Izba Gospodarcza
Janusz Tunkiewicz
+48 22 653 35 57

A number of changes pertaining to VAT, CIT and PIT

Several amendments to the VAT Act entered into force on 1 January 2011, thus jointly constituting the greatest change of the said tax since 2004.

From 1 January 2011 the basic tax rate amounts to 23% and the reduced rates amount to 8% and 5%, respectively. The long-term plan provides for further increases in the VAT rates, if the level of public debt of Poland exceeds the so-called prudential threshold of 55%. Due to the change of the VAT rates, several interim provisions have been introduced that regulate the rules of transition to the new rates and the ultimate return to the VAT rates applicable at the end of 2010.
Pursuant to the adopted amendment, the Polish Classification of Products andServices (Polska Klasyfikacja Wyrobów i Usług -PKWiU) of 1997 will nolonger be used for VAT purposes, being replaced with the PKWiU of 2008.Due to the significant differences between the two classifications, in order todetermine the correct VAT rate for a given product or service, it is necessaryto verify the practices applied so far.
The appendix number 4 to the Act -including the list of exemptions -has been deleted and the said list has been deleted and the said list has been included directly in Article 43 of the VAT Act. It should be pointed out that the scope of many exemptions has been modified, thus it is necessary to verify the practices applied so far.
New rules have been introduced with regard to the settlement of gratuitous delivery of goods and gratuitous provision of services.
The changes in the VAT Act have introduced new regulations with respect to the manner of specification of the right to deduct VAT charges in relation to the purchase of a real property used within the scope of the conducted business activity and for private purposes.
The changes in the regulations provide that from 1 January 2011 until the end of 2012 purchasers and lessees of passenger cars equipped with a cargo partition, who until the end of 2010 had the right to a full deduction of tax, will be permitted to deduct only 60% of the VAT amount, and not more than 6,000 zlotys. Moreover, deduction of tax on purchased fuel for such cars will no longer be possible. This applies also to vehicles purchased on the previous, favourable terms.

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