Grounds for deletion from the VAT register and procedure for reinstatement of VAT registration

Removal from the VAT register

Section 96 of the VAT Act provides for several circumstances in which a taxpayer may be removed from the VAT register. One such circumstance is the cessation of taxable activities. If a taxpayer ceases to carry on business, they are obliged to report this to the relevant head of the tax office. Upon receipt of such a notification, the head of the tax office initiates the procedure to remove the taxpayer from the register as a VAT taxpayer.

Another case is the death of the taxpayer. If a taxpayer registered in the VAT system has died, the head of the tax office removes the taxpayer from the register.

Furthermore, the head of the tax office removes the taxpayer from the register ex officio in the event of:

• the person who made the notification referred to in Article 12(1c) of the Act of 13 October 1995 on the principles of recording and identifying taxpayers and payers ceases to operate the inherited business under the name of the deceased entrepreneur, or
• the expiry of the right to appoint a succession administrator – where no succession administration has been established and the notification referred to in Article 12(1c) of the Act of 13 October 1995 on the principles of registration and identification of taxpayers and payers has been made, or
• the succession administrator ceases to perform their duties, or
• the expiry of the succession administration.

A taxpayer shall also be removed from the register if they:

• has suspended business activities pursuant to the provisions on the suspension of business activities for a period of at least 6 consecutive months, or
• being obliged to submit the return referred to in Article 99(1), (2) or (3), has failed to submit such returns for 3 consecutive months or such a return for a quarter, or
• submitted, for 6 consecutive months or 2 consecutive quarters, the returns referred to in Article 99(1), (2) or (3) in which they did not report any sales, purchases of goods or services, or imports of goods with deductible tax amounts, or
• issued invoices or corrective invoices documenting transactions that did not take place, or
• whilst carrying on business, knew or had reasonable grounds to suspect that suppliers or purchasers involved directly or indirectly in the supply of the same goods or services were participating in fraudulent tax arrangements for the purpose of obtaining financial gain.

Reinstatement of VAT registration

Article 96 of the VAT Act also provides for a procedure for reinstatement of VAT registration. If a taxpayer registered as a VAT payer has been removed from the register, they may apply for reinstatement. Reinstatement may take place in several situations.

The first case is where a taxpayer has suspended their business activities for a period of at least six consecutive months. If the taxpayer decides to resume business activities, they may apply for reinstatement of their VAT registration.

Another situation is where the taxpayer has failed to submit tax returns for 3 consecutive months or for a quarter, unless the taxpayer can prove that they were carrying out taxable activities.

The head of the tax office may also reinstate the entry in the register if the taxpayer issued invoices or corrective invoices documenting transactions that were not carried out, but demonstrates that such issuance of invoices or corrective invoices was the result of an error or occurred without the taxpayer’s knowledge.

Finally, a taxpayer who has been removed from the VAT register on suspicion of using the activities of banks or credit unions for the purpose of tax fraud may apply for reinstatement if they demonstrate that they did not act with such intent.

Summary

The provisions of Article 96 of the VAT Act govern the procedures for removal from the VAT register and reinstatement of registration in that register, and understanding them is crucial for businesses. It is therefore important to monitor one’s own business activities and those of one’s contractors, as well as to periodically verify one’s registration via the browser available at https://www.podatki.gov.pl/wykaz-podatnikow-vat-wyszukiwarka, in order to avoid potential misunderstandings with the tax authorities and the often ‘painful’ consequences of losing VAT taxpayer status.

Author

Piotr Magda

Radca prawny, Senior Associate

The practice includes ongoing advice on administrative and tax law. He has extensive experience in handling judicial, administrative, tax and judicial-administrative proceedings concerning both individual clients and business entities, including that gained through many years of providing services to local government units and other units of the public finance sector.

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