What is WDT - definition and examples

Service-Tax

What is WDT? Well, intra-Community supply of goods (intra-Community supply of goods) consists in the export of goods from the country to a taxpayer running a business in another country located in the European Union, as a result of which the right to dispose of goods is transferred as the owner. WDT occurs, for example, in the case of the sale of goods by a Polish company to an entrepreneur who operates in Spain and is an EU VAT taxpayer.

Is it always WDT?

However, it should be remembered that not every export of goods from the country's borders is considered as intra-Community supply. In art. 13 sec. 4 of the Act on tax on goods and services, all exclusions are listed, they include, among others:

  • mail order sale, which we deal with when the delivery of goods takes place on behalf of an entity that is not a taxpayer or does not account for intra-Community acquisition of goods,
  • goods are moved on board ships, airplanes or trains in the course of passenger transport on the territory of the European Union for the purpose of their delivery by that taxpayer on board these vehicles,
  • goods are to be temporarily used by a Polish taxpayer in the territory of a Member State other than the territory of the country, but not longer than for 24 months, provided that the import of such goods from the territory of a third country would be duty-free due to their temporary importation.

Example. 1

A construction company that transported the machinery in order to perform a 6-month service on French territory cannot recognize transport as WDT due to the temporary nature of the service (up to 24 months).

It is worth noting that it is planned to introduce changes to the draft act on tax on goods and services, aimed at adjusting the EU regulations. The amendment is to abolish the time limit that does not exist in EU law.

When is the 0% VAT rate for intra-Community supplies?

The intra-Community supply of goods is, in principle, taxed at the 0% rate, but its application requires two conditions. First of all, the supplier of the goods should have a proper and valid identification number for the purposes of an intra-Community transaction. The buyer under the WDT should also have a valid identification number (EU VAT). The buyer may also be a legal person that is not a taxpayer. It is worth noting that in the case of delivery of a new means of transport, the status of the entities does not matter.

The supplier should check the credibility of the buyer's NIP number, otherwise the goods are not entitled to apply the preferential 0% rate. The verification is possible thanks to the VAT Information Exchange System- “VIES”.

Secondly, it is necessary to have appropriate evidence confirming the export of goods from Poland and handing them over to the buyer from the territory of another Member State.

Pursuant to Art. 42 of the VAT Act, they belong to them if:

A. the carriage of goods is entrusted to the carrier (forwarder)

- transport documents received from the carrier, which clearly show that the goods have been delivered to their destination in the territory of a Member State other than the territory of the country, and specification of individual pieces of cargo.

B. the goods are exported directly by the taxpayer or the buyer

- proof containing the following information: name or first name and surname and address details of the taxpayer performing intra-Community supplies, as well as the buyer, specification of goods and indication of their quantity, confirmation of receipt of goods by the buyer and specification of the means of transport (type and registration number), the goods are delivered. In addition, it is necessary to specify the individual items of cargo.

C. the export takes place by the buyer of the new means of transport without the use of another carrier

- export document containing: data on the taxpayer and buyer, data enabling identification of the delivery item as a new means of transport, delivery date, signature of the taxpayer and buyer, buyer's declaration on the export of a new means of transport outside the territory of the country up to 14 days, instruction of the buyer about the consequences of failure to comply with the obligation of the date of exportation of the goods. Specification of individual cargo items is also required.

It is worth remembering that pursuant to Art. 2 of the VAT Act, a new means of transport should be considered a vehicle that was put into service no more than 6 months ago or traveled no more than 6,000 km.

In the event that the presented documents do not clearly confirm the delivery of goods to the buyer, the basis for recognizing the WDT may be supplementary documents: business correspondence with the buyer (including his order), documents regarding insurance or freight costs, a document confirming payment for the goods, e.g. an extract bank (valid only if the delivery is paid for) or, if the obligation is performed in a different form - stating the expiry of the obligation, proof of acceptance by the buyer of the goods in a territory other than domestic.