The increasing digitalisation of the economy has fundamentally changed the nature of how local tax authorities work. Following the trend toward a “digital government”, tax administrations all around the world are using technology more than ever before to collect and analyse more data from taxpayers, often in real time or near real time. In recent years, all over the world, more and more new legal requirements for tax returns and direct digital communication with local tax authorities have come into force. This goes among other things from mandatory B2B e-invoicing in Mexico (CFDI), Italy (SDI), Spain (SII), etc. to a move towards digital tax returns, such as the Making Tax Digital (MTD) programme in the UK. These are just a few examples of a big global megatrend. Many other countries notice the positive effects on closing VAT gaps and therefore are increasingly coming with their own legal requirements, including Poland with its Whitelist of VAT Taxpayers.
“Whitelist of VAT taxpayers”: a new Polish legal requirement with sanctions as from 1 January 2020
As from September 2019, the Polish Ministry of Finance (Ministerstwo Finansów) have imposed amended provisions of “The Act on the Amendment of the Tax on Goods and Services and Certain Other Acts” and introduced the so-called “Whitelist of VAT Taxpayers” (= biała lista) regulation. With severe penalties for non-compliance entering into effect on 1 January 2020, this regulation requires that all payment recipients are first checked against the official by the Polish government released Whitelist before an invoice is paid. This affects all companies with tax residence in Poland whose supplier transactions exceed a value of 15,000 PLN.
As this is, at a closer look at the details, not an obligation, but a reduction of an – albeit potentially serious – risk, SAP is currently not offering a solution to integrate this check into its ERP system and is unlikely to do so in the future. Those hoping for an SAP S/4HANA integrated solution will, unfortunately, also be disappointed, as SAP will also not provide a solution for SAP S/4HANA. An official statement about this is to be found in SAP OSS Note 2822501.
However, our PIKON Competence Center for Legal Requirements have developed an integrated SAP Add-On that does the Whitelist check directly from your SAP ECC or SAP S/4HANA system.
“VAT Poland – Whitelist Check for SAP”: PIKON’s solution to comply with the Polish Whitelist of VAT Taxpayers (biała lista) regulation
With our “VAT Poland – Whitelist Check for SAP” integrated SAP Add-On, you can check all of your suppliers against the daily updated list of the Polish tax authority and initiate any measures that may be required. These include, for example, implementing payment stops or excluding suppliers from any further orders in case they cannot be found on the Whitelist. Obviously, these measures can all be customised.
The Polish government will initially provide this Whitelist as an API that allows for enquiries via the Internet based on different combinations of NIP (tax identification number), REGON (registration number of the company) and the target bank account. Our solution works both with SAP ECC and SAP S/4HANA, requires no additional SAP licenses and can perform an unlimited number of queries per day. With this, you avoid the restriction of performing only 10 queries per day.
Our “VAT Poland – Whitelist Check for SAP solution” retrieves the required supplier data, communicates with the API of the Polish tax authority, and – as a flexible option – bans and unbans suppliers based on the results of the check. Needless to say, you can also conduct checks or retrieve information manually.
The high risks of non-compliance with the Polish “Whitelist of VAT Taxpayers” regulation
Although checking the official “Whitelist of VAT Taxpayers” is not mandatory, there is a severe risk of high fines. If your company makes a payment without the recipient being listed on the Whitelist, your company forfeits its right to claim any Value Added Tax paid as part of the transaction. If the issuer of the invoice is then also in default with tax payments, the whole matter becomes even more expensive: in this case, the recipient and issuer of the invoice will both be liable for the unpaid taxes.