIM VAT a hope for an improved tax system for polish entrepreneurs?

It is worth to mention, that the secondary aim of project is desire to minimalize tax gap. Additionally, the pandemic situation emphasized importance of helping for entrepreneurs in scope of tax activity. The project is particularly promising for financial and accounting departments, where significant time reduces are provided.

As a Deputy Minister of Finance, Jan Sarnowski points out, SLIM VAT was constructed from the words: simple – which means, easy to use tax, local – adapted to the local specificity of the state, and modern – innovative regarding new solutions, which involves minimizing the liabilities on taxpayers.

List of changes

What changes does the Ministry of Finance announce in VAT? First of all, simplified invoicing where there isn’t necessary to obtain confirmations of correction invoices in-minus by the buyer or recipient of services. Consequently, the payoff process is to be significantly simplified. Moreover, as regard in-plus correction invoices, i.e. increasing the tax base, will be legal provisions on current payoffs. In addition, the term for applying the zero rate will be increased from 2 months to 6 months. In the new rules, the taxpayer will get confidence of adequate payoff, which will be executed in a current way at the time of write corrective invoices out. Moreover, the taxpayer will reduce the tax base and VAT due at the time of write corrective invoices out. There is one condition, it must be clear from the documents that he has agreed on the conditions with the buyer or recipient of services. At the same time, it is a adverse change for the recipients of these invoices, which issuers will be able to “impose” correction on the turnover.

Moreover, for the taxpayer it is possible to choose the conversion rules for exchange rates in relation to calculations in income tax. On the other hand, in the case of common exchange rates with income tax, the taxpayer will be free to choose the conversion rules. In this case, the time to clarify the exchange rate regarding to individual transactions will be reduced. The arrangement of a common exchange rate for the payoffs of transactions for both taxes will certainly contribute to improving the foregoing solutions.

An important advantage, is also the extended term of VAT deductions taking place ‘up to date’ to 4 months. Thanks to that, the taxpayer has the possibility to recognition the invoice without liability to correct the tax declaration, which has been an additional process extending the work of both entrepreneurs and tax authorities. Another financial advantage is the possibility of deducting VAT from invoices for accommodation service to a business client. In addition, the limit for single gifts of small value will be increased from PLN 10 to PLN 20, it is an adequately limit to the average of the European Union, which is doubtful.


To sum up, these changes are essentially to rely on: simplifying invoice corrections on the rule of eliminating confirms, extending the time for exporters and the term for deducting VAT on an ongoing basis to 4 months and also increasing the limit on gifts of small value.

It is worth comparing the foregoing activity of the tax authorities, in the case of correction invoices, where the foregoing problems of entrepreneurs have been based only on tax ruling or case-law in this scope. Many of these issues raised a contradiction between the entity and the tax authorities, and consequently the entity didn’t have a clear and quick answer on the subject. This problem was taken into account, when are constructing the SLIM VAT project, where it is recommended to introduce completely new rules eliminating the abovementioned problems. Is the VAT revolution really significant? The project seems promising, but the answer to the question – is whether it will bring only benefits for entrepreneurs, it will expected in 2021, and the risk of ‘emerging a child from a bath’ – as with any tax project going through the legislative path is always high.