Incorrect customs document and the right to deduct VAT

Service-Tax

In the era of globalization and free trade, the phenomenon of importing goods from third countries is common. For this activity, the taxpayer is obliged to pay not only the customs duty, but also the tax on goods and services, because the catalog of activities subject to VAT also includes the import of goods. The basis for the settlement of this tax is the customs document. However, you should consider what to do if your document contains errors. What should the taxpayer do when he receives an incorrect customs document?

General characteristics of the import of goods

The import of goods into the territory of the country is one of the activities specified in the Act and is subject to tax on goods and services. The VAT Act states that import should be understood as the import of goods from the territory of a third country to the territory of the European Union.

Pursuant to the provisions of the Act, if the goods are subject to the simplified procedure in the form of entry in the declarant's register, the taxpayer may settle the amount of tax due on the import of goods in the tax return submitted for the period in which the tax obligation for the import of these goods arose. . Settlement of VAT on simplified import of goods in the tax declaration submitted to the competent authority is applied provided that the taxpayer presents to the head of the customs and tax office, before which the taxpayer performs the formalities related to the import of goods:

  • certificates of no arrears in payments of due social security contributions and in payments of individual taxes constituting the income of the state budget, exceeding separately for each title, including separately for each tax, respectively 3% of the amount of contributions due and tax liabilities due in individual taxes; the share of arrears in the amount of contributions or tax is determined in relation to the amount of due payments for the settlement period to which the arrears concern;

  • confirmation of registration of the taxpayer as an active VAT payer.

Apart from the issues of procedures, the import is settled under the reverse charge system, which means that the buyer settles both the output and input tax in the VAT return. According to the general rules, the taxpayer has the right to deduct input tax on the basis of an appropriate document. In the case of importing goods, such a document is a customs document. Thus, when importing goods for VAT purposes, the invoice is not relevant.

Example 1.

The taxpayer imported goods from China. The amount of the input tax indicated in the customs document is PLN 1,500. This means that the taxpayer is obliged to show in the tax declaration the amount of input tax in the amount of PLN 1,500 and the tax due on this account, also in the amount of PLN 1,500.

The taxpayer may deduct this tax in the settlement for the period in which he received the customs document or in the settlement for one of the next two accounting periods.

No right to deduct input tax from the customs document

The content of the VAT Act also indicates the circumstances when the buyer's right to deduct input tax resulting, inter alia, from from the customs document. Following Art. 88 sec. 3a point 4 of the VAT Act do not give the right to deduct tax documents:

a) stating activities that have not been performed - in the part concerning these activities,

b) giving incorrect amounts - in the part concerning those items for which the amounts are incorrect,

c) confirming the activities to which the provisions of Art. 58 and 83 of the Act of 23 April 1964 Civil Code (Journal of Laws of 2017, item 459) - in the part relating to these activities.

It follows from the above that, with regard to the refusal of the right to deduct from a customs document in the event of a wrong customs document, it is important what kind of error we are dealing with.

Invalid customs document

It happens that a taxpayer receiving a customs document which is the basis for a tax deduction finds errors or irregularities in its content. In such a situation, it is crucial to identify the materiality of the error. For if an incorrect customs document contains a description of activities that never took place or provides amounts inconsistent with reality, the taxpayer may not deduct the input tax resulting from such a document.

If, on the other hand, the nature of the error, although it concerns the units of measurement or even the quantity of a given good, does not in any way affect the price agreed between the parties, it does not exclude the possibility of deducting input tax on this account.

This position was confirmed by the Director of the Tax Chamber in Łódź in the individual ruling of March 27, 2014, ref. IPTPP2 / 443-988 / 13-6 / KW, which stated:

Bearing in mind the presented description of the facts and the cited legal provisions, it should be noted that in a situation where the customs declaration in question documents the actual act of importing the goods, the amount of VAT has been correctly shown, while the errors in the above-mentioned the customs declaration concerned the quantity of imported goods and measurement units and they do not affect the price actually agreed between the parties to the transaction and actually paid, then in the light of these circumstances, the negative premises mentioned by the Applicant, referred to in Art. 88 sec. 3a point 4 of the Act.

Therefore, since the Interested Party is an active VAT taxpayer and the purchased goods are used to perform activities subject to tax on goods and services, the Company has the right to reduce the output tax by input tax resulting from the customs document, provided that the other negative conditions contained in Art. 88 of the Act.

The taxpayer has the right to deduct input tax in the settlement for the period in which he received the customs document, in accordance with art. 86 sec. 10 point 1 of the Act. If the taxpayer fails to reduce the tax due in the above-mentioned time, then - pursuant to Art. 86 sec. 11 of the Act - has the right to reduce the amount of tax due in the tax return for one of the next two accounting periods.

Example 2.

The taxpayer purchased goods from Saudi Arabia. In the received customs document, he found errors in the quantity of the goods received, but the tax amount was shown correctly and in a manner consistent with the contractual arrangements between the parties. In the light of the cited individual interpretation, the taxpayer, despite errors in the customs document, has the right to deduct the amount of input tax shown in this document.