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European Commission Report ”VAT AFTER VIDA” REFLECTIONS ON THE FUTURE OF VAT

What changes in the VAT Directive should be taken into consideration by the new European Commission?  What is the vision of “VAT of the Future” as seen by the most prominent European business associations and tax experts?

As a member of the EU VAT Expert Group (VEG), B2RLaw together with Jan Sarnowski (Head of the Tax) are proud to contribute to shaping the future of VAT.

Yesterday the report prepared by VEG on request of the EU Commission on the “VAT after ViDA” initiative, addressing the future of VAT was officially published.

The report explores the long-term vision for a potential EU VAT system, approaching the topic with an open and forward-thinking perspective. It builds on the core principles and structure of VAT while incorporating global experiences. The analysis also takes into account the EU’s current political and practical landscape, as well as emerging technologies that could influence the future VAT system. At the same time, it acknowledges the importance of starting with today’s realities—reviewing the current VAT system, addressing its shortcomings, and examining the impact of implementing ViDA.

This is a strategic starting point for further exploration and research.

Download the full report here: VAT Expert Group (VEG) Report dated December 2nd, 2024

B2RLaw develops recommendations for future EU VAT changes

The 38th plenary meeting of the VAT Expert Group (VEG) began a few hours ago in Brussels. During today’s meeting, the members of the VEG will present a report to the European Commission containing recommendations for future changes to the VAT Directive. One of the experts representing the Polish tax advisory firm is Jan Sarnowski, Head of the Tax Department at B2RLaw.

The report covers both the issues that need to be resolved here and now, as well as the general directions of development of the European VAT system. Its main principle is the simplification of VAT throughout the EU. It also poses a number of questions for the European Commission to answer:

+ How to reduce the number of VAT rates and reduce the differences between particular VAT systems without limiting the sovereignty of Member States?

+ Is it possible to reduce the number of VAT exemptions and special regimes without leading to worsening the situation of the industries currently using them?

+ Can VAT stop being a tool to support various public policies? Is it possible to clear VAT from preferences regarding activities beneficial to society, the economy or the environment? How to transfer them to other taxes or to grant systems without reducing their effectiveness?

+ How should VAT meet the criteria of sustainable development? Should it contain preferences that reinforce combating the climate crisis? Should it rather be more fiscally effective, easy to settle and neutral towards economic phenomena, leaving the fulfillment of sustainable development to public spending?

European VAT is at a crossroads, and improving its quality requires decisions at the European level. We are glad that Poland, represented by B2R, can be at the centre of this debate – asking questions and recommending solutions beneficial to the European economy!

The VAT Expert Group (VEG) is a group that assists and advises the European Commission on VAT matters, in particular on the preparation of new legislative acts and other policy initiatives, as well as on the practical implementation of VAT legislation. The VEG currently consists of 40 experts: 7 individuals and representatives of 33 organisations. B2R Law is one of the two Polish organisations selected by the Commission to represent the Polish tax advisory profession in the VAT Expert Group.

Jan Sarnowski co-hosting ”Distributed Profit Taxation – Polish and Worldwide Perspective” conference at SGH

Jan Sarnowski, Head of the Tax Department at B2R Law and Managing Director of the Centre for Fiscal Studies at the Warsaw School of Economics (SGH), will co-host the International Scientific Conference “Distributed Profit Taxation – Polish and Worldwide Perspective”. The theme of the conference is a summary of four years of operation of the “Estonian CIT” in Poland.

Why is it important to talk about the “Estonian CIT”?

Distributed profit tax (DPT) is a modern form of corporate income tax (CIT) that was first introduced in Estonia in 2000. Instead of collecting tax monthly, quarterly or annually, companies are taxed when they distribute profits to their shareholders. In countries that have replaced the traditional CIT with the DPT (e.g. Estonia, Latvia and Georgia), the change in tax rules has led to an acceleration in the GDP growth rate, a sharp increase in the investment rate and a significant reduction in the time companies spend paying their taxes.

From 2021, about 10% of Polish companies will be able to settle their accounts according to “Estonian” rules. The DPT is currently used by almost 20,000 companies. In 2023, similar settlement rules will also apply to Polish family foundations, which will greatly increase their popularity.

What is in store for Conference participants?

The keynote speaker at the conference will be Daniel Bunn – President of the Tax Foundation – an American think tank known for its annual publication of the International Tax Competitiveness Index. In this year’s edition (2024), Poland ranked 31st out of 38 OECD countries. One of the recommendations aimed at remedying the dangerous state of the Polish tax system is the full introduction of the DPT, as was the case in Estonia. During the conference, experts from the Tax Foundation will present the estimated impact of this reform on the Polish economy. The results of the analysis will be discussed by a panel of international experts, including Helen Pahapill (Deputy Minister of Finance of Estonia), as well as representatives of tax advisory and business associations, including the Business Centre Club and the Lewiatan Confederation.

The event will take place on Monday, 9 December 2024 in SGH (aula I, bud. C, Al. Niepodległości 128, Warszawa), both stationary and via MS Teams.

Link for registration

B2RLaw at IFG Flagship Fraud Conference | 20-21 November 2024 London

Join us for the International Fraud Group’s flagship conference in London!

Edyta Zalewska and Jakub Przybyliński won’t miss this unique opportunity to network with international lawyers, forensic accountants, investigators, restructuring and insolvency experts, crypto specialists and other leaders in the global asset recovery and fraud investigation field.

An exciting program with:

+ Two keynote speakers

1. Tyler Hodgson: International Team Lead at the World Bank
2. Tom Hayes: The first UK trader convicted over Libor manipulation, now fighting to clear his name

+ Four dynamic panels:

1. Section 1782: The answer to an asset recoverer’s prayers?
2. Liquidator Power: Asset recovery, insolvency style
3. Group Claims: Big money or big headache?
4. PR as a tool in Asset Recovery: Is there value in it?

This is an incredible chance to explore the cutting edge of asset recovery and network with industry experts. See you in London!

Learn more about the event: HERE

B2RLaw at ReBuild Ukraine: Construction & Energy 2024

We are attending the 4th International Exhibition & Conference ReBuild Ukraine Construction & Energy 2024 (13-14 November, EXPO XXI Warsaw).
The event brings together leaders and innovators to drive the vital recovery efforts needed for Ukraine’s war-torn economy, with a focus on rebuilding its infrastructure, industry, energy and housing sectors.

Rafal Stroinski and Roman Iwanski represent the legal perspective on reconstruction and investment initiatives, underlining the importance of a sound legal framework to ensure safe investments and sustainable reconstruction for Ukraine’s future, emphasising stable, long-term solutions. 

We look forward to supporting and contributing to this transformative journey in any way we can.

Learn more about the event: https://rebuildukraine.in.ua/en

B2RLaw recommended in IFLR1000 ranking 2024

We are proud to announce that in this year’s edition of IFLR1000 ranking we have been recommended in 2 categories.

Ranking by practice:

+ Project development Tier 3

+ M&A Tier 5

Full ranking: https://www.iflr1000.com/Jurisdiction/poland/Rankings/195#rankings

European Commission VAT Expert Group Workshop summary, 14-15 October, Brussels

On 14 and 15 October, Jan Sarnowski, head of B2RLaw’s tax department, participated in a workshop of the EC VAT Expert Group in Brussels. B2R Law is one of two Polish organisations selected by the Commission to represent Polish tax advisors in the VAT Expert Group. The two-day discussion focused on recommendations regarding the current challenges of European VAT, as well as general directions of development of this tax in the next 5, 15 and 25 years.

What were the key issues discussed?

The EU has ambitious goals for sustainable development. Should VAT play a role in achieving the EU’s sustainability goals? What would be the effectiveness of such measures and how would they affect the complexity of the European VAT system?

Today, the world’s most valuable resource is no longer gold or oil, but data. The analysis of relevant and reliable data is crucial in many areas of the private economy, as well as in the public sector, in order to protect the VAT revenues of countries threatened by tax fraud. Managing the data comes with challenges in terms of privacy and data security. How much should tax administrations know about taxpayers to ensure both the effectiveness of tax collection and the rights of individual citizens and confidential business information?

The EU platform economy is growing rapidly, from an estimated €3 billion in 2016 to €14 billion in 2020, affecting an increasing number of business sectors (e.g. finance, transport, accommodation and retail). Currently, online platforms don’t fit comfortably into the international VAT framework. How can new payment and reporting obligations be designed to avoid distortions of competition? Is there a way to ensure VAT neutrality in the choice between traditional and e-commerce distribution channels?

The results of the workshop will be presented to the new European Commission (2024-2029) in December 2024.

B2RLaw represents Poland at the European Commission workshop on the future of European VAT

On October 14th and 15th, Jan Sarnowski (Counsel, Tax Advisor, LL.M., Head of B2RLaw’s Tax Practice), will participate in the the VAT Expert Group workshop aimed at preparing recommendations on the further development of European VAT for the new European Commission (2024-2029).

The VAT Expert Group (VEG) is a body that assists and advises the European Commission on VAT matters, in particular on the preparation of new legislative acts, policy initiatives, and the practical implementation of VAT legislation.

The current VAT Expert Group has been appointed by the Director-General for Taxation and Customs Union for a three-year mandate starting on 1 October 2022 and ending on 30 September 2025.

The group is composed of individual experts with particular expertise in VAT and organisations representing business and tax practitioners who can contribute to the development and implementation of EU VAT policy. The VEG currently consists of 40 experts: 7 individuals and representatives of 33 organisations. B2R Law is one of the two Polish organisations selected by the Commission to represent Polish tax advisors in the VAT Expert Group.

The VEG meets quarterly. Its sessions consist of presentations on the current legislative, political, and judicial developments in European VAT, summarised by representatives of the European Commission’s Directorate-General for Taxation and Customs Union. This is followed by a debate aimed at providing feedback and opinions from prominent members of the academic, business, and tax advisory communities.

Jan Sarnowski joins the B2RLaw team as Head of Tax Practice!

Jan is an experienced expert with many years of experience in legal and tax handling of investment processes and cross-border transactions. As Deputy Minister of Finance in charge of the tax legislation division, he was responsible for the implementation of a number of preferences for entrepreneurs operating in the manufacturing industry and new technologies (Estonian CIT, VAT groups, Polish Holding Company, allowances for prototyping, robotization and expansion, and supporting investment through venture capital funds).

He is the creator of the legal framework for the operation of new e-services of the administration (Your e-PIT, e-Tax Office, e-Paragons and National e-Invoice System).

He led the implementation of the provisions of the EU e-commerce VAT package, the implementation of successive simplification packages in the goods and services tax (SLIM VAT), the renegotiation of double taxation agreements with Malta and the Netherlands, and work on defining the taxation rules for family foundations.

As Plenipotentiary of the Minister of Finance for International Cooperation on VAT, he was responsible for the development of technological cooperation with the administrations of developing countries. The result of his work was that Poland signed the first agreements on automatic exchange of information in the field of VAT.

And to top it off, Jan is also an academic teacher at the Warsaw School of Economics and the author of more than 60 publications in the field of law and economics.

See Jan’s detailed profile: here

B2RLaw advises Kodano S.A. in a PLN 40 million investment by the Vinci Da Gama ASI fund

The Kodano Group, which sells optical products in Poland, has raised PLN 40 million from the Vinci Da Gama fund, managed by Vinci S.A. (from the Polish Development Fund S.A. group). The capital raised, will be used to intensify expansion in European markets and develop the laboratory where eyeglass lenses are manufactured.

Kodano is betting on an omnichannel strategy that includes the largest online contact lens and eyewear store in Poland and a network of 100 lenticular dispensers spread across the country. Given the growing demand for optical products, Kodano, which already has online sales in Romania, the Czech Republic, Slovakia, Hungary and Lithuania, plans to intensify its expansion efforts into European markets. To achieve this goal, the group has raised PLN 40 million from the Vinci Da Gama fund, managed by Vinci S.A., which specializes in investments in growing companies.

„We are very happy to have been able to support our long-time client, Kodano, in this investment. The investment entry of the Vinci fund means an acceleration of the already very dynamic development of the Kodano group in Poland and Central Europe” – advises Agnieszka Hajos-Iwańska (Advocate, Partner at B2RLaw).

“Most of the capital raised from Vinci will be used to develop our network of stores, both online and stationary, primarily abroad” – Matthew Matula, CEO of Kodano, adds.

“We decided to invest in a company in the optical market because of the attractiveness of the business plan presented by Kodano. We see Kodano as a growth company and one that is ready to further scale its business by expanding its network of stationary stores and expanding its online sales in European markets. Kodano’s mix of sales channels allows it to further optimize its sales activities and benefit from economies of scale, which in the long term should positively impact the company’s profitability. We expect that the invested capital will allow Kodano to grow at a rate faster than the market” explains Piotr Wolinski, CEO of Vinci.

The B2RLaw team was led by Agnieszka Hajos-Iwańska (Advocate, Partner), with the support of Magdalena Borychowska (Associate, Advocate Trainee) and Konrad Czernecki (Associate, Attorney-at-Law).

For this project, we worked with Pekao Investment Banking, Kodano’s financial advisor.