VAT tax refund is one of the most important issues for entrepreneurs. For this reason, we have collected all the necessary information on VAT refunds in the article below. You will learn from it how VAT refund works, what legal basis it has, what are the deadlines for payment of VAT tax refund and many other useful information. We invite you to read.
VAT tax refund – when can it take place?
Both entrepreneurs and buyers are VAT taxpayers.
Persons conducting business activity incur the following taxes:
- on purchases (input VAT),
- on the sale of goods or services (output VAT)
They must maintain VAT purchase and sales records. They are necessary for monthly or quarterly settlements. As part of the settlement, they must prepare a JPK_V7 file in which they show output and input tax.
If the business’s tax due exceeds the input tax, the entrepreneur must pay the difference. The deadline is the 25th day of each month ending the settlement period.
If input VAT exceeds output VAT, the business can move the surplus to the next period or request a VAT refund.
VAT tax refund for an entrepreneur occurs only if it is related to the conducted business.
VAT tax refund – what is its legal basis?
The VAT tax refund is strictly defined in the Act of 11 March 2004 on the tax on goods and services.
According to the regulations, to the extent that goods and services are used to perform taxable activities, the taxpayer has the right to reduce the amount of output tax by the amount of input tax.
This is why VAT tax refunds are available to:
- legal entities,
- organizational units without legal personality,
- natural persons conducting business activity independently, regardless of its purpose or result.
As mentioned above, there are two ways for a taxpayer to get a tax refund:
- refund to the VAT account,
- return to the settlement account.
The VAT tax refund cannot be split. It must be made only to one of the above-mentioned accounts. You should indicate the chosen method in the declaration.
VAT tax refund – when can it be verified?
The head of the tax office may request verification of the VAT refund.
Verification is carried out as part of:
- audit operations,
- tax control,
- customs and fiscal control,
- tax proceedings.
If the verification proves that the VAT tax refund is justified, the tax office pays the amount due. Moreover, it also pays statutory interest.
VAT tax refund – what is the deadline?
According to the regulations, the deadline for VAT refund applies to three periods.
| Deadline for VAT refund | ||
| 60-day deadline | 180-day deadline | 25-day deadline |
| This is the basic deadline that counts from the date of submission of the VAT return. It does not matter whether a refund applies to goods, services or business outside Poland. In case of doubt, the tax authority may extend the deadline for the VAT refund to clarify it. The extension of the VAT refund deadline always takes the form of a decision. From 1 July 2024, a 60-day VAT refund period will be replaced by a 40-day refund. | This term is also counted from the moment of filing the tax return. The extension occurs when the taxpayer does not show output VAT, only input VAT from business purchases. In such a case, the tax office has the right to extend the VAT refund term to 180 days. | This is an accelerated procedure, which is also counted from the moment of filing the tax return. The taxpayer has the right to an accelerated deadline for tax refund under the conditions specified in the Act. |
VAT tax refund – when does it happen in expedited mode?
As per regulations, the tax office must refund the VAT difference within 25 days of filing the settlement. However, to do that, the following conditions must be jointly met:
- the input tax amounts shown in the tax return, excluding the input tax amount not settled in previous tax periods and shown in the tax return or the tax difference not settled in previous tax periods, result from invoices documenting amounts due that have been paid in full and from other invoices documenting amounts due, and the total amount does not exceed 15 000 PLN. This concerns also customs documents, import declarations, and the decisions that have been paid by the taxable person
- input tax results from the import of goods, intra-community acquisition of goods, provision of services, if the tax return shows the amount of tax due on these transactions,
- the amount of input tax or tax difference not settled in previous settlement periods and shown in the return does not exceed 3000 PLN,
- The taxpayer submits proof of payment to the tax office no later than the day the return is filed.
- For the 12 months immediately preceding the period for which the taxpayer is requesting a 25-day refund, the taxpayer:
- Was registered as an active VAT payer,
- Submitted returns for each settlement period.
Failure to meet these conditions also prevents the use of the expedited VAT refund.
VAT tax refund – when can the tax office refuse?
The tax authority can refuse an expedited VAT refund in case of unpaid invoices.
Invoices that form the basis for VAT deduction must be settled in cash or by bank transfer. The payment of receivables can occur through crediting the investment as well as in the form of compensation.
VAT tax refund – summary
Every entrepreneur who is an active VAT payer is entitled to a VAT refund. The basic condition for obtaining it is the surplus resulting from the conducted activity. The excess tax can also be moved to the next settlement period.
Do you need more information about VAT refunds? Feel free to contact our experts! They will answer all your questions.
FAQ – Questions and answers on the topic of VAT tax refund
What is a VAT tax refund?
VAT tax refund is the process of recovering overpaid VAT by entrepreneurs.
Who can apply for a VAT tax refund?
VAT taxpayers, including business entrepreneurs, can apply for a VAT tax refund.
What documents do I need for a VAT tax refund?
To refund VAT, you need purchase invoices, VAT declarations and other documents confirming the incurred costs.
What are the deadlines for submitting applications for VAT refunds?
The deadlines for submitting VAT tax refund applications depend on national regulations. These are usually quarterly or annual periods.
What to do if the tax office delays the VAT refund?
In the event of delays, it is worth contacting the tax office directly or using the help of a tax advisor.
Can I apply for a VAT tax refund for purchases abroad?
Yes, it is possible to apply for a VAT tax refund for purchases made in European Union countries. However, the procedure may vary from country to country.
What are the most common reasons for refusal of VAT refund?
The most common reasons are a lack of required documents, errors in tax returns or unjustified expenses.
Can I use the help of a tax advisor for my VAT refund?
Yes, using the help of a tax advisor can make the process easier and minimize the risk of errors.
Does the VAT tax refund affect the company’s financial liquidity?
Yes, a quick and efficient VAT tax refund can significantly improve the company’s financial liquidity. Especially for small and medium-sized enterprises.
How long does the VAT tax refund process take?
The waiting time for a VAT tax refund depends on many factors. It usually ranges from a few weeks to a few months, depending on the complexity of the case and the deadline for submitting the application.