Due to the Value Added Tax Act, the value of the subjective VAT exemption limit did not change in 2019. Taxpayers whose turnover from sales in the previous year did not exceed the bill’s limit may still use the subjective exemption in VAT or if you have started business during the tax year: you do not have to register for VAT if the estimated value of your company’s sales does not exceed, in proportion to the sale purpose, PLN 200.000.
To sales limit we do not add value of tax and:
- intra-Community supply of goods and mail-order from the territory of the country and mail-order sale on the territory of the country
- sales of goods and services exempt from the VAT subject pursuant to the VAT Act or regulation, with the exception of:
- Real estate transactions
- Some services, e.g. grant loans or lending
- Insurance services
- Sales goods included in fixed and inmaterial assets subject to depreciation expenses.
On the other hand, if you use the exemption based on your turnover, do not have the right to deduct VAT from purchases. The VAT tax you paid when shopping goods and services (related to the business) is calculated as a cost in your income tax – if the form of taxation you choose allows it.
But there are many exemptions of this rule:
You do not have to use vat exemption if you sell: investment grounds, in some cases: buildings or part of them, goods listed in attachment number 12 to vat bill (like precious metals), goods subject to excise tax except of: electricity, cigarettes, used cars and means of transport.
Additionally if your business activity is focused on services like law service, consulting (except of agriculture consulting) or jeweler you will not be qualified to use exemption and last but not least, if you do not have registered office of a business in Poland you must pay VAT.
Furthermore, if you finally are qualified to vat exemption, there is other obligation you have to do.
You are forced by law to make simply sales and purchases records. Ministry of Finance did not publish standard form of records, but on their site we can find out information, that included in that registration may be only:
2. sales date
3. sales value
4. sales value cumulatively
If you decide to desist pay VAT, you must be careful about exceed PLN 200.000 limit. If you sold your goods or services for more than bill allows, registration as VAT payer is obligatory and tax officials are not interested in you didn’t recognize about exceed the limit.
By the way, due to the VAT tax amendment there are some changes in VAT exemption. From this point of view most important change is shorter list of business entities covered by the subjective exemption. The sellers of cosmetics, electronics, parts for motor vehicles and motorcycles concluding distance contracts have been removed from this group (e.g. online selling). The exemption is also deprived of entities dealing with debt collection, called factoring. These activities, made since the entry into force of amendment VAT Act, from 1 September 2019, will be subject to obligatory VAT taxation.
If you met presented conditions decision about being Polish taxpayer belongs to you – because you can always decide to pay VAT and deduct. Subjective VAT exemption is not obligatory.