Amendment of the Administrative Enforcement Act - compulsory recovery of VAT receivables

Amendment to the Act - recovery of VAT receivables

The key provisions of the amended legislation on administrative enforcement introduce a solution which allows for the compulsory enforcement of VAT receivables accounted for under the special procedure from an entity whose:

• registered office is located outside Poland

  and

• whose country of identification is a country other than Poland and in which a tax return was submitted.

The Act refers to the declaration submitted in the Member State of identification referred to in Articles 59, 61 and 61a of the Council Implementing Regulation (EU) No 282/2011 of 15 March 2011 setting out the measures for the implementation of Directive 2006/112/EC on the common system of value added tax. Thus, we are referring to declarations for intra-Community distance sales of goods (WSTO), electronic services and distance sales of imported goods (SOTI), for which the country of consumption was Poland.

Prior to the amendment, such a declaration could not constitute the basis for issuing an enforcement order. If a taxpayer did not pay the declared amount of VAT, he or she received a reminder sent electronically.

At present, reminders will not be sent, but national enforcement orders will be issued. These will form the basis for a request for assistance in claiming recovery by another country.

The enforcement order will be supplemented by the number by which a taxpayer liable for payment is identified for tax purposes in another country. This number will be indicated by the creditor in the enforcement order covering the monetary claims arising from the return submitted in other country.

Moreover, there will be an obligation to convert values in other currencies into zlotys. The conversion is to take place according to the exchange rate published by the European Central Bank on the last day of a given settlement period. In the absence of such a publication on a given day, the exchange rate published on the following day will apply.

Administrative enforcement - other changes and simplifications

The change in the regulations will streamline the process of initiating and conducting administrative enforcement, as well as increase its effectiveness by introducing significant changes and simplifications, including, among others:

• modification of the legal definition of the term remuneration - remuneration is understood as 'remuneration and other cash benefits connected with work or a function performed by the obligated person on the basis of the employment relationship and on other basis, if on this account the obligated person receives periodic cash benefits, including cash benefits due from the social insurance in the event of sickness and maternity, paid by the employer during the period of employment, as well as in the period of 12 months from the date of termination or expiration of the employment relationship';
• simplification of the rules concerning the statute of limitations for reminder costs - 'the obligation to pay reminder costs shall become time-barred as soon as the pecuniary claim covered by the reminder expires. If more than one pecuniary claim is included in the reminder, the reminder costs shall become time-barred with the expiry of the pecuniary claim with the latest due date';
• streamlining the use of the Public Receivables Register through automatic data acquisition by authorized entities;
• simplification of the initiation of enforcement proceedings - 'a creditor who is also an enforcement authority initiates enforcement proceedings ex officio by signing or stamping the enforcement title issued by him/her';
• a change in the procedure in the event of the death of the obligated entrepreneur in the course of enforcement proceedings - ‘if the obligated entrepreneur died after the initiation of enforcement proceedings and the administrator of the inherited enterprise runs the inherited enterprise or performs actions, the enforcement proceedings are continued, and the enforcement actions performed remain in force. Taking further enforcement actions and applying enforcement measures may take place after the decision to proceed with enforcement against the enterprise in inheritance has been issued';
• extension of the information a creditor shall provide to the enforcement authority together with the enforcement request and the enforcement title;
• streamlining enforcement against the joint property of the debtor and his or her spouse, inter alia, by enabling the creditor or the enforcement authority to obtain the data of the spouse and the debtor responsible for the joint property and information on the matrimonial regime or the joint property;
• modification of the method for calculating the enforcement fee;
• adaptation of provisions on enforcement from movable property to customs law;
• streamlining enforcement against assets encumbered by a fiscal lien and a compulsory mortgage as well as against an entity that has obtained a financial benefit as a result of a legal transaction performed to the detriment of a creditor;
• streamlining of handling the confluence of judicial and judicial administrative enforcement and the confluence of administrative enforcement - 'in the event of a confluence of administrative enforcement and administrative collateral, administrative enforcement and judicial collateral, or administrative and judicial enforcement for the same property or property right, joint enforcement and collateral for that property or property right shall be carried out by the authority that carries out the enforcement'.

The provisions of the Amendment Act shall enter into force 12 months after the date of the announcement, which is 25 March 2024.