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Poland ‘SLIM’ VAT plans for 2021

Poland has become the latest country to introduce a simple, local and modern (‘SLIM’) VAT initiative. The Polish measures, to be implemented in early 2021, announced include:

  • Advance payments on exports may benefit from zero rating if the goods are shipped up to six months after the payment. Currently the limit is two months.
  • Exchange rates on VAT transactions may be harmonised with the corporate income tax FX rules.
  • Input VAT on purchases may be deducted up to 4 months after the transaction instead of the current 2 months
  • The VAT-free gift allowance is to be raised from PLN 10 to PLN 20
  • For correction invoices where the taxable amount is lowered (‘in minus’), the supplier need only obtain documentary proof of the customer’s agreement to the change. Currently, the supplier must have evidence that the correcting invoice was delivered to the customer and wait for delivery.
  • For correction invoices where the taxable amount is raised (‘in plus’), it will be permitted in the same VAT reporting period as the original invoice.
  • Simplifying VAT payments will be possible through the use of electronic receipts and invoices, and online cash registers.
  • Changes to VAT deductions on accommodation services purchased for resale

SLIM VAT features

SLIM VAT systems were conceived for developing countries seeking to implement or update their VAT regime. Angola’s SLIM VAT system was introduced in 2019. The common features of SLIM VAT initiative include:

  • Simple, as it should establish a broad scope for the tax, with a reduced number of exemptions and with simplified tax calculations
  • Local, as it should be suitable for the adopting country’s national reality and socio-economic context
  • Modern, as it should have a digital component and it should follow the international best practices in dealing with tax fraud and evasion

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