Poland introduces anti-fraud VAT reverse charge on phones, tablets and metals

Mon 10th Nov 2014

Poland is planning to introduce the domestic reverse charge on the sale of key goods vulnerable to VAT fraud.

The measure will mean sales of these goods between businesses will no longer be subject to the 23% standard Polish VAT rate. Instead, they will be nil rated using the reverse charge mechanism, and the purchaser will become liable to report the output and input VAT which effectively eliminates any cash payments. This then eliminates the potential for fraud – including carousel and missing trader fraud.

Missing trader VAT fraud

The goods being targeted include: mobile phones; tablets; game consoles; laptops; gold and steel. There will be minimum daily transaction value for individual traders before the reverse charge applies, which is set at PLN 20,000 (Euro 5,000). This de minimus is common in other EU countries.

The initiative has been introduced under the auspicious of the EU’s VAT Rapid Response mechanism, introduced in 2013. This enables member states countries to introduce the reverse charge on domestic supplies of goods at 30 days notice where they suspect are subject to fraud.