How does quarterly VAT reporting work?
A business that settles VAT quarterly submits JPK_V7K files every month. However, for the first two months of the quarter, it only submits the records (sales and purchase ledger), and only in the third month does it submit the records together with the VAT return for the entire quarter. The deadline for submitting documents and paying VAT is the 25th day of the month following the end of the quarter (e.g. for the first quarter, by 25 April). In practice, quarterly VAT settlement gives the taxpayer more time to pay this tax – the tax for the first two months of the period can be settled only together with the quarterly return.
Who is eligible for quarterly VAT settlement?
The option to settle VAT quarterly is primarily intended for so-called small taxpayers. This status applies to taxpayers who did not exceed a sales threshold of the equivalent of €2,000,000 gross in the previous year. It is worth noting that exceptionally favourable rules apply to companies settling their tax under the so-called Estonian CIT scheme – they may opt for quarterly settlement even with a higher turnover, up to EUR 4,000,000 per year (in accordance with Article 99(3)(2) of the VAT Act).
It should be noted, however, that Article 99(3a) of the VAT Act contains additional restrictions preventing certain taxpayers from making use of this mechanism. Under this provision, the following are not eligible for quarterly VAT:
- newly registered VAT taxpayers during their first 12 months of operation;
- businesses selling so-called sensitive goods (e.g. fuels, steel products, electronics) in excess of PLN 50,000 net per month;
- companies settling simplified VAT imports in their returns in accordance with the rules set out in Article 33a(1) of the VAT Act;
- entities that have not provided customers with the option of cashless payments (e.g. by payment card).
The decision to switch to quarterly VAT returns must be notified by updating the VAT-R form within the prescribed time limit – no later than the 25th day of the second month of the relevant quarter.
What are the benefits of quarterly VAT returns?
Quarterly VAT returns are a solution that, in practice, offers taxpayers a number of benefits. Quarterly returns involve a significant reduction in administrative obligations – instead of twelve VAT returns per year, a business prepares and submits only four tax returns (one per quarter). This translates into a reduced administrative burden and a saving of time which, in the case of monthly returns, would otherwise have to be spent on the monthly preparation, verification and submission of documentation to the tax office. For many taxpayers, this may also mean a reduction in accounting costs, especially if they use the services of external accountancy firms, which often charge their fees based on the number of returns submitted or the scope of administrative work.
Secondly, it is worth noting that the business owner has longer access to funds which, under the monthly system, would have to be paid to the tax office. This means that the tax due for the first and second months of the quarter can be used to finance ongoing operations until the entire quarter is settled. The lower frequency of tax return submissions also makes it easier to identify and correct any errors in the returns before they are submitted to the tax office.
Quarterly VAT returns – summary
In summary, quarterly VAT settlement in 2025 remains an attractive and flexible solution for many businesses that meet the conditions set out in the regulations. It enables better management of a business’s cash flow and reduces administrative burdens. At the same time, however, it requires caution when assessing the eligibility criteria for using this mechanism and keeping abreast of legal changes. It is advisable to analyse your own tax situation each time and consult professionals regarding the choice of VAT settlement method to ensure that the decisions taken are beneficial and compliant with current legal regulations.
Frequently asked questions
For whom is the possibility of quarterly VAT settlement provided in 2025?
Quarterly settlement is available primarily for small taxpayers, i.e., those whose turnover in the previous year did not exceed the equivalent of 2 million euros gross. Exceptionally favorable rules apply to companies settling Estonian CIT, which may use this form with turnover up to 4 million euros annually.
When should the declaration be filed and tax paid under quarterly settlement?
The deadline for filing documents and settling liabilities falls on the 25th day of the month following the end of the quarter, for example by April 25 for the first quarter. The entrepreneur files JPK_V7K files monthly, but for the first two months sends only records, and submits the full declaration together with records for the third month by the final deadline.
What are the main benefits of switching to quarterly VAT settlement?
The entrepreneur files only four declarations during the year, which significantly reduces administrative obligations and saves time needed to prepare documentation. An additional advantage is better cash flow management, as funds for tax for the first two months can be used for current operations until the final settlement of the quarter.
Who cannot use quarterly VAT settlement?
This mechanism cannot be used by newly registered taxpayers for the first 12 months of operation and companies that do not provide customers with cashless payment options. Restrictions also apply to entrepreneurs making sales of sensitive goods above 50 thousand zloty net monthly and entities settling simplified VAT import.
By what deadline should the intention to switch to quarterly settlement be reported?
The decision to change the form of settlement requires updating the VAT-R form, which must be filed no later than the 25th day of the second month of the given quarter. This deadline is crucial for proper application of the mechanism in the current settlement period.
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