I. TAX ORDINANCE
It is allowed to apply for a tax interpretation in case of doubts related to MDR (Mandatory Disclosure Rules) reporting.
Reporting of MDR tax schemes is included in the scope of interpretation proceedings pursuant to Art. 14b and subsequent of the Tax Ordinance
Supreme Administrative Court judgement dated January 28, 2021, file ref. I FSK 1703/20
Argument
Legal and tax obligations resulting from section III chapter 11a of the Tax Ordinance, i.e. related to the so-called obligation to report tax schemes are included in the scope of interpretation proceedings pursuant to Art. 14b and subsequent of the Tax Ordinance.
II. VAT ACT
(1) Assignment of a preliminary contract is subject to VAT in accordance with rules of taxation of the future promised real estate sale agreement (exempt, 8% or 23%).
Assignment of all rights and obligations under a preliminary contract for the sale of a developed real estate constitutes supply of goods within the meaning of Article 7 sec. 1 of the VAT Act and not a service.
Gliwice Voivoide Administrative Court judgement dated October 14, 2020, file ref. I SA/GL 275/20
Argument
For purposes of VAT transactions of sale of rights and obligations under a preliminary contract should be treated equally as the supply of real estate to which these contracts relate, which means that they will be taxed on the same terms (with the possibility of exemption or application of a reduced VAT rate) as the final delivery of the real estate covered by these contracts.
In both cases of concluding a preliminary contract, as well as an assignment, the final effect is the delivery of real estate.
This means that assignment of all rights and obligations under a preliminary contract cannot be considered a service within the meaning of the VAT Act and, on this basis, subject to VAT at the 23% rate.
(2) The handing over of real estate to a trustee prior to the conclusion of a sale agreement does not result in a VAT obligation.
Tax consequences in terms of VAT concerning the use of real estate by the entrusting entity without additional remuneration.
Individual interpretation of the Director of National Fiscal Information dated January 4, 2021, file ref. 0114-KDIP4-2.4012.557.2020.1.MMA.
Argument
Providing the entrusting party – being a party to the fiduciary agreement – of real estate for use, until the actual transfer of ownership of the real estate, without additional remuneration, does not constitute an activity (service) subject to VAT.
In the analyzed situation, none of the circumstances listed in Article 8 sec. 2 of the act on tax on goods and services occurs.
Providing the entrusting party – being a party to a fiduciary agreement – of real estate for use does not constitute either a service provided to persons or entities indicated in Article 8 sec. 2 of the Value Added Tax Act nor the free provision of services for purposes other than the company’s business activity.
(3) No possibility to withdraw invoices issued by a taxpayer in connection with the implementation of a false order.
Individual interpretation of the Director of National Fiscal Information dated January 21, 2021, file ref. 0461-ITPP1.4512.961.2016.6.MP.
Argument
The manufacture of goods on basis of a counterfeit order, and subsequently issuing invoices by the contractor on this basis, and issuing original invoices is considered introducing these invoices to the market.
Introducing and circulation of such invoices in document flow means that the company indicated as the issuer of the false invoices is not able to withdraw the above invoices, which were issued in relation with the implementation of a false order.
The company is therefore not entitled to adjust the tax base and the VAT due.
dr Andrzej Chełchowski
Partner, Radca prawny
T: +48 22 447 43 00
M: +48 601 694 424
E: chelchowski@millercanfield.com
Disclaimer: This publication has been prepared for clients and professional associates of Miller Canfield, and is based on the facts and guidance available at the time of its release which may be subject to change. The purpose of the publication is to draw attention to the legal events indicated in it and should not be the sole basis for any decision regarding a particular course of action; nor should it be relied on as legal advice or regarded as a substitute for detailed advice in individual cases. The services of a competent professional adviser should be obtained in each instance so that the applicability of the relevant legislation or other legal development to the particular facts can be verified.