JPK­_VAT – A Way to Reduce the Gap in VAT

Sebastian GOSCHORSKI
Accounting & Payrol Partner at RSM Poland

As a result of a decision taken by the Ministry of Finance (MF) to reduce the gap in the value added tax (VAT) as fast as possible, a new type of report, JPK_VAT, was implemented as along with the latest technology for data verification and analysis.

In 2018, the MF analysed more than 4 billion invoices from JPK_VAT files. Nearly 200 thousand of them, which covered almost PLN 400 million from VAT, were deemed suspicious. Only in the first half of 2018, as a result of VAT return corrections after the verification process, the amount of the output tax increased by more than PLN half billion. Taking into account the fact that the software continues to be improved, it is very likely that the system will become even more effective in 2019. Each time a discrepancy is detected, an email message is sent with a verification request and, if an error is found, such message contains a request for a VAT return correction and/ or JPK_VAT file. Such information is sent by email or SMS. Also, a monetary penalty in the amount of PLN 500.00 is still being considered for each found discrepancy.

A Few Words About the JPK_VAT

The Standard Audit File for Tax (Jednolity Plik Kontrolny-JPK) consists of two components. One of them is the JPK_VAT, i.e. the register of purchase and sale transactions, which is required to be filed by VAT payers. The other component, which is electronically filed at the request of tax bodies, is:

• JPK_KR – with data from the books of account,
• JPK_WB – with data from bank statements,
• JPK_MAG – with data from warehouses,
• JPK_FA – with data about VAT invoices,
• JPK_PKPIR – with data from revenue and expense ledger,
• JPK_EWP – with data from revenue register.

The introduction of the JPK_VAT imposes another obligation on an enterprise towards the tax administration. Today, an active VAT payer must file both a JPK_VAT and VAT-7 or VAT-7K. The payer must file the JPK_VAT once a month, even if VAT is accounted for quarterly. Additionally, enterprises that are involved in intracommunity transactions or covered by the reverse charge procedure must file a VAT-UE or VAT-27, respectively for the months such transactions occurred. Consequently, the information is provided in both the VAT return and JPK_VAT file, meaning it is doubled in certain aspects.

JPK_VAT Limitations

Despite the fact that the JPK_VAT file contains information about the transactions posted in the VAT Register (including input and output VAT amounts), it cannot, in its present form, replace the VAT-7 return.   Advancement of the JPK-VAT is necessary due to the fact that it does not carry such key information as a declared surplus of an input tax over the output tax or an allowance for the purchase of cash registers.

The Future of the JPK_VAT. Evolution Towards JPK_VDEK

For the beginning of  2020 the Ministry of Finance intends to implement further solutions for VAT returns and the Standard Audit File for Tax (JPK). They will expect additional data that is meant to facilitate a VAT analysis and inspection by the tax administration. The good news is that the two reports will be combined to form a new structure, the JPK – JPK_VDEK, which, however, will become more detailed.  As a result, the VAT-7 and VAT-7K forms will be removed. Such solutions are expected to save time by removing the doubled obligation to send and verify the data. It will also be possible for the tax administration to verify the data faster and thus speed up the refunding process. A weakness of the new solution is the removal of quarterly tax settlements, which will make it impossible for a number of enterprises to freely plan their future expenses and investments such as, for instance, investments in fixed assets.

Therefore, it is necessary to note that the computers operated by the Ministry of Finance are still learning. This means that the number of questions sent directly to taxpayers will increase. Certainly, the reports will become more and more detailed to help collect the taxes and control any tax frauds. One major change which needs to be emphasized is the fact that today inspections may be carried out with much more scrutiny and the selection of an enterprise for inspection will be rather based on analytical data which will surely grow after the vacation season when the new solution comes in with great strides.