Shortened VAT refund deadline and purchase through a bank loan.

A taxpayer with a surplus of input tax over output tax, by completing the declaration, has two options to choose from. The entrepreneur may request a refund to the bank account or credit it towards the next settlement period, while reducing by this difference the amount of tax due from the next period. However, you must remember to complete the correct item in the settlement declaration. It should not be forgotten that the shortened VAT refund time limit requires meeting additional conditions. Learn more about this topic!

Dates for VAT refund

Dates for VAT refund

The basic VAT refund deadline is 60 days from the date of submission of the settlement declaration, regardless of the type of purchases made or the tax rate used for the sale of goods or services. In addition, this term also includes persons – after submitting the relevant application – performing the provision of services and delivery of goods abroad. If the taxpayer for a given settlement period (month or quarter) does not show any sale (even tax-free) but only purchases, then in principle he is entitled to a tax refund within 180 days.

However, if the taxpayer submits a relevant application along with the declaration, he is entitled to a refund of VAT in the shortened period, i.e. 25 days from the moment of submitting the settlement.

In this case, remember that it is necessary to meet several conditions:

  • the amounts of input tax indicated in the tax return, excluding the amount of transfer of excess VAT on purchases from the previous period, result from:

    • invoices documenting the amounts of receivables that were fully paid through the bank account of the taxpayer in a bank having its registered office on the territory of the country or the taxpayer’s account at the cooperative savings and credit union of which he is a member, indicated in the identification application referred to in separate regulations,

    • invoices, other than those payable by bank transfer, documenting receivables, if the total amount of these receivables does not exceed USD 15,000,

    • customs documents, import declaration and decisions referred to in art. 33 item 2 and 3 and art. 34 and were paid by the taxpayer,

    • import of goods settled in accordance with art. 33a, intra-Community acquisition of goods, provision of services for which the taxable person is their recipient, or the supply of goods for which the taxable person is their purchaser, if the amount of tax due on these transactions is indicated in the tax declaration, 

  • the amount of input tax or the excess of input tax over due, not settled in previous settlement periods and disclosed in the declaration does not exceed USD 3,000,

  • the taxpayer submits to the tax office documents confirming payment of the tax via the taxpayer’s bank account or the taxpayer’s account at the cooperative savings and credit union,

  • the taxpayer for the next 12 months immediately preceding the period in the settlement for which he applies for a refund within 25 days:

    • was registered as an active VAT taxpayer,

    • made declarations for each accounting period.

Shortened VAT refund deadline and purchase financed by a bank loan

Shortened VAT refund deadline and purchase financed by a bank loan

In addition, the taxpayer must remember, in accordance with art. 19 of the Act on Entrepreneurs Law that making or accepting payments related to the business activity takes place via the entrepreneur’s payment account, whenever:

  • the party to the transaction from which the payment arises is another entrepreneur, and

  • the one-off transaction value, irrespective of the number of payments resulting therefrom, exceeds the equivalent of USD 15,000, while transactions in foreign currencies are converted into USD at the average exchange rate of foreign currencies announced by the Cream Bank on the last business day preceding the day of the transaction.

In this connection, it should be emphasized that the legislator does not impose restrictions on the taxpayer in the form of purchase from own funds. Therefore, the taxpayer can, in principle, apply for the right to a refund of short-term VAT, even if the refund includes goods or services purchased thanks to a bank loan.