Poland Whitelist of VAT taxpayers

Starting September 1, Poland will publish online a new database of VAT registered businesses. It is a list of VAT payers, which contains several important information about entities conducting business activity in Poland. The list will include, among others, bank account numbers of VAT taxpayers.

When a buyer makes a payment larger than PLN 15,000 to a supplier who is not on the list, the buyer's can no longer deduct the expenses for income tax purposes. Payments made to accounts not included in the lists, the buyer will result in joint liability for the VAT obligations - up to the VAT amount of the underlying transaction - of the supplier.

The sanctions will become effective as of January 1, 2020.

The single list contains the following information:

  • Entities which were not registered for VAT purposes (or were de-registered);

  • Entities registered as the VAT taxpayers (i.e., data on active and exempt VAT taxpayers), including entities whose registration as VAT taxpayers has been restored.

  • Bank accounts numbers indicated in the tax identification or update notifications.

  • The list can be maintained and updated daily.

What does it mean?

Taxpayers should integrate the white list check as a mandatory internal control during payment and settlement processes. From a tax perspective, the following adjustments need to be made to minimize tax risks:

  • Verify, before executing a payment (i.e., on the day of the transfer order) that payment is made to bank account included in the list; and

  • Once payments are executed, verify whether payments were made to bank accounts contained in the list

  • Notify the head of respective tax office about any potential errors within three days from the transfer order date to avoid sanctions.

What do we offer?

For companies running SAP, we have developed an SAP add-on where the relevant data can be checked automatically. The add-on populates from SAP all relevant data available in the white list and validates in a batch job this data with the data of white list. Errors and correctness will be displayed in the cockpit.

The results are also archived in SAP. A taxpayer can prove during a future tax audit that it has implemented 'state of the art' tax controls. From tax risk management, it is also possible to check the transactions that already took place. 

At first the tax authorities limit the number of queries per day per taxpayer. However, starting in November 2019, it is possible to download the entire online list published by the authorities. We have anticipated during our R&D about this new situation already, and our add-on will, therefore, have a future feature to facilitate your tax risk management.

What is an SAP add-on?

An SAP add-on enhances standard SAP itself.

Add-on components are extra functionalities that do not come with the main SAP product. Different organizations have different requirements. SAP has recognized that and facilitated that additional functionality can be added and that such functionality as a component can be integrated with standard SAP.

An add-on is permitted by SAP – the code 'ABAP' is written and transported where SAP allows it. That means these add-on components sit above the core and access the same dictionary objects or repository objects and perform the required functionality. It contains custom authorization objects according to SAP standards.

SAP add-on solutions are, therefore, without an external interface or external software and can be implemented with minor or no SAP impact in any other area. An SAP add-on does not change the programming code of SAP. As a result, SAP upgrades do not lead to any problems, and maintenance is straightforward.

Additional functionality is added to standard SAP:

'User-friendly, manageable, scalable, extendable, upgradeable, reliable, sustainable, SAP integrated, VAT compliant, audit trail'

Take aways 

Formal support and active involvement of senior management

Optimum process improvement or business transformations will not likely be realized by the sum of individual independent efforts.The risk is that individually everybody knows what needs to be done within his or her own area of expertise, but what is lacking is overall direction and thus progress.

Anticipate what users would want

We combine technical knowledge with industry understanding and knowhow of technologically advanced tools and methodologies available in the market or developed by ourselves.

What do we like to achieve

  • Focus on tax processes that could be improved
    • Manual process: same data requests are made by different stakeholders
  • As Is assessment
  • Anticipate future changes and the data needed
    • What are tax trends?
    • What is happening locally and what should be considered across jurisdictions where you operate?
    • Anticipate new stakeholders and their data needs or requests (internal and external)
  • Define scope and actions for short, mid and long term
  • Write business case for change
  • Realize sponsorship for implementation

‘As is’ assessment, actions and business case

  • What tax data is requested and by whom?
  • What tax process can be improved and what can be automated?
    • CIT, VAT, tax data warehouse
  • What is the Return on Investment?
    • Hard saving: process improvement
    • Meeting (new) tax requirement
  • What systems are in use: SAP, Oracle, etc
    • By which entities?
  • How many end-use computing tools (e.g. excel spreadsheet) do we have?
  • How do we avoid an ad-hoc solution?
    • Understand the bigger picture
    • Real problem and not the symptom

Risk and reward

Technology-related tax risk: understand and address the potential harms and benefits of (new) technology.

Technology tools & systems integration

Ascertaining proper IT support for ensuring efficient, timely and reliable reporting.

Change and project management

VAT should be considered in every aspect of the process, from concept through completion and beyond. Managing by design — looking at any process or transaction from end to end and factoring in all the requirements and controls essential to designing and optimizing a compliant VAT process.

Effective communication and teaming

We speak the language of the business and IT and no translation is needed.

Set up a project plan

  • Set up a project charter that will take effect preferable during feasibility but ultimately during design
  • Write a business case and problem statement
  • Define scope of the project
  • Define objectives and goals of the project
  • Involve stakeholders and define priorities
  • Set measurable milestones
  • Ensure that the right sponsors provide buy-in.
  • Identify (project) risks and how to manage them
  • Jointly validate and refine the project plan and develop a roadmap to success
  • Hold regular meeting to track progress of the various work streams