New VAT laws elicit corporate confusion
And this just under a month after the country joined the EU.
This situation - in which a number of usually smaller companies unaware of the rules in their own business environment - translates into millions of euros in unnecessary losses from fines and taxes, but also constitutes a large business opportunity for VAT specialist companies.
UK-based Cardvat is one such company, which opened its doors to the country earlier this month with all eyes on remedying the knowledge gap among local companies regarding VAT. And it plans to make some cash to boot.
Kerrison Pell-Stevens, a partner at Cardvat, says he would deem the company a success in the country if it was able to land one percent of the companies in operation as customers. "One of the biggest problems is that very few people are aware of the way VAT works throughout Europe," Pell-Stevens says. "Many businesses do not understand."
While this might result in a company losing money by overlooking refunds, there are other detriments, such as the heavy hand of Brussels, whose jurisdiction now reaches Poland.
"They don't understand the power of Brussels," he explains. "They seem to think that because they're in another country, Brussels can't get to them."
Many companies do, however, know that Brussels has the power, but it doesn't mean that every business entity is up to scratch on the issue.
Michał Gorzyński, an economist at the CASE Foundation, says that he is unaware, now that the country is in the EU, how to bill for his consultancy work in other EU countries. "I recently had a look at the VAT legislation; it's so complicated," he says. "I still didn't have enough time to understand it."
He hearkens back to the days before the country's EU membership - when things were less complicated. "Previously, you could export goods with no problem," Gorzyński says. "It's not so easy now."
This is particularly bothersome for Gorzyński because he does business throughout the EU, as well as in the USA and the East of Poland. Instead of taking care of invoices on his own, he says that recently, more and more, he has had to enlist his accountant for matters of VAT.
That's positive news for Cardvat. And it's a factor that the company fully recognizes. "At any given time, there is as much as zł.1.9 trillion (E400 billion) in unclaimed VAT," Pell-Stevens says, referring to the EU region.
Some industries, such as road haulage, lend themselves more to VAT troubles. Indeed, Pell-Stevens explains that he has done business for haulage companies in Europe where each truck could lose zł.14,000-18,600 (E3-4,000) on unclaimed VAT, largely through taxes on petrol. In addition, a lot of his initial customers in Poland are local travel companies, but, he expects, this will extend into other sectors.
"They're just not used to it," he adds. "I think that the Polish authorities have a reputation for not repaying VAT, and Poles expect that other countries will be the same," he says.
But all countries are not as inefficient as Poland. For instance, Austria will repay in 20-30 days - other countries more, others less.
"We're trying to help Polish clients that include airlines, car managers, road haulage companies with many trucks to companies with just one [truck]," he says. But for all the difficulty cross-border companies find, Pell-Stevens assures that his business is not rocket science.
"One thing about VAT is that you don't need a consultant," he explains, adding that his company does not necessarily dispense advice; rather, it basically informs the uninformed of the realities of VAT and the differences in application from country to country.
He says he offers companies foreign countries' VAT laws translated into their native languages, then helps them with the transactions. "In many ways, it's very simple to do," he reveals.
Some large companies, though, have in-house accountants that do this, thus obviating Cardvat. However, Pell-Stevens expalins, "We provide a sort of outsourcing service."
This situation - in which a number of usually smaller companies unaware of the rules in their own business environment - translates into millions of euros in unnecessary losses from fines and taxes, but also constitutes a large business opportunity for VAT specialist companies.
UK-based Cardvat is one such company, which opened its doors to the country earlier this month with all eyes on remedying the knowledge gap among local companies regarding VAT. And it plans to make some cash to boot.
Kerrison Pell-Stevens, a partner at Cardvat, says he would deem the company a success in the country if it was able to land one percent of the companies in operation as customers. "One of the biggest problems is that very few people are aware of the way VAT works throughout Europe," Pell-Stevens says. "Many businesses do not understand."
While this might result in a company losing money by overlooking refunds, there are other detriments, such as the heavy hand of Brussels, whose jurisdiction now reaches Poland.
"They don't understand the power of Brussels," he explains. "They seem to think that because they're in another country, Brussels can't get to them."
Many companies do, however, know that Brussels has the power, but it doesn't mean that every business entity is up to scratch on the issue.
Michał Gorzyński, an economist at the CASE Foundation, says that he is unaware, now that the country is in the EU, how to bill for his consultancy work in other EU countries. "I recently had a look at the VAT legislation; it's so complicated," he says. "I still didn't have enough time to understand it."
He hearkens back to the days before the country's EU membership - when things were less complicated. "Previously, you could export goods with no problem," Gorzyński says. "It's not so easy now."
This is particularly bothersome for Gorzyński because he does business throughout the EU, as well as in the USA and the East of Poland. Instead of taking care of invoices on his own, he says that recently, more and more, he has had to enlist his accountant for matters of VAT.
That's positive news for Cardvat. And it's a factor that the company fully recognizes. "At any given time, there is as much as zł.1.9 trillion (E400 billion) in unclaimed VAT," Pell-Stevens says, referring to the EU region.
Some industries, such as road haulage, lend themselves more to VAT troubles. Indeed, Pell-Stevens explains that he has done business for haulage companies in Europe where each truck could lose zł.14,000-18,600 (E3-4,000) on unclaimed VAT, largely through taxes on petrol. In addition, a lot of his initial customers in Poland are local travel companies, but, he expects, this will extend into other sectors.
"They're just not used to it," he adds. "I think that the Polish authorities have a reputation for not repaying VAT, and Poles expect that other countries will be the same," he says.
But all countries are not as inefficient as Poland. For instance, Austria will repay in 20-30 days - other countries more, others less.
"We're trying to help Polish clients that include airlines, car managers, road haulage companies with many trucks to companies with just one [truck]," he says. But for all the difficulty cross-border companies find, Pell-Stevens assures that his business is not rocket science.
"One thing about VAT is that you don't need a consultant," he explains, adding that his company does not necessarily dispense advice; rather, it basically informs the uninformed of the realities of VAT and the differences in application from country to country.
He says he offers companies foreign countries' VAT laws translated into their native languages, then helps them with the transactions. "In many ways, it's very simple to do," he reveals.
Some large companies, though, have in-house accountants that do this, thus obviating Cardvat. However, Pell-Stevens expalins, "We provide a sort of outsourcing service."
