Puls Biznesu

The article discusses how to correctly apply the white list provisions of VAT law in the context of the split payment mechanism. While the white list and the split payment mechanism two are different concepts, their mutual similarities may sometimes confuse businesses. The authors present the most important characteristics of the two devices. In addition, they also describe each stage of the verification process to be applied in order to ensure compliance with the underlying requirements and avoid various adverse consequences arising from the related regulations.

Rzeczpospolita

As of 1 January 2018,  borrowing costs are not deductible for income tax purposes to the extent exceeding borrowing costs are more than 30% of what is called tax EBITDA, subject to a safe harbour of PLN 3 million. The article is about requirements related to adjusting borrowing costs on account of exchange differences realised on repayment of the underlying currency debt. According to the authors, with respect to borrowing costs subject to those restrictions, when making f/x adjustments in case of currency debt repayment, taxpayers should ensure that the resulting f/x gains are deducted from while f/x losses are added to the borrowing costs.

Puls Biznesu

Specifying when VAT becomes chargeable in the case of construction services may sometimes be controversial given their specificity. Under CJEU's decision of 2 May 2019 (C-224/18), signature of a formal record of acceptance (handover certificate) marks the time when construction services are considered to be completed, if the contract so provides. However, what if no handover certificate is executed as the work has defects or has only been completed partially? According to tax authorities, work that has been performed but not formally accepted  should be subject to VAT even though no payment has been received for it and the matter is in a civil court. The taxable person claimed otherwise. The administrative court decided in favour of the taxable person and ruled that VAT did not become chargeable and it will not be until the matter of payment is resolved by the civil court that the nature of the claims and the taxable amount becomes known. VAT will become chargeable on receipt thereof.

Rzeczpospolita

The article addresses the VAT treatment of advance payments. It describes controversies about how to recognise an advance payment and the supporting invoice if the payment has been received more than 30 days after the invoice date. There have been recent tax rulings which, favourably for businesses, offer assurance against claims that such premature invoices are "empty". However, in fear of penalties, taxable persons adjust their accounts and recognise such invoices despite lack of a commercial rationale. With no precise law in place to regulate the duties and methods related to making adjustments on account of premature invoices for advance payments, whether or not any particular treatment is correct will depend on the approach of tax authorities.

Rzeczpospolita

The article discusses recovery of VAT charged on employer's purchases of various things for its employees, such as fruits, bread & pastries, juices or cold cuts. According to tax authorities, such purchases do not involve expenses that would be associated with taxable transactions, which means that the employer is not entitled to deduct VAT charged on them. They claim that supplies of such products to employees are intended merely for their personal needs. The article mentions also other purchases made by employers for their employees.

Rzeczpospolita

The article discusses the taxation of benefits for travelling employees (e.g. accommodation, transportation). There is no doubt that they do not represent income for employees on business trips or for mobile staff. However, both tax authorities and courts distinguish also a third group of employees that are neither mobile staff nor employees on business trips. In effect, such employees may be held to earn additional income represented by travel expenses paid for them by their employers.

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