1.Tax news, verdicts and rulings
1.1. VAT upon annuities payable by virtue of perpetual usufruct constituted before 1 May 2004 – letter of Minister of Finance of 27.03.2007 No PT 10-812-167/2007/MR/429
Following verdict of Supreme Administrative Court of 8.01.2007 No I FPS
1/06 the Minister of Finance affirmed that the yearly fees for
perpetual usufruct of land established before 1 May 2004 (i.e. in a
period where such fees were not liable to VAT) are not subject to VAT
after that date.
1.2. Correction of input VAT by reason of making an in-kind contribution of merchandise and fixed assets - letter of Minister of Finance of 27.03.2007 No PT-0333-13/EK/2006/AP-7828/7789
Minister of Finance claimed that merchandise acquired for resale
purposes but finally contributed to a company (as an in-kind
contribution) had not served to the purpose of taxable activity but to
transaction exempt from VAT (making in-kind contribution enjoys
exemption from VAT). Therefore, a major condition required to be
fulfilled in order to deduct input VAT has not been satisfied.
Consequently, a taxpayer should correct input VAT priory deducted
(deducted upon purchase of the merchandise.
In our opinion the above standpoint of the Minister is against the
principle of neutrality. One of the fundamental features of the
neutrality for VAT is not so much whether purchased goods are put into
use in a taxable business but rather the intention to do so at the
moment they are acquired, what is confirmed by a range of the ECJ’s
rulings.
As regards fixed assets used by a taxpayer in connection with taxable
business and subsequently contributed in kind, the Minister of Finance
asserted that correction of input VAT should be effected in accordance
to the rules provided in art. 91 sec. 7 of VAT law – change of the
purpose of the fixed assets consisting in starting using them for
VAT-exempt transactions, makes the taxpayer’s right to deduct input VAT
reverse. In such a case input VAT incurred upon acquisition of fixed
assets would have to be adjusted appropriately, according to rules
resulting from art. 91 sec. 1-5 of VAT act.
You should note however that according to judgment of Administrative
Court in Olsztyn of 7 December 2006 r. (No I SA/Ol 528/06) a taxpayer
does not have to correct input VAT in the above circumstances.
2. Worth knowing
Starting from 1 July 2007 new provisions on procedure of applying for
tax rulings/interpretations will be implemented. The provisions provide
for two types of interpretations: general and individual.
General interpretations are aimed at ensuring uniform application of
law by tax authorities. They shall be issued only by the Minister of
Finance and published in ministerial journal and Public Information
Bulletin. Particularly based on verdicts of administrative courts,
Constitutional Tribunal and ECJ, Minister of Finance will have a right
to change contents of such interpretations. The changes should be
published.
Individual interpretations. A scope of persons/entities eligible to
apply for a individual ruling will be extended. Not only taxpayers but
also persons planning to undertake economic activity and become
taxpayers would have a right to apply. The rulings shall be issued by
the Minister of Finance, its subordinate bodies and municipal
authorities.
Rulings might refer both to actual state of affairs and hypothetical
cases. The applications will be required to be submitted using official
forms. Applicants will also be requested to make a statement that the
background (matters) covered by the applications are not subject to any
pending tax proceedings. False statements would result in
ineffectiveness of ruling to appropriate extent.
Individual ruling may be changed. The changed ruling is delivered to applicant and published in Public Information Bulletin.
|
Complying with (putting into practice) individual or general rulings
before their change or before forwarding to tax office a court’s
judgment (in force) annulling individual ruling can not be to the
detriment of taxpayer.
A fee of PLN 75 zł will be payable within 7 days after the day of
forwarding the application (PLN 75 is payable for each background).
Rulings shall be issued within 3 months after submitting application.
They must include instruction that an applicant may appeal to
administrative court if he disagrees with the contents of ruling.
Taxpayers who conformed to interpretations which have been changed
afterwards or which have not been taken into account by tax office
while issuing tax decision can not be subject to tax offence
proceedings, and such proceedings, if already instituted, should be
cancelled and penalty interest not computed.
Complying with interpretations before their change or which have not
been taken into account by tax office while issuing tax decision makes
taxpayer be exempt from paying taxes to the extent covered by these
interpretations if:
1) tax obligation has not been properly exercised, and
2) tax consequences took place after general interpretation had been published or individual one delivered to taxpayer.
Tax exemption relates to:
1) with regard to taxes settled on a yearly basis – period lasting up
to the end of a tax year in which changed general ruling was published
or changed individual ruling was delivered or a tax office was supplied
with judgment (in force) of administrative court annulling individual
ruling;
2) with reference to taxes settled on a quarterly basis – period
lasting up to the end of a quarter in which changed general ruling was
published or changed individual ruling was delivered or a tax office
was supplied with judgment (in force) of administrative court annulling
individual ruling, and the next quarter;
3) with reference to taxes settled on a monthly basis – period lasting
up to the end of a month in which changed general ruling was published
or changed individual ruling was delivered or a tax office
was supplied with judgment (in force) of administrative court annulling individual ruling, and the next month.
The above rules apply to:
1) a company complying with individual interpretation issued before
establishment of this company on application of persons/entities
planning to form this company;
2) a branch or representation office complying with individual
interpretation issued before establishment of this branch or rep office
on application of entrepreneur planning to form this branch or rep
office.
The changed interpretation is in the above cases delivered to the company or branch or rep office respectively.
Applications for the rulings may also be lodged by entities acting as
payers and collectors of taxes, third parties obliged to pay taxes,
entities mentioned in art. 52 of tax code.
In the case of tax consequences existing (taking place) before general
ruling was published or individual ruling was delivered to taxpayer,
acting in compliance with such rulings do not make taxpayer exempt from
paying taxes.
tresc
|
