An invoice for an EU contractor for a service - how to issue it?

Service-Tax

The European Union allows full freedom to conclude agreements between the countries of the community, which contributes to increasing the number of transactions concluded between Polish and foreign contractors. When concluding a transaction with a foreign partner, Polish entrepreneurs often have a problem with how to correctly issue a sales invoice and, above all, in accordance with what regulations? Below we describe how to issue an invoice for an EU contractor and what should be included.

Determining the place of service provision

In the first place, it is necessary to determine the place of service provision. It is very important for determining the correct method of VAT settlement. On its basis, the obligation to settle the tax arises.

As a general rule, the place of supply of services to non-taxable entities is the area where the customer has his registered office or permanent establishment. On the other hand, the detailed places of service provision are indicated in Art. 28b. the VAT Act, which is presented in the table below.

Type

Place of service provision

General rule

The seat of the service recipient

Services supplied for the customer's fixed place of business, which is different from his place of business

The service recipient's permanent place of business

The recipient does not have a seat or a permanent place of business

Habitual residence or habitual residence of the customer

Of course, from the above examples, there are a number of exceptions listed in the VAT Act in Art. 28d, art. 28e, art. 28f paragraph. 1, 2 and 3, art. 28 g of paragraph 1. 2 and art. 28h-28n. These include, among others services:

  • transport (including sea and air transport),
  • related to real estate,
  • touristic,
  • cultural,
  • sports and educational,
  • restaurant and catering.

The service is provided in Poland for a foreign client

Application of Art. 28b of the VAT Act relates to the provision of both domestic and foreign services to taxpayers. Then, the general rule indicates that the place of supply of services is the seat of the service recipient's business. On the other hand, the provision of services to natural persons who are not taxpayers is specified in Art. 28c. above the law. In this case, the place where the services are supplied is the place where the provider has his establishment. Therefore, if a Polish taxpayer provides a service to a foreign customer who is a natural person, and the place of service provision is Poland, he is obliged to tax the service at the appropriate VAT rate for a given service in Poland.

Registration for EU VAT

An entrepreneur who wants to make transactions with foreign contractors within EU Member States must take into account the obligation to register for EU VAT purposes, which applies to both active and exempt VAT taxpayers. Registration should be made on the basis of a VAT-R application, in which part C.3 must be completed. After meeting the formal requirements, the entrepreneur will receive the EU NIP number, authorizing him to perform foreign transactions with contractors from the European Union countries.

Invoice for a contractor from the EU

In terms of identification data, the invoice for the EU contractor should contain the EU VAT number of the buyer and the recipient. You can use the VIES system to check if your EU VAT number is active. In the case of the provision of services for which Art. 28b of the VAT Act, it is also important to add appropriate content later in the invoice.

If it is a foreign contractor that is obliged to settle the value added tax, then the invoice should not contain the amount of tax and the VAT rate. In this field, the annotation "np" is most often used - it is not subject to taxation. Additionally, art. 106e section 1 point 18 states that the invoice should also contain the word “reverse charge”.

Article 106e (1) (18) of the VAT Act
(...) in the case of the supply of goods or the performance of a service for which the buyer of goods or services is obliged to settle tax, value added tax or a tax of a similar nature - the words "reverse charge".

This was confirmed by the Director of the Tax Chamber in Katowice in the interpretation of January 15, 2015, No. IBPP4 / 443-570 / 14 / LG:

“(...) in a situation where a German contractor is obliged to settle value added tax due to the provision of a service, the Company should document the service provided with an invoice issued in accordance with the provisions of the Act, entering on it the annotation" reverse charge ".

At the same time, the tax rate and amount should not be indicated on the invoices issued.

In connection with the above, the Applicant correctly documents the service in question by issuing a VAT invoice with the rate, eg (not subject to). ”

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Issuing a sales invoice for an EU contractor in the wfirma system

The wfirma.pl system allows you to easily issue invoices for foreign contractors. To do this, go to the tab REVENUE »SALE» EXHIBITION »INVOICE and complete the individual fields. In the recipient's data, indicate the country and enter the tax identification number. For contractors from EU countries, enter the EU VAT number. Then select the "NON-EU" rate which is appropriate for the intra-Community supply of services to taxable counterparties.

Then, in the ADVANCED tab, select the currency and language in which the document is to be issued.

The printed invoice will show the sales amount in both currencies. The value in a foreign currency will be automatically converted into Polish zlotys at the average exchange rate of the National Bank of Poland from the last business day preceding the sale date or the invoice issue date, whichever is earlier.

After saving, the value in Polish currency from the invoice for the EU contractor will be posted to the VAT Sales Register and KPIR in column 7 or the Revenue Register (flat rate), depending on the form of taxation.