Documenting the sale by an entity exempt from VAT

Service-Tax

Under the Value Added Tax Act, small entrepreneurs may be exempt from VAT. Such exemptions can be divided into two groups - those related to certain activities (objective exemption) and those related to the entity selling the goods (subjective exemption). Check whether the VAT-exempt entity is required to issue invoices!

VAT exemption

According to the new wording of Art. 113 section 1 above of the Act, sales by taxpayers whose sales value did not exceed the total of PLN 200,000 in the previous tax year are exempt from tax. It should be emphasized that the tax amount is not included in the sales value.

The act, however, provides for some exceptions. Pursuant to Art. 113 paragraph. 13 exemptions do not apply, inter alia, to taxpayers:

  1. making deliveries:
    1. goods listed in Annex 12 to the Act,
    2. goods subject to excise duty, within the meaning of the provisions on excise duty, with the exception of:
      1. electricity (PKWiU 35.11.10.0),
      2. tobacco products,
      3. passenger cars other than those mentioned in point (a) e, classified by the taxpayer, pursuant to the provisions on income tax, as fixed assets subject to depreciation,
    3. buildings, structures or parts thereof, in the cases referred to in Art. 43 sec. 1 point 10 lit. a and b,
    4. construction areas,
    5. new means of transport;
  2. providing services:
    1. legal,
    2. in the field of consultancy, with the exception of agricultural consultancy related to the cultivation and breeding of plants as well as animal breeding and breeding, as well as related to the preparation of a development plan and modernization of a farm,
    3. jewelery;
  3. who do not have their registered office in the territory of the country.

Entity exempt from VAT and the invoice

Pursuant to Art. 106b of the VAT Act, the taxpayer is required to issue an invoice documenting:

  1. sale, including the supply of goods and the provision of services to another taxpayer, value added tax or a tax of a similar nature, or to a non-taxable legal person,

  2. mail order sale from the territory of the country and mail order sale within the territory of the country to an entity other than the above-mentioned,

  3. intra-Community supply of goods (WDT) to entities other than those mentioned in the first point (e.g. non-taxable persons),

  4. receiving all or part of the payment before performing the activities referred to in points 1 and 2 (except for the situation where the payment relates to intra-Community supplies or activities for which the tax obligation arises at the moment of issuing the invoice in the case of broadly understood media).

Sales are exempt from VAT

The act includes a regulation under which the taxpayer is not obliged to issue an invoice when a given sale is exempt from VAT. In this case, however, attention should be paid to the fact that at the request of the buyer, the taxpayer is obliged to issue it. Such a request is ineffective if it occurs after 3 months from the end of the month in which the goods were delivered or the service was performed, or the whole or part of the payment was received.

Until the end of 2013, taxpayers exempt from VAT were required to issue an invoice, but only at the time when they registered and were registered as exempt from VAT. From the beginning of 2014, under the new regulations, invoices can also be issued by taxpayers exempt from VAT who have not submitted a registration application.

Elements of an invoice without VAT

  • date of issue;

  • a sequential number, based on one or more series, that uniquely identifies the invoice;

  • the first and last names or names of the taxpayer and the buyer of the goods or services and their addresses;

  • the number by which the taxpayer is identified for the tax, subject to paragraph 2. 2 point 11 lit. and;

  • the date on which the delivery of the goods or the service was completed or completed, if such a date is specified and differs from the invoice issue date; in the case of continuous sales, the taxpayer may indicate on the invoice the month and year of sale;

  • name (type) of goods or services;

  • measure and quantity (number) of goods delivered or scope of services rendered;

  • unit price of a good or service without the tax amount (net unit price);

  • the amount of any rebates, including for early receipt of receivables, unless they are included in the net unit price;

  • the value of the goods delivered or services performed covered by the transaction,

  • total amount due.

Additionally, the invoice without VAT must contain:

  • provision of the act or act issued on the basis of the act, on the basis of which the taxpayer applies the tax exemption or

  • a provision of the directive which exempts such a supply of goods or services from tax or

  • another legal basis which indicates that the supply of goods or services is exempt.