Import of services from European Union countries - how to settle the invoice?

Service-Tax

Entrepreneurs purchasing services from a contractor from another Member State are required to account for the purchased services as import of services in the EU. How to settle the import of services from the European Union countries? Answer in the article!

Registration for VAT-EU and import of services from European Union countries

Entrepreneurs carrying out foreign transactions are required to submit a VAT-EU application prior to carrying out a foreign transaction. Registration is made on the VAT-R form, which is submitted to the competent tax office due to the place of residence (in the case of natural persons) or place of business (in the case of persons who are not a natural person). You must register when the taxpayer performs:

  • intra-Community acquisition of goods;
  • intra-community delivery of goods;
  • import of services, where the place of supply is the country of the buyer;
  • providing services to contractors from the EU, where the place of providing the service is the country of business or residence of the buyer other than Poland;
  • intra-community transactions and movement of goods under the call-off stock procedure.

Import of services from European Union countries - definition

Pursuant to Art. 2 point 9 of the VAT Act, the import of services from European Union countries takes place when a foreign entrepreneur with a seat in a country of the European Union is a value added taxpayer and provides services to the Polish buyer. Therefore, a Polish entrepreneur has a tax obligation for the service provided pursuant to Art. 17 sec. 1 point 4 of the VAT Act. You should know that in the case of importing services, art. 28b, entrepreneurs do not have to submit VAT-EU information to the tax office.

Place of service provision

According to Art. 28b of the VAT Act, the place of service provision (place of taxation) is:

  • place of business, in the case of providing services to the taxpayer;
  • a fixed place of business, where the services are provided at a fixed place of business which is different from the place of business;
  • place of residence or permanent residence, in the case of a taxpayer who has no registered office or permanent place of business;
  • the place of establishment of the service provider, in the case of persons who are not taxable persons in accordance with art. 28c.

There are some exceptions to the above terms for services:

  • related to real estate (the place where the service is provided is the place where the real estate is located);
  • related to the transport of goods and passengers (according to the general rules, the place where the service is provided is the place where the service is provided);
  • restaurant and catering (place of service provision);
  • related to admission to cultural, educational, entertainment, etc. events (place where the event takes place).

According to the general rule, the taxpayer is obliged to recognize the import of services according to the above conditions. Usually, the foreign contractor submits the invoice in a foreign currency and the Polish taxpayer, in addition to recognizing the import, is obliged to convert the invoice amounts into Polish currency at the appropriate exchange rate according to the National Bank of Poland (the average exchange rate of a given currency announced by the National Bank of Poland on the day preceding the date of the tax obligation).

Example 1.

An employee on a business trip in Germany accidentally flooded a company laptop. The head of the enterprise offered to repair it at his own expense. Therefore, the employee reported to a company in Germany dealing with computer repair. The Polish taxpayer will be obliged to settle the import of services and calculate the tax, because the place where the service is provided is the place of the taxpayer's seat.

Import of services from European Union countries and the tax obligation

Pursuant to Art. 19a of the VAT Act, the tax obligation, according to the general rule, arises at the moment of:

  • delivery of goods or services;
  • make the payment.

The tax obligation in the case of import of services follows the general rule, as in the case of domestic transactions. This means that the taxpayer is obliged to settle the import of services from European Union countries on the date of sale or on the date of payment, whichever comes first. You should also know that if the payment is partial and has been made before the service has been performed, then you need to settle the VAT due in the amount of the payment made, and the remaining part at the time of the service (if the payment has not already taken place in the remaining value).

Example 2.

An entrepreneur has purchased an online program in Germany which he uses in the course of his business. The payment was made in August, and the access to the platform and receipt of the invoice in September.

The taxpayer is obliged to settle the invoice in August on the basis of VAT and thus recognize the import of services under Art. 28b, because the payment occurred first - while on the basis of PIT in September, because then the invoice for services was issued.

Example 3.

A company that has frequent contact with foreign entities on January 1, 2021, acquired access to the German platform for training purposes for employees; the useful life is one year and ends on December 31, 2021. The invoice for the services provided was issued by a German contractor on January 15, 2021, and paid on January 20, 2021. The taxpayer is obliged to settle the import of services on December 31, 2020, when the last day of service provision took place (if the payment was earlier, then on the day of payment).

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Example 4.

The company acquired access to the German platform on January 1, 2020, valid until the end of 2020. The taxpayer received an invoice for services on February 28, 2020. However, the payment was made on March 1, 2020. The enterprise is obliged to settle the import of services, art. 28b on March 1, 2020, because then the tax obligation arose.

VAT exemption and import of services from European Union countries

A taxpayer exempt from VAT in the case of purchasing a service in the territory of the EU is also obliged to settle the import of services, art. 28b, if there was an intra-Community purchase of the service. At the same time, he is obliged to charge VAT on his side and pay it to the tax office. It should be emphasized that the VAT paid by the non-VAT resulting from the import of services may be included in the tax costs on the date of payment.

Due to the fact that the VAT payer does not send JPK_V7 to the tax office, he is obliged to settle the transaction in the VAT-9M declaration or VAT-8 declaration by the 25th day of the month following the month in which the service or payment was performed, depending on what came first.

The VAT-9M declaration is submitted in the case of:

  • taxpayers who are subjectively exempt from VAT;
  • failure to register for VAT-EU on the basis of WNT by sending a VAT-R declaration to the tax office;
  • purchasing a service in the territory of the EU or outside the EU, for which it is obliged to settle VAT.

On the other hand, the VAT-8 declaration is submitted in the case of:

  • taxpayers who are subjectively exempt from VAT;
  • performing VAT-EU registration on the basis of WNT by sending the VAT-R application to the tax office;
  • WNT transactions;
  • purchasing a service in the territory of the EU or outside the EU, to which it is obliged to settle VAT.

Import of services from European Union countries in the wFirma.pl system

In the wFirma.pl system, in order to post an invoice for the import of services from European Union countries, go to the EXPENSES »ACCOUNTING» ADD »VAT INVOICE tab. In the window that opens, you must complete the basic data.Then, in the TYPE OF EXPENSE field, select OTHER EXPENDITURE RELATED TO BUSINESS ACTIVITY and go to the IMPORT FROM ABROAD AND OTHER ADVANCED sub-tab and select the ARTICLE SERVICES IMPORT box. 28B.

Then, in the BASIC INFORMATION tab, select the appropriate dates in the field:

  • INVOICE ISSUE DATE - you must select the actual date of issue;
  • DATE OF ACCOUNTING FOR KPIR - you need to select the actual date of issue;
  • DATE OF ACCOUNTING FOR VAT - you need to select the date when the tax obligation arises.

The posted invoice will be included in the sales and purchase VAT register and in the Polish Register of Taxes in column 13. "other expenses".

If a currency other than Polish has been used, go to the EXPENSES »ACCOUNTING» ADD »VAT INVOICE tab. In the opened window, go to the IMPORT FROM FOREIGN AND OTHER ADVANCED sub-tab and select the appropriate currency in the CURRENCY field.

The posted invoice will be entered in the sales and purchase VAT register and in the KPiR in column 13. "other expenses" at the appropriate rate.

Posting an invoice for the import of services from European Union countries by a taxpayer exempt from VAT in the wFirma.pl system

To include the expense documenting the import of services from European Union countries in the case of non-VAT, go to the EXPENDITURE »ACCOUNTING» ADD »EXPENSES tab. In the window that opens, complete the basic data, and select OTHER EXPENDITURE RELATED TO BUSINESS ACTIVITY in the TYPE OF EXPENSE field. Then go to the IMPORT FROM ABROAD AND OTHER ADVANCED sub-tab and select the option IMPORT ART SERVICES. 28B and select the correct VAT rate and enter the amount from the invoice.

The booked invoice will be entered into the VAT registers of foreign transactions and in the Polish Register of Taxes in the column 13. "other expenses". The transaction should be indicated on the VAT-9M or VAT-8 declaration, depending on whether intra-community tax was reported in a given month.