Dziennik Gazeta Prawna

The articles discusses how to properly establish for VAT purposes if a payment should be treated as a prepayment or as a payment for a partial supply. This is especially important for VAT because the tax point is different for these two kinds of payment. For prepayment, VAT becomes chargeable on receipt while for a partial supply this is on completion of the stage for which the partial payment was received. Importantly, with partial supplies, the parties should specify that a partial payment is received on completion of each stage and that such a payment is provided for with respect to each stage/part. The VAT Act does not define a prepayment so taxable persons are advised to use the approach of tax authorities as revealed in their private rulings. The authors discuss how the rulings define when a payment should be treated as a prepayment for these purposes.

Rzeczpospolita

This article by WTS&SAJA experts discusses how to properly classify services connected with immovable property and ensure their correct VAT treatment. Based on the Polish VAT Act and case law of the Court of Justice of the European Union, the authors describe the requirements which must be met for a service to be considered connected with immovable property. It is particularly important to properly determine the place of supply of services connected with immovable property because such services are governed by special place of supply regulations under the VAT Act. This in turn affects the determination of which of the parties to the transaction (seller or buyer) must account for VAT in relation to it.

Puls Biznesu

As of 1 January 2017, construction subcontractors have to apply the reverse charge mechanism. Thus, to ensure VAT compliance, both construction service providers and their customers must verify whether the particular service constitutes construction works under the new VAT Act regulations. WTS&Saja explains how to define construction works pursuant to the new law.

Puls Biznesu

Generally, a service becomes chargeable to tax when completed. However, there are doubts when that may be if the service is provided for a long time or in stages. Based on tax rulings, the authors explain that whether or not a service is deemed completed depends on its nature. And the nature (and hence completion date) can in turn depend on the kind of contract between the parties or the law applicable to provision of services of this kind. Where there is no specific agreement or law to apply, a service should be deemed completed when the last activity of the given part/stage of the service has been performed.

Rzeczpospolita

WTS&SAJA experts answer a reader's question on whether any VAT applies when you withdraw a car from your business to be used for your personal purposes. Referring to the VAT Act, the experts explained that this particular case should be seen in light of two scenarios. One is that the reader purchased the car as a private person not in business and then made the car an asset of her business which she took up after the purchase. In this scenario she did not have the right of deduction with respect to VAT charged to her on the purchase so she would not be required to apply VAT when withdrawing the car from business use, either. With reference to the other scenario, the authors explain that the case is completely different if the reader bought the car in business while being a taxable person for VAT purposes. In that case she did have the right of deduction and, even if she ultimately did not exercise that right, her withdrawal of the car from business use will be taxed for VAT purposes.

Puls Biznesu

This article discusses composite supplies and how they should be treated under the VAT Act. There being no detailed regulation on the subject, the authors refer to the courts and the tax administration case practice on when a supply can be considered composite. A composite supply is taxed in whole at a single VAT rate applicable to its principal supply element. The article also shows examples of wrong classification of transactions as composite supplies.

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