In 2023, the White List of VAT Taxpayers plays a significant role in the verification process, enabling entrepreneurs to conduct transactions with trusted partners. In this article, we will discuss the functioning of the White List of VAT Taxpayers, its implications on income tax, and how to efficiently verify contractors.
White List of VAT Taxpayers – Objective and Principles
The introduction of the White List of VAT Taxpayers represents a substantial step towards enhancing transparency and reliability in business transactions. According to the Polish VAT Act, there is an obligation to publish a list of VAT taxpayers known as the “White List” on the Ministry of Finance’s website. This list contains information about entities that are active VAT taxpayers and are required to maintain VAT records. Consequently, business owners have the opportunity to verify their contractors to ensure whether they are indeed registered as VAT payers.
Accurate bank account verification: key to transaction settlement
Understanding the conditions under which counterpart verification on the White List is necessary, is crucial. This obligation arises only when:
- The one-time transaction value exceeds PLN 15,000 or the equivalent amount.
- The seller is an active VAT taxpayer.
When planning a payment transaction, it’s essential to ensure precise verification of the bank account. It’s particularly important for this to take place on the day of the transaction and for the payment to be directed to a bank account listed on the registry. The registry is maintained by the head of the National Tax Administration. It’s noteworthy that improper verification can lead to significant consequences in terms of tax records.
Failure to comply with the verification requirement on the White List can result in substantial tax implications. In the event that a purchaser makes a payment to an account that does not occur with the White List, such expenses will not be recognized as tax-deductible costs. This implies that the taxpayer won’t be able to deduct them from their revenue, which could significantly affect their tax liabilities.
Furthermore, if the purchaser redirects the payment to a bank account not listed in the registry, and the seller fails to settle the required VAT for the transaction with the fiscal authorities, the principles of shared responsibility between both parties apply.
It’s worth emphasizing that there are some ways to avoid potential consequences:
- Notification to the Head of the Tax Office: If an improper payment is executed and the purchaser notices the error within seven days from the transfer date, there is an option to report this fact to the tax office responsible for the seller. Utilizing the ZAW-NR form allows notifying the authorities of the mistake and thereby avoiding sanctions.
- Split Payment Mechanism: An alternative method to protect against inappropriate consequences involves employing the split payment mechanism. In practice, this entails making a payment for a specific product or service using this mechanism, which aims to split the payment into two parts: one for the net payment to the supplier and the other for VAT payment.
Effective methods for verifying counterparties on the White List of VAT Taxpayers
Using different methods can help entrepreneurs to accurately verify the integrity of their business partners. Below, we present detailed approaches that can be employed in the verification process.
- Search on the Ministry of Finance Website
- To ascertain whether a specific entity is listed on the White List of VAT Taxpayers, business owners can leverage various tools, including external programs that connect to the official API provided by the Ministry of Finance.
The simplest and official source of verification is the White List of VAT Taxpayers provided by the Ministry of Finance. You can directly visit the Ministry’s website, where an interactive system is available for entering a bank account number. If the account is listed, you can be confident that the counterparty is reliable. Here, you will find a list of entities registered as VAT taxpayers, those unregistered, as well as those struck off and restored to the VAT registry.
The White List of VAT Taxpayers represents a significant stride towards enhancing honesty and transparency in commercial transactions. The obligation to verify sellers’ bank account numbers instills confidence and minimizes the risk of collaboration with unreliable entities.
If you have any questions concerning these or other matters, please feel free to get in touch with our experts: Contact amavat®
We are an independent member of HLB. THE GLOBAL ADVISORY AND ACCOUNTING NETWORK.