On July 1, 2023, the regulations introduced by the so-called Slim VAT 3 package came into force. The aim of the package is to further simplify the regulations applicable to VAT settlements.

Has it been successful? We discuss below.

According to the VAT Law, a taxpayer issuing an invoice may issue it for an amount in any foreign currency. However, the amount that constitutes the taxable amount for VAT and the amount of VAT due must be expressed in Polish zlotys (PLN). Article 31a (1) indicates that the conversion into Polish zlotys is made according to the average exchange rate of the foreign currency in question announced by the National Bank of Poland on the last business day preceding the day on which the tax obligation arises (on the day the goods are delivered or the services are performed). In the case of an invoice issued before the date on which the tax obligation arises, the exchange rate on the last business day preceding the date of issuance of the invoice is adopted.

Previous regulations

Before the introduction of Slim VAT 3, it was problematic to convert amounts in the case of corrective invoices. The VAT Law did not clearly specify on which day the taxpayer was to adopt the foreign currency exchange rate. Nevertheless, it was accepted that in the case of a correction of an invoice issued before the tax liability arose, the exchange rate from the last business day preceding the issuance of the original invoice was used, and in the case of an invoice issued after the tax liability arose, the exchange rate from the last business day preceding the day on which the tax liability arose.

Amendment

The new Slim VAT 3 regulations have settled this issue. As we mentioned above, the rules for converting invoices issued in foreign currency were not regulated before the introduction of the Slim VAT 3 package. Taxpayers converted exchange rates according to the accepted line of interpretation. As we can see now, the new regulations confirm the practice followed so far.

According to newly amended Article 31b, for in-plus and in-minus invoices adjusted regardless of the reason, the exchange rate originally adopted is used. On the other hand, for the correction of omnibus invoices, the average exchange rate of the National Bank of Poland (NBP) from the last working day preceding the day of issuance of the correction invoice is adopted. It is worth mentioning that this was the practice before the new regulations.

In the case of cumulative correction invoices during the period of intra-community acquisition of goods, the practice used for ordinary corrections of cumulative invoices is replicated and therefore taxpayers are obliged to use the average exchange rate of the National Bank of Poland on the last working day preceding the date of issuance of the correction invoice.