On April 1st, after nine months of waiting, the Minister of Finance issued a general interpretation explaining when VAT for construction work is to be paid.
Already when the previous government was in power, Employers of Poland submitted a motion for a general interpretation of tax law regulations to be issued with regards to the moment when the taxation requirement is established in construction and construction-montage services. After the issuing had been delayed three times Viceminister Leszek Skiba, authorized by the Minister of Finance, finally issued the document, which will hopefully dispel doubts.
The problem was linked to the amendment of the goods and services tax bill which came into force on January 2014, changing earlier regulations on establishing the moment when the obligation to pay tax for services arises. In the earlier legal situation, it started on the day when the protocol of delivery and acceptance is signed. After the amendment, the tax authorities assumed the position that it is not his date that is decisive, but rather the moment when the services in question was actually provided.
This was inconvenient, as often many days pass after the work is concluded before the protocol is signed. Moreover, the results are not always accepted. Therefore, one could justifiably fear that if the VAT invoice is not issued in time, the tax authorities would want the taxpayer to pay within 30 days of the service in question being provided – regardless of whether the result were approved.
Notably, the interpretation also emphasized that the signing of the protocol of delivery and acceptance does not have an impact on establishing the tax obligation. However, the Minister of Finance explained that the date of completion in this case should be the date when the service was actually provided, which in his opinion is the moment when the provider considers them ready to be received by the investor. This should eliminate the problem with service providers being required to pay tax although the investors have not paid them yet.
The actions of the government of PM Beata Szydło give hope for a changed approach of state organs to entrepreneurs. The interpretation issued by the Minister of Finance is another – after a.o. resolving the issue of toxic currency options and the implementation of the in dubio pro tributario principle – case of an action aimed at eliminating solutions which were glaringly harmful for entrepreneurs.
The Tax Committee of Employers of Poland