- 7 May 2020
- Posted by: Przemysław Bukowski
- Category: News
VAT declarations are misleading in decisions about support
The problem that can exclude or limit the possibility of obtaining support from PFR is the issue of determining the decrease in turnover and the amount of revenue for 2020. According to PFR, the most important are data from the VAT declaration. This is the information according to which the amounts provided by the applicants will be verified.
Considering the fact that VAT declarations, submitted monthly or quarterly, give a better picture of the entrepreneur’s situation than the data on income tax or accounting data. However, the assumptions do not take into account the specifics of turnover in some sectors of activity. In particular, they do not include taxpayers who in their work face daily prepayments, advances, deposits, etc., i.e. situations where at least part of the remuneration is received even before they perform the service or deliver the goods.
Such taxpayers must show in their declarations VAT advance as soon as it is received. In the goods and services tax, such prepayments are tax-relevant. In income tax, the advance is neutral. Only the final summary of the transaction is accounted for. This can lead to big differences that can significantly change the assessment when applying for support from PFR.
Advance payment not seen as a company’s profit
Settlements using advance payments are common in many industries. Unfortunately, relying on PFR basically only on the data from the VAT declaration and JPK_VAT can harm a large number of companies. The advance payment is not usually used to earn, but to cover costs. It is to reduce the risk, not to generate income. It is only in the final settlement that the entrepreneur obtains profit and realizes his margin. In the event that the second part of the payment falls, for example, at the end of the year, not a month, is not counted as income and may result in the entrepreneur not receiving funding.
Considering the unstable economic situation during the pandemic, it may turn out that the advance payment for the month paid today will have to be returned. However, this will not matter for the application for support from PFR.
Employee on leave not treated as an employee
Micro, small and medium businesses may also encounter difficulties. These are the ones for which the shield provides funding via electronic banking.
The first doubts arise when the entrepreneur is to determine whether his company belongs to the group of micro-enterprises or SMEs. It should be remembered that to define the status it is necessary to specify employees employed under a contract of employment, while employees on maternity, paternity, parental, parental and parental leave are not considered employees. Employees who take part in the status calculation should be reported to ZUS as at 31/12/2019. Conversion of the number of employees is done by adding up individual jobs (or their fractional parts), not by adding up the number of people.