July 1, 2022 - an important date on excise tax grounds!
It will soon be a year since the amendment to the Excise Tax Law came into effect. This is important information, because exactly on July 1, 2022, entities that have made “modifications” to registered vehicles, which as a result have changed type to a passenger car, will have a tax obligation for making these changes. As a result, these entities will be required to file a declaration and calculate and pay excise taxes. The amendment also indicates the deadlines for carrying out the above actions.
The amended provisions of the Excise Tax Law took effect on July 1, 2021. The amendment introduced two new activities subject to excise taxes, so that as of the second half of last year, excise taxes.
- making structural changes in a car other than a passenger car (and thus in a car such as a truck) registered in Poland, which resulted in a change in the type of that vehicle to a passenger car, as well as
- the acquisition or possession of a passenger car not registered in Poland, if the entity that performed the taxable activity at an earlier stage of trading cannot be established, and, moreover, as a result of a tax inspection, customs and fiscal control or tax proceedings, it has not been established that excise tax has been paid.
Special construction for structural changes
The amendment also included regulations indicating when tax liability arises in the above cases. Determining this moment is important in order to determine when the taxpayer should file the relevant declaration and pay the excise tax. As a rule, the amended Excise Law specifies that:
- in the case of making structural changes to a car other than a passenger car, changing the type of this vehicle to a passenger car – the tax obligation arises on the date of execution of this action, and
- in the case of acquisition or possession of a passenger car, if it is not possible to determine the entity that performed the previous taxable act, and it is not established that the tax has been paid – the tax obligation arises from the date of acquisition or possession of this car.
If the making of structural modifications to a motor vehicle, other than a passenger car, registered in the territory of the country, which change the type of this vehicle to a passenger car (including a camper type car), took place before July 1, 2022, the tax obligation for making these structural modifications arises on July 1, 2022. This means that for all such “alterations” made between July 1, 2021 and June 30, 2022, the tax obligation will arise precisely on July 1, 2022.
However, in the case of taxation of “making structural changes”, the legislator has provided a special construction relating to the moment of tax liability for “modifications” made before July 1, 2022. The moment of tax liability for such situations has been postponed by 1 year. With regard to structural modifications made to registered trucks that resulted in the creation of passenger cars, the tax obligation has not yet arisen, and therefore excise taxes have not yet been paid on such activities as a rule. Despite this, some dealers or leasing companies making such alterations to registered cars have decided to file declarations in this regard and pay excise taxes on an ongoing basis.
A law amending the excise regulations introduced a provision that stipulates that if the making of structural modifications to a motor vehicle, other than a passenger car, registered in the territory of the country, which change the type of this vehicle to a passenger car (including a camper type car), occurred before July 1, 2022, the tax obligation for making these structural modifications will arise on July 1, 2022. This means that for all such “modifications” made between July 1, 2021 and June 30, 2022, the tax obligation will not arise until July 1, 2022.
Deadlines in practice
The emergence of the tax obligation on this date also affects the deadlines for other obligations on the part of the taxpayer. It is from July 1, 2022 that 14 days must be counted for filing the simplified declaration and 30 days for calculating and paying excise taxes. However, it is worth recalling that the filing of the declaration and payment of the excise tax must take place no later than the date of filing the notice of making structural changes changing the type of this vehicle to a passenger car, and in case its sale took place before the date of filing this notice – on the date of sale of this passenger car.
In view of the above, entities that made the described structural changes between July 1, 2021 and June 30, 2022 should file an AKC-US declaration no later than July 15, 2022, and calculate and pay excise taxes by July 31, 2022 (which this year falls on a Sunday, so in practice the deadline will extend to August 1, 2022).
Author: Weronika Grzęda, Barrister