The Polish threshold calculation and PSI data collection monitoring and compliance method

1. The Polish threshold calculation and PSI data collection monitoring and compliance method

2. Organizational background of the external trade in goods • In Poland the specificity of organizing foreign trade in goods is based on the responsibility shared between the Central Statistical Office of Poland (the CSO) and the Polish Customs Administration where data are collected and processed. • On the basis of the Agreement on Direct Co-operation Between Customs, TAX and Statistical Authorities signed between the Minister of Finance and the President of the Central Statistical Office concerning the co-operation in the field of the INTRASTAT system (signed on December 2003), the data from the VAT system are directly transmitted to Customs Administration. • Since 2014, when the secure link between the CSO and Customs Administration was established, access to VAT data has also been granted to the CSO.

3. Responsibilities under the national Agreement – the CSO FTS(Foreign Trade Section) • Makes final logical data checks • Transmits data from alternative sources to CAAC (The Analytical Centre of the Customs Administration) • Makes analyses of statistical data sets supplied by the MF • Approves statistical data sets • Produces assumptions for data estimation CIS (Central Statistical Computing Centre of the CSO) - Maintains database HINEX - Processes statistical data sets supplied by the MF (Ministry of Finance) The CSO - Register - Maintains the register of PSIs called REGON (National Official Business Register) and the statistical register called BJS (for PSIs running business activities) - the two are linked The CSO has the exclusive right to publish statistical data as official statistical information

4. Responsibilities under the national Agreement – MF • Regional Customs Chamber in Szczecin - registers Intrastat declarations • Regional Customs Chamber in Krakow - maintains the central server which registers SAD forms transmitted from regional customs offices • CAAC(the Analytical Centre of the Customs Administration)– produces statistical data sets If required, 16 coordinators in regional customs chambers ad hoc support the Customs Chamber in Szczecin.

5. System of external trade in goods – key tasks • Data collection in the INTRASTAT system (Intrastat data) • Data collection in the CELINA system (Extrastat data) • Maintenance of the documentary data base • Compilation of statistical data sets • Production of statistical information on foreign trade • Dissemination of data

6. System of external trade in goods – general (1) • The base of the INTRASTAT system - Business Register in the Ministry of Finance supplied with records from: • The CSO database • Central Register of National Taxpayers (KEP) • VAT data Warehouse • VIES data (regularly supplied starting from the 2014 reference year; the system was also supplied with data for 2011, 2012, 2013)

7. System of external trade in goods – general (2) The IT system checks whether the data collected in the reference period are correct and complete. The results of the checks by the IT system is information entered into the Register that a given PSI completed the reporting obligation in the reference month. Outcomes of statistics (Intra and Extra data sets) are generated monthly. When creating data sets, the IT system itself estimates missing data (non/late response) and data below the exemption threshold. Alternative data sources are used for data collection of specific goods and movements: vessels and aircrafts, sea products, electricity, natural gas, military goods.

8. INTRASTAT data versus VAT data • Under EU law, statistical data collected in the national data collection systems recording intra-EU trade are checked and verified on the basis of administrative data coming from tax systems. • The TAX Authorities shall communicate the data obtained from the monthly tax returns on goods and services, which are submitted by taxpayers in the form of VAT-7, as well as the data obtained from the recapitulative of VAT-EU statements registered in the VIES system, directly to the Polish Customs Administration.

9. The Polish threshold calculation method The table for threshold calculation is produced on the basis of VAT final data for all PSIs involved in trade (in each flow separately) for the previous year (i.e. for threshold calculation in 2013 VAT data of PSIs for 2012 were taken into account). Columns in the table include: - ID of each PSI (tax ID number is called NIP number of PSI) - total turnover of each PSI in descending order in PLN for 2012 - share in total cumulated value in % - cumulated value in PLN calculated as the sum of values of trade of all PSIs in descending order If the first PSI achieves 'a' trade value, the second 'b' trade value, the third 'c' trade value and so on until the last one, the cumulative values are: first 'a', second 'a+b', third 'a+b+c' and so on. If you move top-down in the column 'share in total cumulated value in %' until you get 95% (97%), you will have a row with the total trade value which indicates the value of the exemption threshold in the column 'total turnover of each PSI'.

10. Statistical thresholds in the Polish system of trade statistics 2014 For arrivals Exemption threshold 1 500 000 PLN Statistical value threshold 42 000 000 PLN For dispatches Exemption threshold 1 500 000 PLN Statistical value threshold 76 000 000 PLN

11. PSIs responsible for the reporting • PSIs whose trade value exceeds the thresholds set by the President of the Central Statistical Office are obliged to submit Intrastat declarations to the INTRASTAT system. • Fulfilment of the obligation to declare the volume of trade to the Intrastat system is monitored by the Customs Administration on the basis of the Business Register maintained in the Ministry of Finance (see slide 6).

12. Monitoring of responsibility of PSIs for reporting to the INTRASTAT system • Trade companies trading in goods shall monitor their own trade volume in order to ascertain whether the statistical value of their trade does not exceed the exemption threshold on arrivals and dispatches in the reference year. • The Customs Administration which has access to data from the TAX systems can easily identify PSIs who exceeded the exemption threshold, but did not transmit the required Intrastat declarations. • When the new trade company submits Intrastat declarations this company is automatically included into the Register of PSIs running business activities.

13. Monitoring of Intrastat and VAT returns in the IT system The IT system generates: • List of PSIs submitted non complete declarations • List of PSIs not fulfilling their reporting obligation (reminders/appeals are applied) • List of values declared to the INTRASTAT system and values declared to the VAT system. In case Intrastat and VAT values differ by more than 30% - the data declared to the INTRASTAT system are subject to analysis by Customs Administration. IT template for monitoring trade values declared to the INTRASTAT and VAT systems

14. The reminder system in Poland • The reminder system is applied to the PSI who does not fulfil the reporting obligation or fills it in incorrectly. • If the customs office decides that the INTRASTAT declaration is incomplete, includes incorrect data, or is not filled in according to the obligation, then the customs office summons the obliged PSI by phone, fax or other media. • A summons passed on to the obliged PSI informs why the data reported in declarations is incorrect and gives the deadline for sending explanations. This fact is registered in the IT system. • It is also planned in Poland to use central customs systems to develop an automatic reminder procedure.

15. PSI’s responding to summons Usually, the obliged PSI responds to the reminder within 7-14 days after it is received. The number of responses reaches about 95% annually.

16. What Customs Administration does in case of non-reaction to summons The Customs Administration reminds the PSI no more than 3 times. If after the third reminder the obliged PSI still does not submit the declaration or does not correct the previously erroneous reported declaration, the Customs Chamber can impose a fine of 3 000 PLN (approx. 750 EUR) for each type of declaration in each flow in a given reference period.

17. The method of determining the reporting obligation in arrivals and dispatches Each entity compares its trade value in arrivals and dispatches with the exemption threshold to determine its reporting obligation. • In general the value of intra-Community acquisitions and intra-Community supplies is considered the taxable amount which is the basis for VAT calculation.

18. The moment of starting the reporting obligation (1) The reporting obligation arises when: • The trade value of arrivals or dispatches in the year preceding the reporting year exceeded the value specified for the exemption threshold on arrivals or the exemption threshold in dispatches respectively, which is fixed for the current year - in this case declaring shall start from the first month of the reference year and last until the last month of the reference year.

19. The moment of starting the reporting obligation (2) The reporting obligation arises when: 2) The trade value of arrivals or dispatches in the current reporting year exceeded the value specified for the exemption threshold on arrivals or the exemption threshold in dispatches respectively, which is fixed for the current reporting year - in this case declaring shall start from the reporting period (reporting month) in which the exemption threshold was exceeded.

20. Characteristics of the Polish method • Simplicity • Using the existing IT architecture which is developed if necessary • Good co-operation between different Administrative bodies "Everything should be made as simple as possible but not simpler" Albert Einstein

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