Council Implementing Decision (EU) 2019/310 of 18 February 2019 authorising Poland to introduce a special measure derogating from Article 226 of Directive 2006/112/EC on the common system of value added tax

Council Implementing Decision (EU) 2019/310 of 18 February 2019 authorising Poland to introduce a 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 OJ L 347, 11.12.2006, p. 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 15 May 2018 Poland requested an authorisation to introduce 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 should require 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 the reverse charge mechanism and by the joint and several liability in Poland. Poland requested the special measure for period of three years, from 1 January 2019 to 31 December 2021. (2) In accordance with the second subparagraph of Article 395(2) of Directive 2006/112/EC, the Commission transmitted the request of Poland to other Member States by letters dated 3 September 2018. By letter dated 4 September 2018, the Commission notified Poland that it had all the information necessary to consider the request. (3) Poland has already taken numerous measures to fight fraud. It has 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, increased number of audits among others. However, Poland nonetheless considers that those measures are insufficient to prevent VAT fraud. (4) Poland is of the view that the application of the special measure will eliminate VAT fraud. Since under the split payment mechanism the amount of VAT deposited on a separate VAT account of a supplier (taxable person) can be used for restricted purposes only, namely for the payment of the VAT liability to the tax authority or for the payment of VAT on invoices received from suppliers, it is better guaranteed that the tax authorities will receive the whole VAT amount which should be transferred by the taxable person to the Polish State Treasury. (5) Poland introduced the voluntary split payment mechanism on 1 July 2018. Poland considers that in areas particularly exposed to VAT fraud, the special measure should be introduced. Those areas are sectors of economy such as steel, scrap, electronics, gold, non-ferrous metals, fuels, and plastics. Those areas are generally covered by the reverse charge mechanism and by joint and several liability of the supplier and the customer in Poland.

(6) The special measure will apply to supplies between taxable persons, of goods and services listed in the Annex in business-to-business (B2B) supplies, and will cover only electronic bank transfers. (7) Where a surplus of input tax in excess of the output tax that is recognised by the supplier in the VAT return as a refundable amount, the payment of such refund is normally carried out within 60 days to supplier's regular account. However, Poland has informed the Commission that, for the transactions covered by the special measure, at the request of a supplier who holds a blocked VAT account, the refund is to take place within 25 days. (8) Suppliers are not to incur costs on opening and operating the VAT bank account, as the VAT account is to be free from any commissions and fees by the bank. (9) The special measure is to apply to all suppliers, including those suppliers who are not established in Poland, as they have to hold a bank account operated pursuant to Polish Banking Law. In this respect, Poland confirmed that the suppliers will not incur any additional costs relating to the obligation of opening a bank account in Poland, since those suppliers will be able to open and hold the bank account for VAT payments in Poland free of charge. (10) The special measure as envisaged by Poland will impose significant changes on suppliers. The system has already been operating since 1 July 2018 on a voluntary basis, and taxable persons have had the opportunity to become acquainted with it. (11) The Commission is of the view that the special measure for supplies of goods and services susceptible to fraud is likely to bring effective results in the fight against VAT fraud. The derogations are usually granted for a limited period of time. The special measure should therefore be authorised from 1 March 2019 until 28 February 2022. (12) Given the novelty and the broad scope of the special measure, it is important to ensure necessary follow-up. In particular, such follow-up needs to focus on the impact of the special measure on the level of VAT fraud and on the taxable persons regarding the refunds of VAT, the administrative burden, costs for taxable persons among others. Poland should therefore provide a report on the impact of the special measure 18 months after the entry into force of the special measure in Poland. (13) 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, HAS ADOPTED THIS DECISION:

Article 1

By way of derogation from Article 226 of Directive 2006/112/EC, Poland is authorised to introduce a special statement that VAT shall be paid to the separate and blocked VAT bank account of the supplier opened in Poland on invoices issued in relation to supplies between taxable persons of goods and services listed in the Annex to this Decision where payments for supplies are made by electronic bank transfers.

Article 2

Poland shall notify the national measure referred to in Article 1 to the Commission. Within 18 months after the entry into force in Poland of the measure referred to in Article 1, Poland shall submit a report to the Commission on its overall impact on the level of VAT fraud and on the taxable persons concerned.

Article 3

This Decision shall take effect on the date of its notification. This Decision shall apply from 1 March 2019 to 28 February 2022.

Article 4

This Decision is addressed to the Republic of Poland. Done at Brussels, 18 February 2019. For the Council The President N. Bădălău

Annex

ANNEX List of supplies of goods and services covered by Article 1

Article 1 shall apply to the following supplies of goods and services described according to the Polish Classification of Products and Services (PKWiU): ItemPKWiUName of goods (group of goods)/Name of services (group of services)124.10.12.0Ferro-alloys224.10.14.0Pig iron pellets and powder, specular pig iron or steel324.10.31.0Flat rolled products of non-alloy steel, not further worked than hot-rolled, of a width of >= 600 mm424.10.32.0Flat rolled products of non-alloy steel, not further worked than hot-rolled, of a width of < 600 mm524.10.35.0Flat rolled products of other alloy steel, not further worked than hot-rolled, of a width of >= 600 mm, excluding products of electrical silicon steel624.10.36.0Flat rolled products of other alloy steel, not further worked than hot-rolled, of a width of < 600 mm, excluding products of electrical silicon steel724.10.41.0Flat rolled products of non-alloy steel, not further worked than cold-rolled, of a width of >= 600 mm824.10.43.0Flat rolled products of non-alloy steel, not further worked than cold-rolled, of a width of >= 600 mm, excluding products of electrical silicon steel924.10.51.0Flat rolled products of non-alloy steel, of a width of >= 600 mm, clad, plated or coated1024.10.52.0Flat rolled products of other alloy steel, of a width of >= 600 mm, clad, plated or coated1124.10.61.0Bars and rods, hot rolled, in irregularly wound coils, of non-alloy steel1224.10.62.0Other bars and rods of steel, not further worked than forged, hot rolled, hot-drawn or extruded, but including those twisted after rolling1324.10.65.0Bars and rods, hot rolled, in irregularly wound coils, of other alloy steel1424.10.66.0Other bars and rods of other alloy steel, not further worked than forged, hot rolled, hot-drawn or extruded, but including those twisted after rolling1524.10.71.0Open sections, not further worked than hot rolled, hot-drawn or extruded, of non-alloy steel1624.10.73.0Open sections, not further worked than hot rolled, hot-drawn or extruded, of other alloy steel1724.31.10.0Cold drawn bars and solid profiles of non-alloy steel1824.31.20.0Cold drawn bars and solid profiles of alloy steel, other than stainless steel1924.32.10.0Flat cold rolled steel products, uncoated, of a width of < 600 mm2024.32.20.0Flat cold-rolled steel products, clad, plated or coated, of a width of < 600 mm 2124.33.11.0Open sections cold formed or folded of non-alloy steel2224.33.20.0Ribbed sheets of non-alloy steel2324.34.11.0Cold drawn wire of non-alloy steel2424.41.10.0Unwrought silver or in semi-manufactured form, or in powder form25ex 24.41.20.0Unwrought gold or in semi-manufactured form, or in powder form, excluding investment gold within the meaning of Article 121 of the Act, subject to item 272624.41.30.0Unwrought platinum or in semi-manufactured form or in powder form27Irrespective of PKWiU symbolInvestment gold within the meaning of Article 121 of the Act28ex 24.41.40.0Base metals or silver, plated with gold, in semi-manufactured form — exclusively silver, gold plated, in semi-manufactured form29ex 24.41.50.0Base metals plated with silver and base metals, silver or gold, plated with platinum, in semi-manufactured form — exclusively gold and silver plated, in semi-manufactured form3024.42.11.0Unwrought aluminium3124.43.11.0Unwrought lead3224.43.12.0Unwrought zinc3324.43.13.0Unwrought tin3424.44.12.0Copper, unrefined; copper anodes for electrolytic refining3524.44.13.0Refined copper and copper alloys, unwrought; master alloys of copper3624.44.21.0Copper powders and flakes3724.44.22.0Copper bars, rods and profiles3824.44.23.0Copper wire3924.45.11.0Unwrought nickel40ex 24.45.30.0Other non-ferrous metals and products made of the same; cermets; ashes and residues containing metals and metal compounds — exclusively non-precious metal waste and scrap41ex 26.11.30.0Electronic integrated circuits — exclusively processors42ex 26.20.11.0Portable data-processing machines, weighing <= 10 kg, such as laptops and notebooks; Handheld computers (such as notebooks) and similar — exclusively portable computers such as tablets, notebooks, laptops43ex 26.30.22.0Cellular phones or other wireless networks — only mobile phones, including smartphones44ex 26.40.60.0Video game consoles (such as those used with a television set or a stand-alone screen) and other gaming or gambling apparatus with electronic display — excluding parts and accessories

45ex 32.12.13.0Jewellery and parts thereof as well as other jewellery and parts thereof, of gold and silver or precious metal plated — exclusively parts of jewellery and parts of other gold, silver and platinum jewellery, i.e. unfinished or incomplete jewellery and distinct parts of jewellery including covered or plated with precious metal4638.11.49.0Wrecks, other than vessels and floating structures, for dismantling4738.11.51.0Glass waste4838.11.52.0Paper and paperboard waste4938.11.54.0Other rubber waste5038.11.55.0Plastic waste5138.11.58.0Metal-containing waste other than hazardous waste5238.12.26.0Hazardous metal waste5338.12.27Waste and defective electric cells and accumulators; spent galvanic cells and batteries and electric accumulators5438.32.2Metal secondary raw materials5538.32.31.0Secondary raw material of glass5638.32.32.0Secondary raw material of paper and paperboard5738.32.33.0Secondary raw material of plastic5838.32.34.0Secondary raw material of rubber5924.20.11.0Line pipe of a kind used for oil or gas pipelines, seamless, of steel6024.20.12.0Casing, tubing and drill pipe, of a kind used in the drilling for oil or gas, seamless, of steel6124.20.13.0Other tubes and pipes, of circular cross section, of steel6224.20.31.0Line pipe of a kind used for oil or gas pipelines, welded, of an external diameter of <= 406,4 mm, of steel6324.20.33.0Other tubes and pipes, of circular cross section, welded, of an external diameter of <= 406,4 mm, of steel6424.20.34.0Tubes and pipes, of non-circular cross-section, welded, of an external diameter of <= 406,4 mm, of steel6524.20.40.0Tube or pipe fittings of steel, not cast66ex 25.11.23.0Other structures and parts of structures, plates, rods, angles, shapes and the like, of iron, steel or aluminium — only of steel67ex 25.93.13.0Cloth, grills, netting and fencing, of iron, steel or copper wire; expanded metal, of iron, steel or copper — only of steel68Motor spirit, diesel oil, fuel gas — within the meaning of the provisions on excise duty69Heating oil and lubricating oil — within the meaning of the provisions on excise duty 70ex 10.4Animal and vegetable oils and fats — exclusively rape oil71ex 20.59.12.0Emulsions for surface sensitization for use in photography; chemical preparations for use in photography, not elsewhere classified (n.e.c.) — exclusively toners without a print head for automatic data-processing machines.72ex 20.59.30.0Typewriter ink, draft ink and other inks — exclusively ink cartridges without a print head for automatic data processing machines73ex 22.21.30.0Plates, sheets, film, foil, strip and plastic strips, not reinforced, laminated or combined with other materials74ex 26.20.21.0Memory units — exclusively hard drives (HDDs)75ex 26.20.22.0Solid state storage devices — exclusively SSDs76ex 26.70.13.0Digital cameras and digital camcorders — exclusively digital cameras77ex 28.23.26.0Parts and accessories for photocopiers — exclusively ink cartridges and print heads for printers for automatic data-processing machines, toners with print head for printers for automatic data processing machines78ex 58.29.11.0Operating system software packages — exclusively SSD79ex 58.29.29.0Other software packages — exclusively SSDs80ex 59.11.23.0Other videos and video recordings on disks, magnetic tapes and similar media — exclusively SSDs81irrespective of the PKWiU symbolGHG emission allowance transfer services referred to in the Act of 12 June 2015 on Greenhouse Gas Emission Trading Scheme (Official Journal of 2017 item 568)8241.00.30.0Construction work on residential buildings (works on the construction of new buildings, reconstruction or renovation of existing buildings)8341.00.40.0Construction work on non-residential buildings (works on the construction of new buildings, reconstruction or renovation of existing buildings)8442.11.20.0General construction works involving the construction of motorways, roads, streets and other roads for vehicles and pedestrians and the construction of runways8542.12.20.0General construction works involving the construction of railways and subways8642.13.20.0General construction works involving the construction of bridges and tunnels8742.21.21.0General construction works involving the construction of transmission pipelines8842.21.22.0General construction works involving the construction of distribution networks, including auxiliary works8942.21.23.0General construction works involving the construction of irrigation systems (sewers), bus and water lines, facilities for water treatment and sewage treatment and pump stations9042.21.24.0Works involving the drilling of wells and water intakes and installation of septic tanks9142.22.21.0General construction works involving the construction of telecommunications and power transmission lines

9242.22.22.0General construction works involving the construction of telecommunications and power distribution lines9342.22.23.0General construction works involving the construction of power plants9442.91.20.0General construction works involving the construction of wharves, ports, dams, locks and related hydro-technical facilities9542.99.21.0General construction works involving the construction of production and mining facilities9642.99.22.0General construction works involving the construction of stadiums and sports fields9742.99.29.0General construction works involving the construction of other civil engineering structures9843.11.10.0Works involving demolition of buildings9943.12.11.0Works involving the preparation of the site for construction, excluding earthworks10043.12.12.0Earthworks: digging, ditch digging and earth moving jobs10143.13.10.0Works involving the excavation and geological-engineering drilling10243.21.10.1Works involving the execution of electrical safety installations10343.21.10.2Works involving the implementation of other electrical installations10443.22.11.0Works involving the execution of plumbing and drainage works10543.22.12.0Works involving the execution of heating, ventilation and air conditioning systems10643.22.20.0Works involving the execution of gas installations10743.29.11.0Insulation work10843.29.12.0Installation of fencing10943.29.19.0Other installation works n.e.c.11043.31.10.0Plastering works11143.32.10.0Installation work for carpentry11243.33.10.0Works involving the laying the floor and facing the walls11343.33.21.0Works involving the laying of terrazzo, marble, granite or slate on floors and walls11443.33.29.0Other works involving the laying of floors and walls (including wallpapering), n.e.c.11543.34.10.0Painting works11643.34.20.0Glass-making works11743.39.11.0Works involving the decoration11843.39.19.0Works involving the execution of other finishing works, n.e.c.11943.91.11.0Works involving the construction of roof structures 12043.91.19.0Works involving other roofing work12143.99.10.0Works involving the installation of damp-proof and waterproof insulation12243.99.20.0Works involving the assembly and dismantling of scaffolding12343.99.30.0Works involving the construction of foundations, including pile driving12443.99.40.0Concrete works12543.99.50.0Works involving erection of steel structures12643.99.60.0Works involving the erection of brick and stone structures12743.99.70.0Works involving the assembly and erection of prefabricated structures12843.99.90.0Works involving the performance of other specialized works, n.e.c.12905.10.10.0Hard coal13005.20.10.0Lignite13119.10.10.0Coke and semi-coke of coal and lignite or of peat; retort carbon13219.20.11.0Briquettes and similar solid fuels manufactured from coal13319.20.12.0Briquettes and similar solid fuels manufactured from lignite134ex 26.70.13.0Digital cameras for photography and digital cameras — exclusively digital cameras13526.40.20.0Television receivers, whether or not combined with radio-broadcast receivers or sound or video recording or reproduction apparatus13626.20.1Computers and other automatic data processing machines13730.91.20.0Parts and accessories of motorcycles and side-cars13827.20.2Electric accumulators and parts thereof13928.11.41.0Parts for spark-ignition internal combustion engines, excluding parts for aircraft engines140ex 29.31.10.0Ignition cable harnesses and other wiring sets of a kind used in vehicles, aircraft or watercraft — exclusively ignition cable harnesses and other wiring sets of a kind used in vehicles14129.31.21.0Sparking plugs; ignition magnetos; magneto-dynamos; magnetic flywheels; distributors; ignition coils14229.31.22.0Starter motors and dual purpose starter-generators; other generators and other equipment for combustion engines14329.31.23.0Electrical signalling equipment, windscreen, defrosters and demisters for motor vehicles14429.31.30.0Parts of other electrical equipment for motor vehicles14529.32.20.0Safety seat belts, airbags and parts and accessories of bodies14629.32.30.0Parts and accessories for motor vehicles n.e.c., excluding motorcycles14745.31.1Trade services of motor vehicle parts and accessories, excluding motorcycles

14845.32.1Specialised store retail trade services of motor vehicle parts and accessories, excluding motorcycles14945.32.2Other retail trade services of parts and accessories of motor vehicles, excluding motorcycles150ex 45.40.10.0Wholesale trade services of motorcycles and related parts and accessories — exclusively sale of parts and accessories for motorcycles151ex 45.40.20.0Specialised store retail trade services of motorcycles and related parts and accessories — exclusively sale of parts and accessories for motorcycles152ex 45.40.30.0Other retail trade services of motorcycles and related parts and accessories — exclusively retail sale of parts and accessories for motorcycles