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Financial processes automation

The most recent predictions regarding the automation of accounting processes suggest that in the future all tasks regarding bookkeeping may be taken over by systems specifically designed for it. These systems have been tested by many companies for years, and they are constantly being perfected and updated, so that in the future highly trained employees could be replaced first partially and then entirely by modern technologies.

Accounting in the modern world

The automation of accounting processes should be of interest to entrepreneurs who run big and medium-sized businesses and think of optimizing the working time of accounting departments, whilst maintaining a dynamic company growth. New technologies facilitate data entrance, invoicing, NIP and VAT number verification, preparation of accounting contracts, or submission of tax declarations. Thanks to automation all processes are completed much faster and more accurately.

How not to be replaced by AI?

Although such predictions may not seem too optimistic for the employees, it does not mean that all accountants will lose their jobs. In the era of technological development it is important to focus on personal development and discovering new competences which are compatible with our profession. Finance automation is an opportunity for those who are not comfortable with carrying out tedious tasks which require precision. Instead, such employees will be able to focus on more interesting areas of their work, for example crisis management, tax optimization, or accounting management in order to help with company growth.

Financial support during the pandemic

In a time of economic crisis caused by COVID-19, many businesses have been challenged by having to implement unprecedented solutions that would enable maintaining financial liquidity, pay remuneration to the employees, and maintain stable company growth. Many of these solutions enabled entrepreneurs to stay in business. Government support provided as a part of the Anti-Crisis Sheild programme also proved to be helpful. Although the proposed support ideas are still available to entrepreneurs, protecting businesses from the consequences of the pandemic should be a more extensive and strategic process.

Tax settlement during a global crisis

The current situation along with all financial assistance solutions should be a driving force for calculated crisis management in small, medium-sized and large companies.

Experienced entrepreneurs, aware that similar situations may occur in the future, know that matters such as timely submission of declarations, planning future expenses, maintaining financial liquidity, providing precise accounting reports, finding additional sources of revenue in case of another economic crisis, adjusting to the Labour Law, and setting realistic business goals must not be neglected.

Tax settlement in the post-pandemic era

Economists predict that, similarly to other global crises, the COVID-19 pandemic will also result in economic growth. This means more changes e.g. in tax law which has been under scrutiny in the face of the pandemic. It is possible that many of the proposed or already existing solutions will be implemented for good, whereas others will be replaced by more thought out, hence more long-term solutions for settling taxes.

Occupation codes in ZUS forms

In line with changes introduced along with the Anti-Crisis Shield 3.0 programme (Art. 10 of the Act of 14 May 2020) templates of ZUS ZUA and ZUS ZZA forms were updated. A space for a 6-digit code for new employee’s occupation was added to the template. When applying for social insurance, employers will now be obligated to indicate the profession of an employee or a mandatary.

Formal requirements – how to complete the forms?

When filling in ZUS forms the employer is obligated to include an occupation code. This modification concerns people employed after 16 May 2021. Filling in the occupation code is not necessary in the case of employees that had been employed before that date.

Where should the occupation codes be included?

• ZUS ZUA –fill in the code in box 01, section X
• ZUS ZZA –fill in the code in box 02, section V

Occupation codes are available in the classification of professions and specializations (Regulation of the Minister of Labour and Social Policy of 7th August 2014) as well as on the Statistics Poland’s (GUS) website. It’s worth to keep in mind that as of 16 May 2021 it is obligatory to provide such a code. Should the code change, it must be indicated on the ZUS ZUA or ZUS ZZA form in accordance with existing regulations concerning reporting changes to ZUS.

What is the purpose of occupation codes on ZUS forms?

Adding occupation codes to the social insurance documentation aims at providing more detailed statistical data and tighter control over key information regarding sick leaves. It also helps provide more data on shortage occupations.

The e-commerce package: main objectives

The new package aims at gaining more control over e-commerce trade. Its main objective is to facilitate VAT settlement processes regarding goods sold and services provided to customers from different European countries, and therefore, standardising existing tax laws (which differ depending on the country of destination). The e-commerce package will also help with company competitiveness of businesses active in the EU against businesses outside the EU, as well as limit untaxed goods.

What changed after July 1, 2021?

E-commerce traders will no longer use the term mail order sales. Instead, a new term which encompasses all e-commerce-related processes will be introduced – intra-Community distance sales. But the biggest change to come is the introduction of VAT OSS (One Stop Shop), and the necessary adjustment of internal processes to the new requirements regarding e.g. taxes and invoicing.

The introduction of the eCommerce package means:

• the end of VAT exemption on the import of small parcels,
• tax payers’ obligation to settle VAT via a designated interface,
• a new template for VAT-R registration application,
• a simplified VAT-OSS procedure for suppliers who sell goods across the EU without having a registered office in the country of destination which will enable them to settle intra-Community distance sales via a single declaration,
• the end of existing national tax rate thresholds for distance sales which, if exceeded, oblige the tax payer to register VAT in the country of destination. These thresholds will be replaced by a single, unified distance sale threshold of EUR 10.000 (PLN 42.000) which includes intra-Community distance sales in the EU, and, if exceeded, oblige the tax payer to register for VAT-OSS.

Changes introduced via the e-commerce package are to facilitate the procedures for entrepreneurs in Poland who sell goods to Germany and other EU countries. This, in turn, will allow them to settle VAT via a single declaration and help them save money.

A mutually beneficial remote work model

The term “remote work” has been used for over a year, ever since businesses had to adapt to the restrictions imposed by the government which limited social and professional contact. Employers happily used this opportunity to maintain financial liquidity and reduce mass layoffs. With time, remote work proved to be even more beneficial, as it helped reconcile the private life with the professional one, save up on the costs of maintaining rented office space, decreased the probability of taking sick leaves and the costs connected to commuting. Due to the new economic environment, changes to the Labour Code, which would enable utilizing the remote work model even after the COVID-19 pandemic is over, have been proposed.

Remote work and the proposed changes

The Ministry of Economic Development, Labour and Technology began work on amending the Labour Code in March 2021 and is now in the process of perfecting the amendments in question. The Council of Ministers will receive the draft no sooner than in July this year. The proposed changes will affect both the employees and the employers, and provide a more precise definition of remote work. According to the definition, remote work is a type of work carried out full time or part time at home or in a different location indicated by the employee.

This means that employees and employers can choose between a remote or hybrid work model. The type of model must be agreed on by both parties. For this reason, the Labour Code will include the obligation to define the rules of remote work. More importantly, these rules can be set at any time of employment. The amendment will also include the possibility of working remotely on occasion (12 days a year).

Compensation – what is the employer obliged to provide?

The employer is obliged to provide the means for direct communication with employees who work remotely, for example by supplying each employee with a desktop or a laptop, a phone or a stable Internet connection. In line with the amended Labour Code the employer will be obliged to ensure all tools necessary for remote work, and cover the costs connected to it. Moreover, technical support will have to be available to all employees, as well as all workshops and OSH courses shall be conducted online.

Employee’s duties – what an employee should keep in mind?

An employee who works remotely will have to report in detail on the carried out duties. The report should include the type of tasks performed, and the time spent on each of them. This way, an employer can make sure that employees fulfil their duties. Before deciding on a remote work model, the employee must confirm that their individual place of work meets the conditions of traditional work in terms of technical and work environment requirements.

Remote work as the new normal

If the new amendment is approved, remote work model will gain a more official status. It will no longer be perceived as a solution resulting from a state of emergency but as a highly beneficial alternative which may be the work model of choice for many employers and employees.

ESL (ECSL) – what is it?

Each entrepreneur who sells products or provides services must submit tax declarations presenting their revenue on a monthly or quarterly basis. This obligation concerns not only those who sell products or provide services in the country but also those who conduct trade internationally. In this case, however, tax settlement looks differently. Additional declarations, such as an EC Sales List (ESL) or its digital format ECSL (so much easier to fill in in the Internet era) are required.

What is the purpose of ESL?

The EC Sales List serves the purpose of reporting VAT on the sale of goods or provision of services across EU borders. Each intra-Community trade should be registered on the list for the convenience of tax authorities. Submitting this declaration is essential in the process of verification whether both parties confirm their tax rates in accordance with EU regulations. In other words, it is possible to check whether tax rates are declared correctly, and taxes are paid in full by both parties of the transaction.

What should ESL include?

The EC Sales List should include information required for verification of a transaction between sellers and customers inside the EU. In addition to such basic information as customer’s details, the list must also include customer’s VAT number, their country code, and the value of sales. More importantly, the VAT numbers must appear in VIES – VAT information exchange system. Only then can the ECSL declaration be submitted.

When should you submit ESL (ECSL)?

The declarations (ESL filed on paper or ECSL filed electronically) should be submitted by anyone who runs their own business and sales products abroad, provides goods or services to an entity which pays VAT in another country, or specializes in the transport of passengers or goods in the EU. For this reason, the declaration must be submitted both by eCommerce traders selling products to customers in another country, and entrepreneurs who provide construction services across EU borders.

ESL or ECSL should be submitted on a monthly, quarterly, or yearly basis in accordance with the schedule set by the government. Before you undertake any business activity or expand to new markets it is good to study tax regulations applicable in a given country, so as to avoid any delays or mistakes, and learn more about the EC Sales List by visiting websites of tax authorities.

ECSL vs. Intrastat – what is the difference between the two?

People often ask about the differences between the EC Sales List and another declaration of a similar scope, that is the Intrastat declaration. In short, Intrastat helps gather statistical data regarding trade conducted between company’s home country and the country of delivery inside the EU. ESL and ECSL, on the other hand, are tax declarations which must be submitted to appropriate tax authorities. The information presented in ESL is not as detailed as in Intrastat.

Distance selling from Poland and the selling thresholds

Distance selling, to put it simply, is the sale of goods from their country of origin by a VAT payer to a consumer located in another intra-Community country.

However, not all goods are regulated by the rules of distance selling. In accordance with the VAT Act, such goods include:

• new means of transport
• goods which must be installed or assembled, with or without a test run, by the vendor or an entity acting on their behalf
• second-hand goods, art, collector’s items and antiques

The country of taxation for goods not mentioned above is determined on the basis of distance selling thresholds specified by each country of the EU individually. You can read about distance selling thresholds here.

If the annual distance selling thresholds for goods shipped from Poland to other countries of the EU have not been exceeded, the country of taxation is Poland, i.e. the country of shipment. The seller may choose the place of destination as the country of taxation, regardless of the turnover obtained from the delivery of goods to that country. However, the decision must be made before the distance selling thresholds are exceeded.

Note that the new place of taxation must be the country where the goods are being delivered – it cannot be any country of the EU.

The VAT-21 form and other formalities

Note that the head of tax office in Poland must be informed about choosing another country of taxation for distance selling. This can be done in two ways: in person or online. The head of tax office is notified via a VAT-21 form, free of charge. The choice of a new country of taxation is valid for two years from the finalisation of the first delivery of goods made after the change.

If you provide the notice online, you will receive an official confirmation of receipt (UPO) which must be appended to the VAT-21 form, and then sent to the tax office in the country of registration. On the other hand, if you provide the notice in person, you will receive an official stamp on the VAT-21 form. The certified document must then be submitted to the appropriate tax authorities in the selected country of taxation.

The notice must be submitted no later than 30 days before the finalisation of the first delivery which is to be settled in the new place of taxation. .

The formalities do not end there. The tax payer has to submit to the Polish tax office a document confirming they notified the appropriate tax authorities in the new country of taxation about the changes made. This document must be submitted no later than 30 days from the first delivery completed after the change had been made.

The deliveries must also be properly documented – such documentation is the basis for an exemption from the Polish VAT. If the appropriate documentation of goods exported from Poland is not provided, the seller may be subject to VAT in both countries.

Our support

If you are already one of our clients, all you need to do is provide us with the confirmation of receipt (UPO) or a paper document certified with an official stamp, and we will take care of all other formalities connected with VAT registration of your company. If you are not working with us and are looking for support, do not hesitate to contact one of our VAT experts. We provide support with VAT registration abroad, as well as with any other tax processes.

Are you a VAT payer?

In line with the Polish regulations, all entrepreneurs selling goods and services, exporting and importing goods in Poland and inside the EU are subject to VAT. They can be divided into active and exempt taxpayers. An active taxpayer must register as a VAT payer, submit declarations, keep records of goods and services, issue VAT invoices, and pay taxes.

An exempt taxpayer is an entrepreneur who can be exempt from VAT either on the account of sales volumes or on the account of specific products and services. However, there are certain requirements which they must meet, such as keeping simplified sales records and issuing invoices upon request.

VAT exemptions

A taxpayer is exempt from VAT when their annual sales do not exceed PLN 200,000. The exemption is then based on sales volumes. Entrepreneurs can benefit from it as soon as their business is set up. As long as they do not exceed their annual turnover threshold, they do not have to register as a VAT payer. The exemption can also be based on the specific products and services sold. Entrepreneurs can benefit from the latter if the economic activity they conduct is stipulated by Article 43 (1) of the Polish Tax on Goods and Services Act. More importantly, entrepreneurs entitled to this exemption cannot waive it. However, they are obliged to issue VAT invoices with an information on tax exemption.

When is it necessary to register as a VAT payer?

As stipulated by the VAT Act, there are instances when the entrepreneur is subject to VAT registration as soon as the business is set up. These instances include entrepreneurs who sell goods listed in Annex 12 to the VAT Act, excise goods (with exceptions), building land, parts of motor vehicles and motorcycles, new means of transport, as well as certain goods sold online – regardless of the annual sales value. Registration as a VAT payer is also obligatory when providing legal, advisory, jewellery and debt recovery services.

The e-Commerce package for online traders

According to the EU directive, entrepreneurs conducting trade online should expect some changes in VAT settlement methods in the second half of 2021. The alterations include the standardisation of VAT declarations in the form of VAT-OSS. The e-commerce package aims at facilitating international trade and providing entrepreneurs with equal opportunities on the European market. The most significant objective of the proposed modifications is creating a single digital market for all member countries. The cause of these modernisations is the rapid growth of the e-commerce sector. The existing tax regulations require adjustment to the new economic conditions. The e-commerce package, on the other hand, completes the series of changes in the VAT regulations introduced by the EU in recent years.

The eCommerce package – proposed changes

The main objectives of the EU directive include the standardisation of the VAT settlement processes, including the turnover threshold (EUR 10,000). Having exceeded this limit, preparing a VAT declaration for online trade conducted on the territory of the delivery country will be required.

The EU e-commerce package will enable entrepreneurs to settle VAT with only one declaration in the form of VAT-OSS (One Stop Shop). This way, entrepreneurs selling goods or providing services within EU will not have to register their business in each country individually. They can do it by submitting a single document in the country of identification, i.e. the address of the registered office or the place where the business is registered. VAT will be calculated in accordance with VAT rates applicable in the recipient country.

When should we expect these changes?

The changes in the Polish tax law introduced through the package for e-commerce sellers are to take effect in July 2021. It is worth acquainting oneself with the new procedures beforehand, so as to prepare for the alterations to come.