Olga Palczewska-Wielińska, Monika Junyszek

Following the introduction of split payment regulations there are now much fewer types of transactions falling within the reverse charge regulations. Currently reverse charge applies solely to cross-border transactions, being importation of services and intra-Community acquisitions of goods.

Until recently belated receipt of invoices supporting reverse charged transactions proved to be a problem. With changes to the VAT Act which took effect on 1 January 2017, input tax and output tax had, as an additional requirement, to be recognised in the same accounting period so that the subject transactions had to be reported within three months of the tax point. Otherwise the output tax had to be recognised in the month in which tax point occurred while the input tax had to be recognised in the current period. This led to interest on tax arrears.

On 18 March 2021 CJEU ruled in case C-895/19 that the Polish regulations on the treatment of intra-Community acquisitions are incompatible with the VAT Directive as they breach neutrality of VAT. Following the judgement, Poland amended its regulations as part of the SLIM VAT 2 package. However, receiving a timely invoice continues to be very important in those transactions as a delayed invoice may mean the need to adjust your return for the month in which the tax point arose.