Reverse charge and other changes introduced by the Act amending the Act on Enforcement Proceedings in Administration
Certain changes are going to be introduced by the Act of 9 March 2023 amending the Act on Enforcement Proceedings in Administration and some other acts. The changes apply, without limitation, to the value added tax and provisions of the Tax Code. The act is planned to take effect (with certain exceptions) on 25 March 2024.
Reverse charge for the supply of gas, electricity and emission allowances
In the period of 1 April 2023 to 28 February 2025 the reverse charge mechanism will be in force for the tax on gas in the gas system, electricity in the power system and services of transfer of emission allowances. According to the regulations, the VAT obligation rests with the buyer or the service recipient of said goods, provided that they meet three requirements.
With respect to the transactions in question, the legislator provided that the buyer and the supplier must have the status of a VAT payer in case of supply of gas or electricity or provision of the service of emission allowance transfer, while in case of the supply of gas or electricity, the taxpayer’s main activity with respect to the purchase of gas or electricity is to consist of resale, with the consumption being insignificant. Moreover, the sales made by the supplier or service provider must not be exempt under Art. 113 (1) and (9) of the VAT Act.
Additionally, for the reverse charge to apply, the supply of goods or provision of services regarding the transfer of emission allowances must be made directly or through an authorized entity at:
- a commodity exchange within the meaning of the commodity exchange legislation,
- a regulated market or an organised trading facility (OTF) within the meaning of the Act on Financial Instrument Trading.
The Polish law had provided for the reverse charge mechanism in the past, but the regulations were repealed in November 2019. The purpose of the solution is to enhance the competitive advantage of the Polish exchange system.
Changes to the Tax Code
According to Art. 259 of the Tax Code in its current wording, the decision to defer payment of tax or tax arrears and spreading them into installments shall expire if payment is not made on due dates of three consecutive instalments into which the tax or tax arrears were spread. According to the amended provisions (to be moved to Art. 67da), the decision on spreading the payment into installments shall expire in case of failure to pay three instalments even if they are not consecutive instalments.
Moreover, Art. 220 will be extended to include §3, which shall read as follows: “An appeal against a decision issued by the head of customs & tax office shall be recognized by the head of the fiscal administration chamber competent over the location of the head of the customs & tax office who issued the decision.” This change means that an appeal will be made to the head of the fiscal administration chamber who also supervises the customs & tax office. With this solution, appeal proceedings will finally have a two-instance character. This provision shall come into force on 1 July 2023.
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