“Blank VAT- Invoices: New Criminal Sanctions in Poland”

At the beginning of this year, some new legal provisions were introduced to the  Polish Criminal Code and to the VAT (Value Added Tax) – Act by the Polish legislator which punish  a new kind of crimes against falsifying and counterfeiting.  According to this new legislation, individuals who issue or falsify VAT – invoices or make use of such documents may be held liable pursuant to new provisions under Criminal Code. The counterfeiting and falsifying of invoices will be subject to severe penalties as we as will providing false information on such invoices to achieve tax benefits. The use of such invoices as authentic during course of trading will be punishable as a criminal offence. The amount of penalty will depend on the amount claimed on invoice. For instance, imprisonment of 25 years is  foreseen for crimes related to invoices whose gross value exceeds the amount of 10 Million PLN (approx. 2 Million GBP). In addition to these new sanctions under the Criminal Code, the Polish VAT- Act punishes now the use of  so- called “blank VAT- invoices”. Blank invoices are deemed to be invoices which have been issued for fictitious  reasons only and do not reflect any real transactions. All taxpayers who have deducted VAT through the use of such invoices will be obliged to return the  deducted amount and to pay an additional  penalty totaling the amount claimed on the blank invoice. Tax authorities are  also entitled to strike off taxpayers from the taxpayer’s list  if they knowingly  issued “blank VAT – invoices” or while conducting their business activities knew or ought to have known or assumed that their suppliers or buyers were involved in a dishonest settlement of VAT in order to gain a financial  advantage. It remains to be seen how these new sanctions will be put into effect in  Poland.

By Dr Robert Lewandowski

Lawyer  with Derra, Meyer & Partners in their Warsaw office