Red Tape Hot Box The on taxing problem of VAT continued…

The accession to the Union will open the common market to Polish companies, thus creating numerous opportunities for our entrepreneurs as well as for ordinary Poles. Things look pretty optimistic in theory. In practice, however, they seem a little bit more difficult, and that’s not due to broken promises on the part of the EU. Unfortunately, once again, we Poles only have ourselves to blame. In this case, ‘ourselves’ means the administration and bureaucracy. One of our readers, whose company is doing business with the Dutch, was recently asked by her trade partners from Holland to send them her company’s international VAT number. All companies in the EU that do business with firms from other member countries must have such an identification number as only then will they be able to deduct the VAT that they pay. So the next day, our reader hurried to her tax office. There, a very friendly clerk (that’s something new…) kindly informed her that unfortunately they do not have the necessary application forms yet. Then it turned out that there are still no administrative regulations concerning ‘European NIPs.’ What’s more, the VAT law has just recently been passed. This was one week ago, and, according to the clerk, the tax offices should be ready to receive applications for the required identification code in early April. One must bear in mind that in Red Tape language ‘should be ready’ doesn’t necessarily mean ‘will be ready’. This means that they will have some 30 days to register a couple of thousand, no, probably tens of thousands of companies (both big and small) who do business with firms from other EU countries. For your information, not so long ago, the average waiting time for a personal NIP was around 2 months. Let’s hope things are better now. The lack of those new tax IDs is a serious impediment to trade as both sides will be unable to write out invoices and deduct VAT. Is it possible that trade will stop for some time? Another sad thing is that Polish Red Tape’s dilatoriness affects not only domestic companies, but also those based abroad. What a way to begin our membership of the EU.