Submission of VAT and CIT returns in March 2020 – a few tips

Tax
  • On Friday, 13 March 2020, the Polish Government announced the state of epidemic emergency, which is expected to last from the date of the announcement for the following two weeks. The state of emergency may be further extended.
  • During this time, entrepreneurs are facing two important tax deadlines: 25 March – the deadline for submitting VAT returns and SAF-T (JPK_VAT) files and 31 March – the deadline for submitting CIT-8, IFT, MDR-3 and ORD-U declarations/informations.
  • The government encourages entrepreneurs to submit applications for extending the deadline for tax payment. At the same time, the Government has not announced any extension of the deadline for submitting of the declaration and preparation of the financial statements.

Below we present the advice of tax reporting experts from the Arena Tax team on how to prepare for this process, in order to successfully file the tax return on time.

 

1. Planning is paramount

As a first step, we recommend making sure what information is needed to prepare the declaration – this can be done based on the previous declarations.

Also, the knowledge about which people need to be involved in the process (e.g. people providing information from ERP systems, people who should accept the calculation or parts of it) is going to be necessary.

If the employees have switched to remote work, it should be verified whether the key people have the access to the infrastructure enabling retrieving data from the systems (e.g. VPN – a programme to connect to the company’s internal network during remote work).

Implementing applications that help to effectively manage projects (e.g. Asana, Trello, Microsoft Teams – many business applications have free trial versions) can be considered.

The planning stage should be considered completed at the moment when an action plan is established – specific tasks are assigned to specific people and a communication process is defined, allowing to control the progress of work and to quickly address problems.

2. Implement the minimum plan

If the access to information and key people is limited, it will be useful to consider what minimum steps can be taken to meet the basic tax obligations.

In this respect, it may turn out that most of the data is available, but some statements are unavailable (e.g. it is not possible to verify whether contractors have confirmed receipt of invoices reducing the output VAT because the people who maintain such statements are unavailable).

In such a situation, it is worth talking to a tax advisor and considering implementing an approach that will be as compliant as possible with the regulations and secure the position of the entrepreneur before the tax authorities.

It should also be considered that the submitted declarations may be corrected in the future.

 

3. Digital submission

As most entrepreneurs are required to submit a digital declaration, it is worth verifying whether the people holding an electronic signature have an up-to-date authorisation (power of attorney) UPL-1.

If the people with UPL-1 power of attorney are not available – Board Members or proxies may authorise additional persons to submit declarations using the E-PUAP portal.

Supplementary authorisations should be sent to the tax office as early as in the week 16-20 March, as it takes the tax offices about a week to process them.

In addition, tax returns and SAF-T files should be submitted electronically on computers with Polish regional settings (this is particularly important when submitting CIT-8 returns, as they contain Polish diacritic symbols).

4. The payment of tax

If due unforeseen reasons you are not able to pay the tax on time, it is possible to submit a request for deferment of tax payment pursuant to Article 67a of the Tax Ordinance.

According to this provision, due to an important interest of the taxpayer or an important public interest, the tax office may postpone the deadline for tax payment or enable the payment of the tax in instalments at the taxpayer’s request. The application should be submitted to the tax office before the deadline for the tax payment.

The disadvantage of this solution is that the granted deferral may be treated as public aid (therefore, you may not be able to take advantage of other forms of aid in the future – e.g. National Training Fund, Cohesion Fund subsidies). The deferral is also subject to a late-payment fee (4% of the value of the of the obligation per year).

In this respect, work is also under way on preferential treatment of entrepreneurs who have suffered from the introduction of the epidemic state of emergency – on the basis of the so-called shielding act, which is being proceeded  in the Parliament, the deferral of tax payment or its spreading in instalments would be exempt from the late-payment fee.

As announced by the Minister Jadwiga Emilewicz, this solution is going to be available only to entrepreneurs who are going prove a good financial situation at the end of the previous year and then demonstrate its deterioration in the current period, especially due to restrictions introduced by the Government.

Therefore, not all entrepreneurs will be able to take advantage of this preference.

5. Additional obligations

We recommend checking other reporting obligations in the nearest future:

  • Financial statements for 2019 – should be prepared by 31 March 2020.
  • MDR – 3 for 2019. – information regarding tax schemes – with the deadline for submission to the tax office by 31 March 2020.
  • IFT-2R – withholding tax information – should be submitted to the tax office and sent to contractors by 31 March 2020.
  • ORD-U – information on agreements concluded with non-residents – should be submitted by 31 March 2020.

The presented list concerns basic reporting obligations. Irrespective of them, you should verify which additional obligations you are subject to (e.g. Social Insurance Institution (ZUS) obligations, Disabled Persons Rehabilitation Fund (PFRON), public statistics, excise duty).

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The Arena Tax team of tax reporting experts will support you in decisions and choices related to submission of CIT and VAT returns in March 2020.

We declare our assistance especially in the following areas:

  • Preparation of calculations and CIT and VAT returns, JPK files,
  • Advice on the process of management of the preparation and submission of declarations,
  • Advice on filing applications for tax deferrals / installment payments.

We encourage you to contact the Team representatives by phone or e-mail. We also organize Skype / Zoom teleconferences etc. on request.