The reverse charge mechanism

DLA Piper's Tax team in Poland and the Association of Importers and Manufacturers of Electrical and Electronic Equipment - ZIPSEE "Digital Poland" have prepared a report on the tax consequences of the reverse charge mechanism on VAT for electronic goods in Poland.

The purpose of the report is to illustrate the systematic and large scale VAT irregularities prevalent on the Polish electronics market, particularly amongst manufacturers of hard disk drives (HDD and SSD) and processors. It also addresses the necessity of taking legislative action to prevent further VAT fraud, specifically the introduction of a reverse charge mechanism with respect to VAT settlements. According to ZIPSEE, one of the areas most vulnerable to VAT fraud is the trade of computer components, such as hard disk drives (HDD and SSD) and processors.

The report looks at the general characteristics of this market and describes the mechanisms that lead to VAT fraud and the most effective legislative methods to combat it. The report also describes the practice of other EU member states in this area and suggests  a legislative solution to best counteract VAT fraud in Poland. In conclusion, the report assesses the application of the reverse charge mechanism on VAT in Poland and other EU member states.

The publication is available in the Polish language only.