Import and export based on VAT - basic information

Service-Tax

Nowadays, Polish entrepreneurs are increasingly boldly entering foreign markets, exporting their services and goods. Import of goods and services from foreign contractors is also becoming more common. Statistics show that the turnover of goods and services with foreign countries is growing every year. Due to the fact that such transactions are subject to separate VAT regulations, in order to correctly settle them, it is worth getting acquainted with the basis at the beginning, i.e. the definitions contained in the VAT Act. How should import and export VAT be accounted for?

Import and export based on VAT - introduction

The basic legal act in which to look for a definition of the import of goods and services is the VAT Act. The import of goods is defined in art. 2 point 7 of the above-mentioned the law. According to its wording, this type of transaction is understood as the import of goods from the territory of a third country to the territory of the European Union. However, according to Art. 2 point 9 of the VAT Act, the import of services is the provision of services for the performance of which the recipient is the taxpayer, as referred to in art. 17 sec. 1 point 4, i.e .:

  • legal person,

  • an organizational unit without legal personality,

  • a natural person,

purchasing services, provided that the conditions specified in the Act are met (points a and b).

art. 17 sec. 1 point 4 pointsa) the service provider is a taxpayer who has no registered office or fixed establishment in the territory of the country, and in the case of services to which Art. 28e, the taxpayer is not registered in accordance with article 5. 96 sec. 4, sub-pointb) the recipient is: in the case of services to which Art. 28B-the taxpayer referred to in art. 15, or a non-taxable legal person referred to in art. 15, registered or obliged to register in accordance with art. 97 sec. 4, a in other cases - the taxpayer referred to in art. 15, having a registered office or a permanent place of business in the territory of the country or a non-taxable legal person referred to in art. 15, established in the territory of the country and registered or obliged to register in accordance with art. 97 sec. 4;

With regard to export transactions, we can distinguish the export of goods and services. According to the definition, the export of goods is the delivery of goods dispatched or transported from the territory of a country outside the territory of the European Union through:

  • supplier or on his behalf or

  • a buyer established outside the territory of the country or on its behalf, with the exception of goods exported by the buyer himself for the purpose of equipping or supplying recreational craft and tourist aircraft or other means of transport for private purposes,

if the export of goods outside the territory of the European Union is certified by the customs office specified in the customs regulations.

Importantly, exports of goods are also considered to be such goods export transactions to third countries, the export procedure of which began in a Member State of the European Union other than Poland.

In the case of the export of services, the matter is not so clear. The export of services is considered to be the provision of services by Polish taxpayers, which is subject to VAT in a country other than Poland - usually in the country of the buyer, because according to the regulations, this is where the services are provided.

Art. 28b. 1.The place of supply of services in the case of the provision of services to the taxpayer is the place where the taxpayer who is the recipient of the service has its registered office, subject to paragraph 2-4 and art. 28e, art. 28f paragraph. 1 and 1a, art. 28 g of paragraph 1. 1, art. 28i, art. 28j paragraph. 1 and 2 and article. 28n.

The notion of the territory of a country, a Member State, a third country and the European Union

When considering import and export on the basis of VAT, it is worth distinguishing the basic concepts related to it. The VAT Act also specifies what should be understood by the territory of the country, the territory of a Member State, the territory of a third country and the territory of the European Union.

The territory of the country is considered to be the territory of the Republic of Poland (subject to Article 2a), while the territory of a Member State (Article 2 (4)) is considered to be the territory of the states included in the territory of the European Union (subject to Article 2a). In turn, the territory of a third country is the territory of a country that is not part of the territory of the European Union (subject to Article 2a)

What is the territory of the European Union according to the VAT Act? This concept is defined by Art. 2 point 3 of the Act and according to it these are the territories of the Member States of the European Union, where, for the purposes of the application of this Act:

  • The Principality of Monaco shall be treated as the territory of the French Republic, the Isle of Man shall be treated as the territory of the United Kingdom of Great Britain and Northern Ireland, the sovereign zones of Akrotiri and Dhekelia shall be treated as the territory of the Republic of Cyprus,

  • the following territories of individual Member States shall be considered excluded from the territory of the European Union:

- the island of Heligoland, the territory of Buesingen - of the Federal Republic of Germany,

- Ceuta, Melilla, Canary Islands - from the Kingdom of Spain,

- Livigno, Campione d "Italia, the Italian part of Lake Lugano - from the Italian Republic,

- overseas departments of the French Republic - from the French Republic,

- Mount Athos - from the Hellenic Republic,

- Aland Islands - from the Republic of Finland,

- Channel Islands - from the United Kingdom of Great Britain and Northern Ireland,

  • Gibraltar is treated as excluded from the territory of the European Union.

As you can see when settling imports and exports on the basis of VAT, in the appropriate classification of transactions, the key factor will be the provision of the service or delivery of the goods, the seat of the buyer and supplier, as well as the method and form of delivery.