When is it not necessary to settle WNT?

Service-Tax

As a rule, entrepreneurs purchasing goods from contractors from other EU Member States are required to settle the intra-Community acquisition of goods. However, in some situations it is possible to derogate from this obligation.

When are we dealing with WNT?

Tax on goods and services tax is subject to, inter alia, intra-Community acquisition of goods for consideration within the territory of the country.

Pursuant to Art. 97 sec. 1 of the VAT Act, taxpayers subject to the obligation to register as active VAT taxpayers are required, before the date of the first intra-Community supply or the first intra-Community acquisition, to notify the head of the tax office in the registration application of their intention to start performing these activities.

Article 9 (2) 1 of the VAT Act states what is an intra-Community acquisition of goods. In the territory of the Republic of Poland, we deal with it, provided that the buyer of goods is a taxpayer of value added tax, the purchased goods are to be used for activities performed by him as a taxpayer, and the supplier of goods is a taxpayer of value added tax.

WNT occurs when:

  • goods are purchased for remuneration within the territory of the country,

  • the buyer acquires the right to dispose of the goods as the owner,

  • the goods as a result of the delivery carried out are dispatched or transported in the territory of a Member State other than that of the Member State where dispatch or transport begins by the person delivering the goods, the buyer of the goods, or on their behalf.

WNT exclusions

However, in certain situations, there is no intra-Community acquisition of goods. This happens when it is made by specific groups of buyers defined in Art. 10 sec. 1 point 2 of the VAT Act. This exclusion covers:

  • flat-rate farmers for their agricultural activities,

  • taxpayers who only perform activities other than those subject to tax and who are not entitled to reduce the amount of tax due by the amount of input tax on the purchase of goods and services,

  • taxpayers whose sale is exempt from tax pursuant to art. 113 paragraph. 1 and 9 of the VAT Act,

  • legal persons that are not taxpayers.

As it follows from this, there is no obligation to settle intra-group fees, inter alia, in the case of small entrepreneurs, the sale of which is exempt from tax on goods and services pursuant to Art. 113 paragraph. 1 and 9 of the VAT Act.

Importantly, the use of the said exemption is possible, provided that the total value of the intra-Community acquisition of goods in the territory of the country with the indicated entities did not exceed PLN 50,000 during the tax year.

However, after exceeding it, Art. 10 sec. 5 of the VAT Act. Pursuant to the aforementioned provision, it is considered that from the moment the indicated amount is exceeded, the intra-Community acquisition of goods has already taken place. Moreover, it is required that the total value of the intra-Community acquisition of goods within the territory of the country should not exceed PLN 50,000 also in the previous tax year (Article 10 (2) of the Act).

The consequence of exceeding the limit amount in a given tax year is therefore not only the obligation to settle intra-Community acquisition of goods by the end of that year, but also in the following year. Any return to tax exclusion will be allowed only after this next tax year, provided that the limit of PLN 50,000 is not exceeded.

Pursuant to Art. 10 (4) of the VAT Act, when calculating the limit of PLN 50,000, Art. 10 sec. 4 of the Act:

  • the amount of value added tax due or paid within the territory of the Member State from which the goods are dispatched or transported;

  • values ​​from intra-Community acquisition of new means of transport and excise goods.

The above-mentioned exemption does not apply if the subject of the purchase are:

  • new means of transport;

  • excise goods.

Exceeding the limit

When the limit value of PLN 50,000 is exceeded, it is considered that the intra-Community acquisition of goods has already taken place. In such a case, the entire value of the transaction that resulted in the excess of this amount is subject to taxation. Thus, it is not correct to divide a given acquisition and to tax only the surplus above the indicated limit as an intra-Community acquisition of goods.

Position of the Director of the National Tax Information in the individual ruling of April 18, 2014, file ref. 3063-ILPP1-3.4512.73.2017.2.KB, is as follows:

(...) in accordance with Art. 97 sec. 1 of the act, taxpayers referred to in art. 15, subject to the obligation to register as active VAT payers, are required before the date of the first intra-Community supply or the first intra-Community acquisition to notify the head of the tax office in the registration, referred to in article 2. 96 about the intention to start performing these activities.

Pursuant to Art. 97 sec. 2 of the Act, the provision of para. 1 also applies to taxpayers within the meaning of article 3. 15 other than those mentioned in sec. 1 and non-taxable legal persons within the meaning of art. 15, where the value of the intra-Community acquisition of goods exceeded the amount referred to in article 1. 10 sec. 1 point 2, and those who intend to use the option specified in art. 10 sec. 6.

The head of the tax office confirms the registration of the entity referred to in paragraph 1. 1-3, as an EU VAT taxpayer (Article 97 (9) of the Act).

Taking into account the above provisions, it should be stated that in connection with the purchase of construction products in Germany intended for the renovation of district public roads, the value of which will exceed PLN 50,000, the Applicant will be obliged to register as a VAT-EU taxpayer by submitting a registration application (...) .

A taxpayer benefiting from a VAT exemption, who will be obliged to tax intra-Community acquisition of goods due to exceeding the limit of PLN 50,000, should register as an EU VAT taxpayer. For this purpose, he must submit a VAT-R form.