Import and export and VAT - Export of services
The definition of export of services is not specified in the VAT legislation. In practice, this concept is understood as all services performed by a Polish taxpayer for contractors who have their registered office, permanent place of business, residence or stay outside Poland. The export of services places certain obligations on the trader in terms of taxation - fortunately, they are not that complicated.
Tax obligation when exporting services
The obligation to tax exported services with VAT is based primarily on Art. 28b of the VAT Act, according to which the place of supply of services to the taxpayer is the place where the taxpayer who is the recipient of the service has its registered office. In practice, this means that regardless of whether the service is provided in Poland or abroad, the recipient of the service will be the entity competent to pay the tax.
The above provision, however, only applies to companies. If a Polish entrepreneur happens to provide services to a foreign entity that is not a company, then the obligation to tax the service rests with him, as the service provider. Such an assumption results from the provision 28c of the Act.
In addition, the VAT Act, apart from the above division of places of taxation according to the type of recipient, distinguishes exceptions regarding the nature of the service provided. They concern:
- real estate - in accordance with art. 28e the place of providing real estate services - including those provided by appraisers, real estate agents, accommodation services in hotels or facilities with a similar function (holiday centers, places intended for use as campsites), use and use of real estate as well as preparation and coordination services construction works (e.g. architects' services and construction supervision), is the location of the property,
- transport of passengers - in accordance with art. 28f paragraph. 1 in this case, the place where the service is provided is the country in which the transport takes place, taking into account the kilometers traveled,
- admission to events - in accordance with art. 28g (1) - e.g. cultural, artistic, sports, scientific, educational, including fairs, exhibitions, and auxiliary services related to admission services to these events - in this case, the place of taxation is the place where the events actually take place,
- services in the field of culture, art, sports, science, education, entertainment, etc., and ancillary services to these services - in accordance with art. 28 g of paragraph 1. 2, the place of their taxation is the place where such activity is actually performed,
- restaurant and catering services - in accordance with art. 28i - their place of taxation is the place where they are actually provided,
- short-term rental of means of transport - in accordance with Art. 28j, here the place of taxation is the place where these means of transport are actually released at the disposal of the recipient,
- tourist services - in accordance with art. 28n - the place of taxation is the country in which the service provider is established or resident.
In addition to the place of taxation when exporting services, it is also important to determine the moment when the tax obligation arises. According to Art. 109 paragraph. 3a, in the case of services specified in art. 28B, the tax obligation shall be determined in accordance with art. 19 paragraph 19a of the Act. Therefore, in the case of the export of services, the tax obligation, as a rule, will arise upon the provision of the service.
When selling services outside the country, the Polish entrepreneur applies, as a rule, the "not subject" rate. The prerequisite for the application of such a rate is, however, keeping records for VAT purposes.
If there is no such register in the company, it means that the entrepreneur benefits from a subjective exemption from VAT. In such a situation, however, he will be obliged to tax the service in accordance with the rates applicable in the territory of his country.
Service export documentation
In the case of the export of services outside Poland, the taxpayer does not have documentation similar to, for example, a SAD document confirming the export of goods outside the country and the Community. How to document the performance of the service outside the country?
In this case, the invoice documenting the export of services is of great importance. Such a document contains VAT rates or charges with tax - only the net amount. However, an additional element is the phrase "reverse charge".
In addition, it is worth ensuring that you have additional documents about the transaction - payment receipts, bank statements or agreements concluded with a foreign contractor regarding the service provided.