Metis Finanse | Spółka doradztwa podatkowego

It should be known that in some accidents we don’t have the right for using the exemption in VAT tax, but we have to register as active VAT taxpayer.

Tax exemption is allowed , when we don’t exceed the limit decribed in art.113 VAT Act. It is common known as exemption due to sale up 200 000 PLN. The exemption is reffering to us as subject doing activity , that means all makig by the company sells transaction (the services and deliveries on Poland teritory) are not taxed with VAT tax.

But sometimes , despite not crossing the limit described in art. 113 VAT Act, we cant use this exemption. Deciding is kind of services and goods which are the subject of transaction. In article 113 paragraph 13 VAT act is strictly described which services and goods in case of being subject of transaction causes that the exemption can’t be allowed. It doesn’t matter that service, listed in legal provision, is in main area of our activity or it is single transaction.

According to above mentioned art.113 VAT act, we can’t use the exemption in case of sales:

services:

law
consulting (despite agriculture consulting connected with cultivation and breeding of plants and animal breeding, and also connected with drawing up a farm management and modernization plan.
jewelery
debt collecting including factoring

goods

mentioned in enlosure no 12 do VAT act: that means products ( also wastes and scraps) from precious metals or with the participation of these metals, amber products, artistic jewellery of more than 100 years of age
taxed with excise duty other than: electrical energy tobacco products, i.e. cigarettes, smoking tobacco, cigars, cigarillos, passenger cars (other than new means of transport) depreciable fixed assets.
wich are building, structure or part thereof, in case , referred to in Article 43 par 1 point 10 letter „a” and „b” of the VAT Act
being building land, i.e. undeveloped land referred to in Article 2(33) of the VAT Act.
being new means of transport , dedicated for transportation persons adn goods with land vehicles, swimming units, aircrafts, to in Article 2(10) of the VAT Act
being cosmetical and toilet classified - classified under PKWiU 20.42.1 -in case making agreement at a distance (e.g. sales via e-shop, via an internet portal)
being computers, electronic and optical products , classified under PKWiU 26
being electric equipement - classified under PKWiU 27 , in case making agreement at a distance (e.g. sales via e-shop, via an internet portal)
being machines and devices other ,not elsewhere classified - classified under PKWiU 28 , in case making agreement at a distance (e.g. sales via e-shop, via an internet portal)
being parts and accessories for motor vehicles (excluding motorcycles) -in case classified under PKWiU 45.3
being parts and accessories for motorcycles) -in case classified under PKWiU 45.4.

In practice it means that making only one transaction including case mentioned in Article 113(13) of the VAT Act determines the obligation of registration as active VAT tax payer and settlement of VAT tax. Importantly, the exemption we use for the whole maked transactions or we don’t use it at all. It is not allowed to use exemption for only a part of transactions, and and pay VAT tax for other part of transactions.

It is worth emphasizing,that only the factical subject of transaction decides about possibility ( or lack of possibility) using the exemption. We do not resisit on indicated during te registration PKD codes. Important is doing ( or not doing) the activity indicated in Article 113(13) of the VAT Act.

Simultaneously it has absolutely no meaning the legal form of business activity (i.e. whether it is a sole proprietorship, limited liability company, limited joint-stock partnership, civil partnership). Only the one thing is important , the company which wants use from the exemption must have their headquarter on Poland territory.

For example, we open our business , which is not allowed to use from subjective exemption (the same which is indicated in Article 113(13) of the VAT Act). In this case from the start of business activity ( despite not crossing the limit) we have to be registered as active VAT tax payer and all transactions must be taxed with appropriate VAT tax rate. None of made by us transaction will be covered by subjective exemption. Even if we make the transaction , which subject will be service or delivery of goods other than indicated in Article 113(13) VAT act, it must be taxed with VAT tax.

In other case we open the activity , which can use from the subject exemption (the other it is indicated in article 113 (13) VAT Act, and after some time we make service or goods delivery indicated in article 113 (13) VAT act. In this case we lose the possibility of using subjective exemption and the loss is for the whole our business activity. Thereby starting from this activity , all transactions of sales we taxed with appropriate vat tax rate. All of them , also this which used earlier . All of them, also these which earlier used from the subjective exemption. In other words , beginning from only once making the activity mentioned in article 113 (13) VAT Act we don’t have the right for using the subjective exemption. But we have the obligation to register as active VAT tax-payer. In this case we can use again from the subjective exemption, but only after defined time and and in case of fulfilling the conditions pointed in the VAT act.

In third case we open our business , and in the area of its activity simultaneously we will make actions which can use from the subjective exemption ( that means other than indicated in article 113 (13) of VAT act ) an acts which can not use from the subjective exumption (indicated in article 113 (13) of the vat act . In this case from the same start of our business (despite non crossing the limit) we have to be registered as active VAT tax payer and we are obligated to tax all transactions by appropriate VAT tax rate.

Joanna Kulpa

Application Factory