Delayed payments

As a person having business activity, especially in wholesale, you are sometimes forced to face the fact that your customers tend to delay payments as much as possible. Surprised as you may be, you are almost bound to face such a situation.

Although delayed payments are unpleasant for both parties they are hardly avoidable, especially in times of crisis when many entrepreneurs loose have lost the capital or invested money in unsold goods. According to the Polish law the wholesale seller is obliged to pay VAT and income tax even in case of lack of payment for his sold goods.

As stated in the act of March 11th 2004 the obligation to pay VAT is assigned to both buyers and sellers. There is a small difference though, the buyers have to pay the tax after the whole payment or its part is done, he should do this within 90 days. The question arises, what should a taxpayer do if he hadn’t received money for the products? The act pertaining VAT payments states that such a taxpayer can apply for the tax relief and the taxpayer can provide the corrected statement for the tax office. The situation applies only to so called debts impossible to recover which means a delay longer than 180 days from the payment date. Additionally, the debtor shall also be informed and should take some stance, both parties are forced not to close their business activity. After settling the bill the tax payer is obliged to pay the tax difference. To cut the story short, such a situation has some solution however numerous requirements are needed for it to be done.