On 6 September 2021, Package SLIM VAT 2 has been published in the Journal of Laws in which legislator made some changes concerning conditions for use of, so called, relief for bad debts and he’s also extended the period of time when one can benefit from this relief. This amendment, with few exceptions, became effective on 1 October 2021.
Within the framework of an amendment, the VAT Act provisions of articles 89a and 89b have been modified. It is worth mentioning that those changes are the result of a need to accommodate the VAT Act regulations to the provisions of the TSUE judgment, that has been given due to examination of the previously mentioned rules. Introduced amendments will allow taxpayers to continue to benefit from the relief for bad debts, however the amount of conditions that they had to meet has been reduced. The essence of the relief comes down to the fact that the taxpayer is allowed to correct the tax base as well as the tax due for the supply of goods or services within the country, in the situation when he failed to receive a payment for supplying goods and services form his contractor. It’s safe to say that this relief is a salvation for those taxpayers who failed to receive a payment from their contractors on time, which is 90 days from the date of expiry of the payment period, specified on the invoice or in the contract.
Introduced amendments allow to benefit from the relief, regardless if the provisions have been fulfilled in favour of the taxpayer registered as an active VAT payer, as well as regardless if he was in the midst of restructuring procedure, insolvency procedure or in liquidation.
The condition under which, on a day when goods and services are being supplied and also on
a day before the day of submitting a tax declaration revision in order to benefit from the relief, the taxpayer could not be in above mentioned situations, have been removed. The ability
to benefit from this relief in case of a buyer who’s not registered as an active VAT payer, depends on fulfilling some additional conditions. However, the condition that the creditor has to be registered as an active VAT payer, in order to benefit from the relief, remained intact.
In addiction to these changes, a period of time when one can benefit from the relief, has extended from 2 to 3 years from the date of issuing an invoice documenting the claim, counting from the end of the year in which it was issued.