POLAND: COVID-19 VAT IMPLICATIONS
POLAND – update 16th June
Online medical consultations are not always exempt from VAT
The latest tax interpretation confirms that the VAT exemption may apply to services that are of a diagnostic or therapeutic nature. They must be used to prevent, preserve, save, restore and improve health. If the benefit consists of only providing certain advice, you will have to tax it. Therefore, the goal of the consultation counts.
The coronavirus outbreak has meant that many services are now being used in electronic, online form. Increasingly, this applies to medical consultations. In cases where it is not necessary to study in the office, you can talk to your doctor remotely, by phone or using various types of internet applications. However, the question arises whether online medical consultations via the internet should be exempt from VAT, as well stationary medical care services.This issue was the subject of interpretation of the director of the National Treasury Information of May 29 this year, No. 0114-KDIP4-2.4012.122.2020.3.KS .
Exemption only for certain medical services
The Treasury reminded that only medical care services for the prevention, preservation, rescue, restoration and improvement of health provided as part of the profession are exempt from VAT:
- doctor and dentist
- midwife and nurse
- medical
- psychologist
The condition for applying the VAT exemption is, therefore, a combination of two conditions. They result from art. 43 paragraph 1 point 19 of the VAT Act.
First , premises of a subject-related nature regarding the type of services rendered, i.e. medical care services for the prevention, preservation, rescue, restoration and improvement of health. Secondly , premises of a subjective nature, referring to the service provider, which must be a medical entity or a person practicing the profession of a doctor, dentist, nurse, midwife, psychologist or other medical profession within the meaning of art. 2 clause 1 point 2 of the Act on medical activities. It means a person authorized under separate provisions to provide health services and a person possessing the acquisition of professional qualifications to provide health services in a specific scope or in a specific field of medicine.
The purpose of the medical service counts
The tax authority emphasized that to determine the right to be exempt from VAT, it is fundamental to examine the purpose of a given service to the patient. The Treasury pointed out that not all medical services undertaken for the patient are aimed at preserving, saving, restoring and improving his health. This causes some complications and interpretation problems. Especially since the definition of medical care was not included in national or Community tax regulations.
Medical care and medical care benefits have been defined by the Court of Justice of the European Union on several occasions. It is apparent from the judgment in Case C-106/5 that these terms refer to services which serve the purpose of diagnosis, care and, as far as possible, treatment of diseases or health disorders. The director of KIS therefore stated that it is the purpose of the medical service that determines whether it should benefit from the exemption. If the context implies that its primary purpose is not to protect health, including maintaining or restoring it, but rather to provide advice required before a decision with legal consequences is taken, then the dismissal will not apply. In the opinion of the treasury, in order to be subject to exemption, the benefit should have a therapeutic purpose.
Form of communication between the doctor and the patient, irrelevant to VAT
Sylwia Lubelczyk, a legal advisor from the VAT proceedings team at GWW, confirms that the right to benefit from VAT exemption therefore depends on the purpose of the service provided to the patient. It points out that the type of means of communication by which a given medical consultation is given does not prejudge the exemption from VAT. – The online platform is only a tool that can be used to provide a service aimed at preserving, saving, restoring and improving the health of patients – indicates the expert. So, regardless of whether the medical consultation will be provided online or stationary, it must be provided by a doctor, dentist, nurse, midwife, person of another medical profession or psychologist to be subject to VAT exemption. As the expert adds, to prove the right to dismissal, it is always important to document that the medical consultation – although it was provided online – was individualized and directed to a specific patient, and was not only a general answer to questions in the field of medicine. It must also be proven that its purpose was to provide the patient with a diagnosis, to provide medical assistance and, to the extent possible, to treat illnesses or health disorders.
Changing the treasury approach
Robert Smoczyński, legal advisor, partner at TLA, emphasizes that the method of communication used to provide services cannot be a circumstance excluding a given service from the group of those exempt from VAT. However, the expert reminds that earlier interpretations of tax authorities have not always confirmed the right to exempt online medical services. For example, the director of the Tax Chamber in Łódź in an individual interpretation of August 11, 2015, No. IPTPP1 / 4512-263 / 15-4 / IG , acknowledged ( despite the courts have stated otherwise ) that you cannot provide medical care services without careful examination of the person, their observation and care over them in the process of medical activities, and this – according to the director there are basic conditions defining these services.
Source Credit – Prawo.pl
POLAND – update 2nd June
Hand sanitizers taxed 8% VAT rate
The company that is the producer of the liquid for hygienic hand disinfection applied for interpretation. It was a biocide with strong bactericidal, fungicidal and virucidal properties. Its intended use has been confirmed by an entry in the Register of Biocidal Products kept by the President of the Office for Registration of Medicinal Products for Medical Devices and Biocidal Products.
VAT rate for disinfectants
According to the statistical classification made by the taxpayer, this product had to be classified in PKWiU 2008 grouping under the number 20.20.14.0 “Disinfectants”. The VAT Act provides for such grouping an 8% rate. (Annex 3, item 83), however, the reduced rate does not apply to all products but only to preparations which apply only in healthcare , for which a provisional authorization has been issued or an entry in the register of biocidal products within the meaning of the Biocidal Products Act .
The measure must serve to protect health
Remigiusz Fijak, tax advisor, senior manager at TPA Poland, explains that the key issue here was whether the hand disinfectant was used “only in healthcare”. The expert notes that the VAT Act does not define the concept of “in health care”, however, the interpretative body in the interpretation of 19 May this year, No. 0114-KDIP1-2.4012.149.2020.1.RD , referring to the definitions contained in the Dictionary of the Polish Language , decided that the preparations must be intended to protect living organisms against something that is detrimental to their proper functioning .
The director of KIS also pointed out that the purpose of selling funds is important. It’s about exclusive use in health care. It is also not necessary for the preparations to be used only by healthcare providers (e.g. clinics, treatment rooms, dental, cosmetics, pharmaceutical wholesalers).
Therefore, it should be recognized that recently very popular hand disinfection fluids with bactericidal, fungicidal and virucidal properties, also intended for home use, not professional (e.g. in hospitals, medical offices) can benefit from the 8-percent rate . VAT, because they serve health protection, provided that their operation will be confirmed by their entry in the register of biocidal products or obtaining a temporary authorization – emphasizes Remigiusz Fijak.
Monika Brzostowska, a tax advisor at the KiB law office, also explains that in item 83 of Annex 3 to the VAT Act, only disinfectant preparations with bactericidal, fungicidal and virucidal properties are applicable, which apply only in healthcare, for which a temporary permit was issued or entry in the Register for Biocidal Products within the meaning of the Act on Biocidal Products, contained in PKWiU 2008 ex 20.20.14.0.
So to take advantage of 8% VAT rates for disinfectants, four cumulative conditions must be met. The product must be a disinfectant with bactericidal, fungicidal and virucidal properties, which includes PKWiU 2008 ex 20.20.14.0. It must apply in healthcare and have the necessary authorization or entry in the relevant register. As Monika Brzostowska explains, in connection with the ongoing epidemic of coronavirus, taxpayers who supply disinfectants that meet the criteria may benefit from a preferential VAT rate.
Source Credit – Prawo
POLAND – update 28th May
Postponement of submission of electronic VAT registers
Mandatory electronic VAT cash registers have been delayed to 31 December 2020 for catering, accommodation and fuel sectors. Other sectors have been postponed until 30 June 2021.
Source Credit – Richard Asquith – (Avalara)
POLAND – update 6th May
Poland Publishes Regulation on Reduced VAT Rates Due to COVID-19
Poland has published the Regulation of 24 April 2020 in the Official Gazette on the reduction of VAT rate for certain goods and services in relation to the COVID-19 pandemic.
This includes a 0% VAT rate on the supply and import of certain medical products to combat the effects of the pandemic, which applies until the state of emergency for COVID-19 is cancelled.
A temporary reduced 8% VAT rate is also provided until 30 June 2020 on supplies of disinfectants with bactericidal, fungicidal, and virucidal properties in healthcare.
Source Credit – Orbitax
POLAND – update 28th April
Anti-crisis shield 2.0: Reduced VAT rate (0%) for laptop/tablet donations
The reduced 0% VAT rate applies to free delivery of laptops and tablets up to June 30, 2020 to:
- Educational establishments,
- Humanitarian, charitable or educational organizations and the operator of the National Education Network for further free transfer to educational institutions,
- Authorities running educational establishments for the purpose of further free transfer to conducted educational establishments.
Source Credit – Deliotte
POLAND – update 23rd April
VAT relief for school equipment: 0% VAT rate for free delivery of computer hardware in the form of portable computers such as laptops and tablets
The Education Ministry has summarised the government’s actions during the pandemic. These have included an internet platform for learning epodreczniki.pl, additional money for the purchase of computers, VAT relief for school equipment, free internet services and training for teachers.
Due to the coronavirus epidemic, full-time classes in public and private schools and kindergartens have been suspended, at first until March 25, then the suspension was extended to April 10. Last week, the suspension of stationary classes was further extended by two weeks – until April 26. From March 25, schools are required to use e-teaching.
The Ministry invites everyone to use its platform www.epodreczniki.pl
There are over 6,000 educational materials on the platform intended for all stages of education. Almost all teaching materials contain open-ended questions or interactive exercises. You can also find curricula and lesson plans, additional e-materials for use in school or for a pupil’s independent study and links to external resources.
Additionally, materials and information useful for schools in conducting distance learning are published on the platform, including guide for schools on distance education.
The Ministry has said that they will offer tax relief to business entities which engage in the donation of computer equipment to educational institutions.
It was stated that this solution implies a 0% VAT rate for free delivery of computer hardware in the form of portable computers such as laptops and tablets.
Source Credit – Poland IN
POLAND – update 17th April
Update of the JPK_VAT information brochure
On April 15, 2020, an updated information brochure regarding JPK_VAT with a declaration was published on the website podatki.gov.pl . The changes are related to the postponement to July 1 this year. the date of entry into force of the new JPK_VAT with the declaration (JPK_V7K and JPK_V7M) in relation to the so-called large entrepreneurs – as part of the Anti-Crisis Shield.
Source Credit – gov. pl
POLAND – update 15th April
Anti-crisis shield: more solutions for entrepreneurs
During a press conference on 8th April 2020, the government presented further solutions to support entrepreneurs during the crisis caused by the coronavirus pandemic. At the same time, works are underway on further changes to the “Crisis Shield”, extending the types of support for beneficiaries.
Source Credit – Deliotte
POLAND – update 7th April
0% VAT rate applicable on medical devices and medicinal products such as disinfectants, masks and protective suits
Products manufactured or bought by companies transferred to fight the coronavirus were subject to a “zero” VAT rate. This applies to in medical devices and medicinal products such as disinfectants, masks and protective suits.
Source Credit – Polish Government
POLAND – Update 31st March
- Possibility of retroactive settlement of tax loss incurred in 2020 and utilization of this loss against taxable income generated in 2019 (up to certain limits);
- Possibility to opt out from simplified CIT advances and calculate advances based on the actual, current results (for small taxpayers only);
- Possibility of decreasing the CIT base by the donations made to specific entities for the purpose of prevention of COVID -19 .
- Possibility of quicker release of funds from VAT split payment account to regular bank account of the taxpayer.
- Deadlines / procedures
Extension of the deadlines
- e.g. for
( i) filing CIT -8 (annual tax return) and payment of annual CIT liability for 2019;
(ii) filing certain reporting forms related to withholding tax
( iii) reporting under the Mandatory Disclosure Rules;
( i v) certain accounting obligations (including preparation and approval of the annual financial statements);
(v) reporting to the tax authorities of the payments made to the bank accounts not listed on the so -called ‘white list’; − No extension fees should be charged from the taxpayers in connection with the application for deferral of their on -going tax payments (e.g. monthly VAT payments);
- Suspension of collection of taxes / advance tax payments from entities acting as tax remitters;
- Suspension of monthly CIT advance payments (subject to certain conditions, including decrease in taxable revenue for the respective months);
- Lack of start / suspension of the certain deadlines in tax procedures (including court proceedings; tax controls; fiscal criminal proceedings etc.);
- Postponement of the application of the Retail Sales Tax Act (specific form of taxation of sales in large area malls).
Source Link here
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