According to recent case law of Supreme Administrative Court (SAC), the tax becomes chargeable at the end of the agreed period of account and not on each supply within the period. This should make VAT compliance easier for many. A popular method to account for transactions is to agree payments over certain periods. This relates not only to provision of services (e.g. lease) but also to supplies of goods. Such a treatment simplifies transaction reporting for VAT purposes. The simplification is provided for in tax regulations and its availability has been confirmed in recent SAC case law. Generally, the tax becomes chargeable on the supply of goods or services. But supplies accounted for on a periodic basis fall under Article 19a (3) and (4) VAT Act. According to these rules, where a supply is accounted for over successive periods of account or payment, the supply shall be regarded as being completed on expiry of each such period. Thus, the charge to tax arises at n the end of the agreed period of account. For the full text of the article, see Rzeczpospolita on-line and here.
It’s the end of the agreed period of account that matters
Date: 01 February 2018