The centralization of VAT tax settlement

The centralization of VAT tax settlement

Municipalities and their organizational units constitute a single taxable person for VAT purposes.

Municipalities and their organizational units constitute a single taxable person for VAT.

According to the CJEU judgment in Case C-276/14, Municipality of Wroclaw against the Minister of Finance, municipalities and their organizational units constitute a single taxable person for VAT purposes. Therefore, every city and municipality shall no later than 1st January 2017 amend in the way the settlement of VAT in such a way, that a taxable person making the settlement of VAT on behalf of its organizational units and itself will be the city or municipality. This raises a serious risk under the Tax Penal Code, especially for the governors of cities and municipalities and treasurers.

 

Our actions in this regard include:

  • Preparation of procedures for the centralization of VAT settlements for organizational units of local government
  • Preparation of procedures limiting the risk of criminal tax liability arising from potential irregularities in the tax settlement of local government units
  • Conduction of trainings for certain workers of local government offices in conducting settlements in respect of VAT
  • Conduction of trainings on the procedures in respect of VAT accounting in a centralized model
  • Current post-implementation support of cities, municipalities and local governments in the area of VAT.

 

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