What are intra-Community tripartite transactions and when do they arise?

Service-Tax

The complexity of triangular transactions and the emergence of circumstances in economic practice imposing additional obligations and formal burdens, the legislator tried to introduce regulations aimed at simplifying intra-EU chain transactions, known as intra-community EU transactions (WTT - Intra-Community Tripartite Transactions).

How to understand intra-Community tripartite transactions?

Due to the complexity and inconvenience of general VAT taxation rules (e.g. the obligation to register for VAT purposes in another country), entities participating in EU chain transactions may use a simplified taxation procedure for a given transaction. Before clarifying this, however, the first step is to explain what an intra-Community EU transaction is.

WTT is understood as a transaction in which the following conditions are jointly met:

  1. there are three entities in the transaction,

  2. are VAT (value added tax) taxpayers,

  3. they are also identified for the purposes of intra-Community transactions (VAT-EU) in three different Member States involved in a given supply of goods,

  4. the transaction takes place as follows - the first of them releases the goods directly to the last one in the order, and the delivery of the goods is made between the first and second and the second and last in order,

  5. the subject of delivery is dispatched or transported by the first, or transported by or on behalf of the second VAT payer, from the territory of one Member State to the territory of another Member State.

All the above conditions must be met for an intra-Community EU transaction to take place.

Simplified procedure for intra-Community triangular transactions

Considering many problematic circumstances occurring in the course of conducting tripartite transactions, the legislator created the simplified WTT procedure. It is understood as the procedure of VAT settlement in an intra-Community triangular transaction, consisting in the fact that the last VAT payer settles VAT for the delivery of goods for him by the second VAT payer, if the following conditions are jointly met:

  1. the delivery to the last VAT payer was immediately preceded by the intra-Community acquisition of goods from the second VAT payer,

  2. the second VAT taxpayer supplying the last VAT payer does not have a registered office in the territory of the Member State where transport or shipment ends,

  3. the second-highest VAT payer uses the same VAT identification number for the first and last VAT payer, which has been assigned to him by a Member State other than the one in which transport or shipment begins or ends,

  4. the last VAT payer uses the VAT identification number of the Member State where transport or shipment ends,

  5. the last VAT payer was indicated by the second VAT payer as obliged to settle VAT on the delivery of goods carried out under the simplified procedure.

In the case of the simplified procedure, the legislator found that the intra-Community acquisition of goods was taxed with the second-largest VAT payer.

Additional invoice elements in case of simplified procedure

The legislator assuming (in the case of the simplified procedure) that the intra-Community acquisition of goods was taxed with the second-highest VAT taxpayer, indicated a situation in which the second-highest Polish VAT payer (VAT-EU), when issuing an invoice to the last VAT payer, is obligated, apart from the basic elements include the following data:

  1. the annotation "VAT: EC invoice simplified pursuant to Art. 135-138 of the Ptu Act" or "VAT: EC invoice simplified pursuant to Art. 141 of Directive 2006/112 / EC",

  2. a statement that the tax for the delivery will be settled by the last VAT payer,

  3. the number referred to in art. 97 sec. 10, which is applied by him to the first and last taxpayer of value added tax,

  4. identification number used for the purposes of value added tax of the last taxpayer in the order,

If, on the other hand, the Polish taxpayer is the third party to the transaction, then he should also receive an invoice containing the above elements (in accordance with the common EU regulations and the VAT Act of the country of the second in the order of transactions of the taxpayer).

It is worth noting that the simplified WTT procedure will also apply in a situation where the last subject of the transaction is a legal person, not being a VAT payer, but still being a VAT-EU taxpayer (identified for the purpose of conducting EU transactions in the Member State where the goods are located at the time of completion transport or shipping).

Additional data in VAT registers

Apart from the facilities related to the simplified procedure, the legislator introduced the requirement of additional data to be included in the VAT register, and made the type of required data dependent on the order of the Polish taxpayer in the intra-community EU transaction.

In the VAT register, the Polish taxpayer is obliged to provide the following information:

  1. if he is the second taxpayer - the agreed remuneration for supplies under the simplified procedure and the name and address of the last VAT payer (a legal person not being a value added tax payer, obliged to settle VAT on this transaction),

  2. if it is the last taxpayer:

  3. turnover (without the tax amount) due to the delivery of WTT for him and the amount of tax for this delivery, which is his intra-Community acquisition of goods,
  4. name and address of the second highest value added tax payer.