Council Implementing Decision (EU) 2022/559 of 5 April 2022 amending Implementing Decision (EU) 2019/310 as regards the authorisation granted to Poland to continue to apply the special measure derogating from Article 226 of Directive 2006/112/EC on the common system of value added tax

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax⁽¹⁾, and in particular Article 395(1) thereof,

Having regard to the proposal from the European Commission,

Whereas:

1. By letter registered with the Commission on 26 July 2021, Poland requested an authorisation to continue to apply a special measure derogating from Article 226 of Directive 2006/112/EC in order to apply a split payment mechanism (‘the special measure’). The special measure requires the inclusion of a special statement that value added tax (VAT) has to be paid to the blocked VAT account of the supplier on invoices issued in relation to the supplies of goods and services susceptible to fraud and generally covered by a reverse charge mechanism and by joint and several liability in Poland. Poland requested the extension of the special measure for a period of three years, from 1 March 2022 to 28 February 2025.

2. In accordance with Article 395(2), second subparagraph, of Directive 2006/112/EC, the Commission transmitted the request made by Poland to other Member States by letter dated 27 October 2021. By letter dated 28 October 2021, the Commission notified Poland that it had all the information necessary to consider the request.

3. Pursuant to Article 2 of Council Implementing Decision (EU) 2019/310⁽²⁾, Poland submitted a report to the Commission regarding the overall impact of the special measure on the level of VAT fraud and on the taxable persons concerned by letter dated 29 April 2021.

4. Poland has already taken numerous measures to fight fraud. It has, inter alia, introduced the reverse charge mechanism and joint and several liability of the supplier and the customer, the Standard Audit File, tighter rules for the VAT registration and de-registration of taxable persons, and has increased the number of audits. However, Poland nonetheless considers that those measures are insufficient to prevent VAT fraud.

5. Poland introduced the voluntary split payment mechanism on 1 July 2018 and the mandatory split payment mechanism on 1 March 2019.

6. The goods and services that fall within the scope of the special measure are listed in the Annex to Implementing Decision (EU) 2019/310 in accordance with the Polish Classification of Goods and Services of 2008 (PKWiU 2008). The Polish Classification of Goods and Services of 2015 (PKWiU 2015) replaced PKWiU 2008 from 1 July 2020. Under PKWiU 2015, the symbols of the statistical classification and the editorial names of certain goods and services that appear in the Annex to Implementing Decision (EU) 2019/310 have been changed. Although the replacement of PKWiU 2008 with PKWiU 2015 did not result in any change to the scope of goods and services covered by the mandatory split payment mechanism, the Annex should be updated and replaced by the Annex to this Decision for the sake of legal certainty.

7. The special measure will continue to apply to supplies between taxable persons of goods and services listed in the Annex to Implementing Decision (EU) 2019/310, as updated and replaced by the Annex to this Decision, in business-to-business (B2B) supplies, and will cover only electronic bank transfers. The special measure will continue to apply to all suppliers, including to suppliers not established in Poland.

8. The report submitted by Poland confirmed that the special measure for supplies of goods and services susceptible to fraud brings effective results in the fight against tax fraud.

9. Authorisations to apply a special measure are in general granted for a limited period of time to allow the Commission to evaluate whether the special measure is appropriate and effective. The authorisation to apply the special measure should therefore be extended until 28 February 2025.

10. Given the broad scope of the special measure, Poland should, if it requests a further extension of the authorisation to apply the special measure, submit a report with respect to the functioning and the effectiveness of the special measure on the level of VAT fraud and on the taxable persons regarding, inter alia, the refunds of VAT, the administrative burden and costs for taxable persons.

11. The special measure will not negatively affect the overall amount of tax revenue collected at the stage of final consumption and will have no adverse impact on the Union’s own resources accruing from VAT.

12. In order to ensure that the objectives pursued by the special measure are achieved, including the uninterrupted application of the special measure, and to provide legal certainty with regard to the tax period, it is appropriate to grant authorisation to extend the special measure with effect from 1 March 2022. As Poland requested authorisation on 26 July 2021 to continue to apply the special measure and has continued to apply the legal regime established under its national law on the basis of Implementing Decision (EU) 2019/310 from 1 March 2022, the legitimate expectations of the persons concerned are duly respected.

13. Implementing Decision (EU) 2019/310 should therefore be amended accordingly,

HAS ADOPTED THIS DECISION: