VAT TAX refund in Poland. Tax Declarations.

VAT TAX refund in Poland. Tax Declarations.

Tax Refunds for Legal Entities in Poland.

The tax system in Poland is quite complex. There are various types and procedures for tax refunds applicable to both individuals and legal entities. Taxpayers who are well-versed in Polish tax regulations can significantly save money by taking advantage of available tax refund methods, such as VAT refunds or corporate income tax refunds.

A tax refund in Poland occurs when a taxpayer has paid more taxes into the treasury than they owe. In this case, the tax office returns the excess amount paid by the taxpayer.

Tax refunds in Poland may arise for various reasons, including:

  • Excess Tax Payment: A taxpayer may overpay taxes due to incorrect calculations or errors in the tax declaration.
  • Deductions and Allowances: Taxpayers are entitled to various deductions and allowances that can reduce their taxable base. If these deductions and allowances exceed the taxpayer’s tax liability, they may be eligible for a refund.
  • Change in Circumstances: A taxpayer’s circumstances may change during the year, affecting their tax status or income. This could lead to an overpayment of taxes, which can be refunded.

When can legal entities claim tax refunds?

  • VAT Refund: Companies registered for VAT purposes can claim a VAT refund on input tax for certain business expenses. To do this, a VAT return must be filed through the Polish Tax Administration (KAS) website within 25 days after the end of the reporting period.
  • Corporate Income Tax Refund: Companies registered in Poland are required to pay income tax on their net profits. However, certain deductions and allowances can reduce the tax burden, leading to a corporate income tax refund. The corporate income tax return must be filed by March 31 of the year following the reporting period, through the KAS website.

VAT Refund

Polish companies registered for VAT purposes can claim a VAT refund on input tax for certain business expenses. To file a VAT return and obtain a refund, companies must follow these procedures:

  • Filing Deadline: VAT returns must be filed monthly within 25 days after the end of the reporting period. Typically, a refund claim is submitted in this return.
  • Platform: VAT returns are filed online through the Polish Tax Administration (KAS) website.
  • VAT Refund: Companies request a VAT refund through their monthly VAT return. The tax office will reimburse the company for the difference between input and output VAT.

How quickly is VAT refunded in Poland?

  • If you request a refund to your tax settlement account, the refund is issued within 25 days.
  • If you request a refund to your bank account, it is issued within 60 days from the date of submission, provided you declared revenue that month.
  • If you request a refund to your bank account and did not declare revenue that month, the refund is issued within 180 days from the date of submission.

Corporate Income Tax Refund

Companies registered in Poland are required to pay corporate income tax. The process for obtaining a corporate income tax refund in Poland includes the following steps:

  • Filing Deadline: The corporate income tax return must be filed by March 31 of the year following the reporting period.
  • Platform: Corporate income tax returns are filed online through the Polish Tax Administration (KAS) website.
  • Tax Refund: Companies request a corporate income tax refund when they have overpaid tax during the reporting period. The refund will be credited to the company’s designated bank account.

How to obtain a tax refund:

  1. File a Tax Return: Submit your tax return within the established deadlines, indicating the amount of tax to be refunded.
  2. Justify the Refund: Provide documentation supporting your deductions and allowances.
  3. Processing the Request: The tax office will review your return and process the refund request.
  4. Credit the Refund: If the refund request is approved, the amount will be credited to the taxpayer’s designated bank account.

Tax refunds can be a valuable financial resource that can be used for various purposes, such as paying off debts, investments, or savings.

When are tax returns filed in Poland?

A tax return in Poland is an official document that individuals and legal entities must submit to the Polish Tax Administration (KAS) to disclose their income, deductions, and tax liabilities for a specific period.

The main types of tax returns for legal entities in Poland include:

  • Corporate Income Tax Return (CIT): Filed by legal entities to disclose their profits and pay corporate income tax, due by March 31 for the previous year.
  • VAT Return: Filed by companies registered for VAT purposes to disclose their turnover and pay VAT, due by the 25th day of the month following the previous month.

How are VAT returns filed?

VAT returns in Poland can be submitted in the following ways:

  1. Online through the Polish Tax Administration (KAS) website:
    • Register on the KAS website: https://www.podatki.gov.pl/
    • Log in to your account and go to the “Deklaracje i płatności” (Declarations and Payments) section.
    • Select the type of VAT return you want to file (JPK_V7, JPK_V7K).
    • Complete the return, attach the necessary documents, and submit it.
  2. Through a tax representative:
    • Authorize a tax representative to file the return on your behalf.
    • Provide the tax representative with all necessary documents.
    • The tax representative will submit the return to KAS on your behalf.

Deadlines for VAT returns in Poland:

The VAT return must be filed monthly within 25 days after the end of the reporting period. For example, the return for January must be filed by February 25.

IMPORTANT! Late submission of the VAT return may result in fines and penalties. Therefore, it is important to file VAT returns on time.

How a Company in Poland Can Claim VAT Refund

Companies in Poland can claim a VAT refund if the VAT they paid on their purchases (input VAT) exceeds the VAT they collected from their sales (output VAT). This is provided that all expense invoices have been paid. Companies can claim VAT refunds on the following types of expenses:

  • Purchase of Goods and Services: VAT paid on goods and services used for business purposes.
  • Import of Goods: VAT paid on goods imported into Poland.
  • Acquisition of Fixed Assets: VAT paid on the purchase of fixed assets (buildings, equipment, etc.).
  • Research and Development Expenses: VAT paid on research and development activities related to new products or processes.

It’s important to note that there are certain limitations and conditions for VAT deductions. It is advisable to consult a tax advisor to ensure proper VAT accounting and deduction.

Corporate Income Tax Declaration

To file a corporate income tax declaration in Poland, you need:

  • NIP Number (Tax Identification Number)
  • Company Financial Statements (balance sheet, profit and loss statement, cash flow statement)
  • Documents Supporting Income and Expenses
  • Documents Supporting Eligibility for Deductions and Allowances

Corporate income tax declarations in Poland can be submitted through:

  1. Online via the Polish Tax Authority (KAS) website:
    • Register on the KAS website: https://www.podatki.gov.pl/
    • Log in to your account and navigate to the “Deklaracje i płatności” (Declarations and Payments) section.
    • Select the type of corporate income tax declaration you wish to file (CIT-8, CIT-8O).
    • Complete the declaration, attach the necessary documents, and submit it.
  2. By Mail:
    • Download and print the corporate income tax declaration form from the KAS website: https://www.podatki.gov.pl/
    • Fill out the declaration and attach the necessary documents.
    • Send the declaration by mail to the local KAS office.
  3. Through a Tax Representative:
    • Authorize a tax representative to file the declaration on your behalf.
    • Provide the tax representative with all necessary documents.
    • The tax representative will submit the declaration to KAS on your behalf.

Deadlines for filing corporate income tax declarations in Poland:

Corporate income tax declarations must be filed by March 31 of the year following the reporting period.

IMPORTANT! Late filing of corporate income tax declarations can result in fines and penalties. Therefore, it is crucial to file tax declarations within the deadlines.

Expense Items Reducing Corporate Income Tax in Poland

  • Costs of Goods and Services: Expenses for purchasing goods and services used in business activities.
  • Salaries and Social Contributions: Employee salaries and social contributions paid by the company.
  • Depreciation of Fixed Assets: The cost of fixed assets (buildings, equipment, etc.) spread over several years as expenses.
  • Interest on Loans and Credits: Interest on loans and credits obtained for financing business activities.
  • Research and Development Expenses: Costs for research and development of new products or processes.
  • Representation Expenses: Expenses for hosting guests, advertising, and promoting the company.
  • Training and Employee Development Costs.
  • Charitable Donations: Donations to registered charitable organizations.
  • Bad Debt Write-Offs: Losses from writing off uncollectible debts.

It is important to note that there are specific limitations and conditions for deducting these expenses. It is recommended to consult a tax advisor to ensure proper accounting and deduction of expenses from taxable profit.

Tax Consultant and Representative Services

The tax system in Poland is complex and constantly changing, so it is highly recommended for individuals and businesses to seek professional tax advice to maximize their tax refund opportunities. Tax consultants can assist with:

  • Analyzing Tax Situations and Identifying Eligible Deductions and Allowances.
  • Preparing and Filing Tax Declarations and Refund Requests.
  • Representing Taxpayers before Tax Authorities and Providing Tax Optimization Advice.

By utilizing the services of an experienced tax consultant, individuals and businesses in Poland can confidently navigate available tax refund opportunities and minimize their tax liabilities.

Our company also provides a full range of services in this area. We assist with all matters related to taxation and tax optimization and represent clients before Polish tax authorities. If you have any questions on this topic or would like additional explanations and recommendations, please contact us at: office@progressholding.pl.