Preparing for Poland’s New JPK_VAT Structure

We recently reported the Polish government’s decision to delay introduction of the new JPK_VAT  with a declaration structure until 1 July 2020. This move is part of the country’s Tarcza antykryzysowa (“Anti-Crisis Shield”) initiative to support business during the coronavirus pandemic and gives welcome extra preparation time especially as the Ministry of Finance only recently published the finalised schema and explanatory guidance.

Given the extension, now is a good time to recap some of the main features and the surrounding compliance regime.

Scope

New JPK_VAT is a periodic filing combining the current JPK_VAT single audit file and VAT-7M (monthly) and VAT-7K (quarterly) VAT returns within one document.  It has the same deadline as the current separate submissions of 25^th of the month following period end. Taxpayers filing quarterly will also need to submit a monthly registration part. JPK_VAT will not include any other periodic VAT filings (e.g. VIES declarations, which still need to be submitted separately using form VAT-UE).  Businesses should ensure their compliance processes are organised to reflect the change.

Additional data

The new JPK_VAT requires additional data to that currently collected in the separate declarations. For example, sales records will need to include indicator codes specifying certain types of goods and services, transaction types, and proof of sales. Purchase records will need to include tags specifying proof of purchase, along with tags for transactions subject to specific procedures, e.g. goods imports and split payment. For example, the marking ‘MPP’ should be applied to any invoice documenting a split payment transaction (any categorised in Article 15 of the Polish VAT Act) with a VAT-inclusive value of over PLN 15,000; this invoice is recorded in the MPP field within JPK_VAT. Such marking and recording helps make audits more efficient for the tax authority, but businesses should review their invoice content requirements and align AR, invoicing and reporting personnel to minimise errors.

 Penalties

It was originally intended that a financial penalty would apply to any mistake found within a submitted JPK_VAT file. The Ministry of Finance has recently confirmed that penalties will instead be applied on a discretionary basis, subject to appeal. This suggests minor discrepancies won’t necessarily incur a fine if they don’t result in material risk to VAT payments by the taxpayer or by its immediate suppliers or customers.

Corrections

The most recent guidance states that corrections to declarations submitted in the previous and now replaced JPK_VAT and VAT-7 formats should also be reported in the same way. For the new JPK_VAT structure, only the part requiring correction must be completed. The correcting document must include all transactional data for the period being adjusted, not just the data requiring correction.

From which VAT declaration periods does new JPK_VAT start?

The most recent guidance states the new report is required “by all registered as active taxpayers for the periods from 1 July 2020.”  It later reads “for periods from 1 July 2020, it will not be possible to submit VAT-7M and VAT-7K declarations and records other than in the form of the new JPK_VAT.”  These two statements indicate that the first mandatory new JPK_VAT submission will be the JPK_VAT7M for the month of July 2020, due no later than 25 August 2020.