Simplified Procedure for the Payment of Import VAT

Companies importing goods from third countries into Poland often face the challenge of having to pre-finance the import VAT paid at customs for several months before they can deduct it as input tax or receive a refund. The simplified procedure for the payment of import VAT offers businesses an attractive option to offset the tax directly against their input tax deduction.

Standard procedure

Under the standard procedure, businesses must pay import VAT at the time of customs clearance (either directly to the customs office or via a customs agency acting as an intermediary). The paid import VAT can later be claimed as input tax in the VAT return.

However, this requires pre-financing for up to two months before the input tax can be credited. For a business that applies for a refund, this period can extend to three or four months due to an additional 60-day refund processing time. To avoid these long pre-financing periods, the simplified procedure presents an attractive alternative.

Simplified procedure

According to Article 33a of the Polish VAT Act, under the simplified procedure, import VAT is not due at the time of customs clearance. Instead, it is declared in the VAT return. Since the input tax is claimed simultaneously, an offset occurs, eliminating the need for pre-financing.

Following a legal amendment on July 1, 2020, which significantly eased the application requirements, this procedure has become increasingly popular among businesses.

Requirements for the simplified procedure

1.) Certificates or declarations

The taxpayer must submit the following certificates to the head of the Customs and Tax Office, issued no earlier than six months before the import:

As an alternative to certificates from the tax office, the taxpayer may submit declarations with the same wording. These declarations are made under criminal liability for false statements.

2.) Representation by a direct or indirect representative

Customs declarations must be submitted by a direct or indirect representative in accordance with customs regulations.

Exception: This requirement does not apply if the taxpayer holds the status of an Authorized Economic Operator (AEO) under Article 38 of the Union Customs Code or has a simplification authorization under Articles 166 and 182 of the Union Customs Code.

3.) VAT Reporting

The import VAT must be properly declared in the VAT return:

Conclusion

The simplified procedure is an effective tool for avoiding the need to pre-finance import VAT and ultimately improving the company’s cash flow. The requirements for applying this procedure are relatively straightforward, and the consequences of non-compliance are mild. Therefore, this method is recommended for many businesses that regularly import goods from third countries into Poland.

Do you need assistance with VAT optimization for cross-border supply chains? I am happy to support you in analyzing your individual requirements and developing tailored solutions for your business. Contact me to find out how we can help you in the best possible way.