Central Invoice Register in 2018?

The government is going all out to find a way to narrow the yawning VAT gap. The Minister of Finance has revealed his resort is considering creation of Central Invoice Register that will give fiscal authorities a deep insight into what Polish companies are doing.

The finance minister, Piotr Szałamacha, said in a press conference the register can be created within twelve to eighteen months, once the final decision is made. The Ministry is looking up to Portugal, where a similar solution is in force. Invoice registers are also present in the Czech Republic and Slovakia.

Tax gap is a severe problem in Poland. PwC recently revealed that if the gap was closed, Poland would have almost no budget deficit. The average gap in the EU countries is 15%. In Poland it is much higher, over 20%. In other words, Polish fiscal administration is working very ineffectively.

The gap is the difference between the tax revenue that authorities expect to receive and the actual amount of money that is collected. The gap comes mainly from tax fraud. Unfortunately, Polish authorities have a lot of trouble retrieving assets from dishonest taxpayers. The fact that VAT carousels are schemes orchestrated by organized crime groups does not make things easier.

In order to tackle these groups and get more money into the budget, the Ministry of Finance has recently created a company that is to develop specialist IT solutions that will assist fiscal authorities in conducting proceedings. The Ministry estimates that the move will bring the tax gap down from 26% to the European average within the next 3 years.

The new developments will also help tackle the grey market, improve the effectiveness of tax proceedings and tax redemption, and generally “digitalize” Polish tax administration and customs service. Creation of the Central Invoice Register would mean all invoices in Poland would have to be issued electronically.

Not long ago, The Ministry of Finance introduced another solution against tax fraud: the unified control file. The act introducing the file will come into force on the 1st of July. Some taxpayers will be obliged to provide their data in a unified format, which will greatly help officials carrying out tax audits.

The government is very determined to close the tax gap. If they succeed, the state budget will gain tens of billions of PLN. More amendments to tax regulations are expected.