Poland’s Departure from the Traditional VAT Return

Casper Winkelman
December 4, 2019

In Europe, Poland seems to be the first country to move away from the traditional VAT return replacing it with a detailed Standard Audit File for Tax (SAF-T). This is basically an expansion of the SAF-T system already used in Poland since 2016. Large enterprises must start working with the expanded SAF-T system from April 2020, and from July 2020 it will be mandatory for all taxpayers in Poland.  Failure to submit or report wrong information will result in high penalties.  Clearly this increased VAT reporting requirement is putting further tax compliance pressure on companies who must prepare for this big change.

The SAF-T in Poland is called JPK (Jednolity Plik Kontrolny).  The current SAF-T system became mandatory on 1 July 2016 for large businesses and since 2018 for all taxpayers in Poland.  Under the current requirements, all VAT registered businesses in Poland need to submit monthly SAF-T reports (called JPK_VAT) and simultaneously monthly (or quarterly) VAT returns.  The current JPK_VAT should include all information concerning transactions included in records kept for VAT purposes and needs to be submitted in a specific xml format to the tax authorities.  The current VAT return contains sums of values of various kinds of transaction as well as the total VAT to be paid, refunded or carried forward to the next period.  In addition to these periodical submission requirements, businesses must also be ready to transfer various accounting JPK structures at the request of tax authorities during tax proceedings, verification activities and audits. This includes the following JPK structures:

  • JPK_KR, which includes data from the main trial balance and general ledger journal
  • JPK_WB, which includes bank statement balances along with detailed records from the taxpayer’s accounts
  • JPK_MAG, which includes receipts, release and internal movement transactions information
  • JPK_FA, used for reporting information concerning sale invoices for a given period
  • JPK_PKPIR to record tax revenue and expense ledger
  • JPK_EWP to record revenues.

What’s changing in 2020?

In the new system the current  JPK_VAT and VAT return will be replaced by an enhanced JPK_VAT structure called JPK_VDEK (although this is a working title potentially subject to change). 

This will be a periodical filing requirement and should include all information already covered by the combination of the current JPK_VAT and the VAT return.  Basically, new fields are added to the existing JPK_VAT file with company VAT return information. The authorities explained that the information in this new version SAF-T for VAT is enough to meet all periodic data requirements.  The simplification is that it eliminates attachments that are currently required when submitting a traditional VAT return (i.e. VAT-7, VAT-7K, VAT-ZZ, VAT-ZD and VAT-ZT).

However, the new JPK_VDEK is not only a simplifcation. It also introduces additional reporting obligations.  Such as  a requirement for additional settlement data across a variety of specific transaction types and the introduction of a series of markings (codes) making it easier to identify transactions in certain types of goods and services (i.e. additional fields that are aimed at increasing the precision of analysis carried out by the tax authorities).

Like the current JPK_VAT and VAT return, the new JPK_VDEK is tax information which needs to be submitted to the tax authorities on a periodical basis. (Taxpayers filing monthly will submit version JPK_VAT7M, whilst those filing quarterly will instead submit version JPK_VAT7K).   Accordingly, failure to meet submission deadlines and/or report wrong information may result in penalties for every error the new file contains.  The Polish tax authorities have proven to be very strict on content requirements and apply penalties on any missing obligation. Also, the number of tax audits using SAF-T has increased substantially since the introduction of the SAF-T system. 

In summary, it is crucial for businesses to adapt to this expanded electronic tax reporting system as soon as possible – not only to meet the deadline for the new SAF-T report for VAT, but also to meet the increasing requests for the additional accounting SAF-T reports.

Take Action

To find out more about what we believe the future holds, download Trends: e-invoicing compliance and follow us on LinkedIn and Twitter to keep up-to-date with regulatory news and other updates.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Casper Winkelman

Casper is responsible for building out and managing the VAT line of products and solutions available on the Sovos Intelligent Compliance cloud platform. Casper is a tax lawyer with over 20 years of international VAT experience, beginning his career as a consultant for Arthur Andersen and before serving as VAT director for KPNQwest, a Pan-European telecommunication company. Casper also co-founded VAT Resource, a successful VAT services company that was acquired by Sovos 2014. Casper holds a master’s degree in tax law from the University of Leiden, The Netherlands.
Share This Post

LATAM VAT & Fiscal Reporting
May 20, 2020
Sovos Acquires Taxweb, Extends Tax Determination Capabilities in World’s Most Challenging Compliance Landscape

Earlier this month Sovos announced its second acquisition of 2020, completing our solution for Brazil with an unparalleled offering that solves tax compliance in the place where it is most challenging to do so.  Too many companies doing business in Brazil have been burdened by managing multiple point solutions for continuous transaction controls (CTCs), tax […]

Tax Compliance Tax Information Reporting United States
June 1, 2020
The Advantage of a Cloud-First Company

As Sovos continues to expand our technology and service offerings we will always prioritize operating in the cloud before any other means. Sovos’s SaaS and Security Strategy  Sovos at its core is a Software as a Service (SaaS) and cloud-first company. This means that as Sovos continues to expand our technology and service offerings we […]

ShipCompliant United States
May 28, 2020
Ask Alex: Your Bev Alc Compliance Questions Answered (May 2020)

  Do you have questions about the rules, regulations, and compliance requirements of the beverage alcohol industry? This series, Ask Alex, is a perfect opportunity to get those pressing questions answered straight from one of the industry’s regulation and market experts, Alex Koral, Senior Regulation Counsel, Sovos ShipCompliant.  To take advantage of this opportunity and […]

E-Invoicing Compliance EMEA
May 28, 2020
Turkey’s Transition Conditions for E-ledger

On October 19, 2019, the Turkish Revenue Administration (TRA) published a communique making the e-ledger application mandatory for e-invoice users, companies subject to an independent audit, and companies identified by the Presidency to have poor tax compliance.  The e-ledger application enables businesses to create the legally mandated general journals and ledgers and submit e-ledger summary […]

ShipCompliant United States
May 27, 2020
How Technology Partnerships Improve DtC Compliance

To be an expert, one has a specialty. Ours is beverage alcohol compliance. Since compliance sits at the heart of operations, being connected at every step helps our customers focus on their business instead spending countless hours on manual processes. Compliance is challenging, but we make it easier with a large and robust network of […]

EMEA IPT Tax Compliance
May 26, 2020
Why IPT Reporting is so Complex for Insurers

Accurately calculating insurance premium tax (IPT) for reporting can be complex.  And the ramifications of getting it wrong can be far reaching from impacting profit margins to unwelcome audits, fines and damage to your company’s reputation in the market and with customers. Calculation methods When I speak to customers about how they calculate insurance premium […]