More small companies to be spared burden of VAT registration

2009-10-23

The government on 20 October approved draft legislation that would significantly raise the turnover threshold beyond which companies must register for VAT. Many thousands of small companies will avoid registering for VAT as a result, widely considered as the most complex, costly and time-consuming part of the tax system.
Under the new legislation, the minimum turnover is to be raised by 200%, to the equivalent of €30,000 (PLN 125,000) from €10,000 (PLN 42,000) at the moment. However, because of the difficult fiscal situation, the new threshold will be introduced in a phased manner, rising first to €20,000 in 2010, then to €30,000 in 2011.
The move was first outlined a year ago and was seen as an attempt by the ruling Civic Platform (PO) party to reinvigorate its image as a tax-cutting party.
According to experts, the change would benefit the entire economy, not just small businesses.