When does the tax obligation arise on delivery by courier?
Entrepreneurs are opening their stores on the Internet more and more often. Online trade is one of the fastest growing sectors of the economy. Many young customers buy mainly online. Of course, opening an e-shop is a big challenge. An entrepreneur who wants to appear in the network must, apart from the so-called network marketing to be able to ensure fast and efficient delivery of your goods. Due to such demand, more and more courier companies operate on the market in Poland. When running an online store, a company must pay attention to the moment when the VAT obligation arises. In the case of an online store, we do not have direct contact with the customer. When delivering the ordered goods, we use an intermediary, which is usually a courier company. In the following article, we will discuss when a tax obligation arises on delivery by courier.
Tax obligation on delivery by courier and the time of delivery of the goods
According to the general rule expressed in Art. 19a paragraph. 1 of the Act of March 11, 2004 on tax on goods and services (i.e. Journal of Laws of 2017, item 1221), hereinafter referred to as the "VAT Act", the tax obligation arises when the goods are delivered or the service is provided, subject to paragraph 5 and 7-11, art. 14 sec. 6, art. 20 and art. 21 sec. 1.
This general rule resulting from the wording of the above-mentioned Art. 19a paragraph. 1 of the Act indicates that the tax obligation arises upon the delivery of goods or the performance of a service. Pursuant to this regulation, the tax will become due in the month when the goods are delivered or the service is provided and, as a rule, should be settled for this accounting period.
Pursuant to Art. 19a paragraph. 8 of the VAT Act, if before the delivery of the goods or the performance of the service, all or part of the payment was received, in particular: prepayment, advance payment, advance payment, installment, construction or housing contribution before the establishment of a cooperative right to a dwelling or premises for other purpose, the tax obligation arises upon its receipt in relation to the received amount, subject to paragraph 5 point 4.
When making online sales, it is important to establish when the goods were delivered. In the light of the above provisions, it is of decisive importance for determining the moment when a tax obligation in VAT arises.
supply of goods
Pursuant to Art. 5 sec. 1 point 1 of the VAT Act, taxation of the above-mentioned the tax is subject to the supply of goods for consideration and the provision of services for consideration within the territory of the country.
Goods, pursuant to Art. 2 point 6 of the Act, there are things and their parts, as well as all forms of energy.
Pursuant to Art. 7 sec. 1 of the Act, by the delivery of goods referred to in Art. 5 sec. 1 point 1 shall be understood as the transfer of the right to dispose of the goods as the owner.
When running an online store, we must determine at what point the right to dispose of the goods as owner is transferred (this is important for determining the time of delivery). In his interpretations, the Minister of Finance explains how the transfer of the right to dispose of goods as an owner should be understood.
In the interpretation of the Director of the Tax Chamber in Łódź of February 13, 2014, number IPTPP2 / 443-922 / 13-2 / PR, we read:
'In order to present the correct understanding of the term "transfer of the right to dispose of the goods as owner", it should be noted that it relates to an act of the kind which gives the recipient of the goods the right to deal with him as owner. It should also be recognized that it is primarily about the possibility of actually disposing of a thing, and not disposing of it in a legal sense. The essence of the delivery of goods is not the transfer of ownership, so the return "right to dispose of as owner" cannot be interpreted as "ownership". Going further, it should be pointed out that the transfer of economic ownership does not have to be accompanied by the transfer of ownership in the legal sense, because the "supply of goods" is not limited only to the sale of property rights. "
Delivery of goods in the online store
When running an online store, we can determine in the regulations at what point the disposal of goods is transferred as the owner. The above results from the regulations contained in the Civil Code, specifically Art. 353 of the Civil Code. According to it, the parties concluding the contract may arrange the legal relationship at their discretion, as long as its content or purpose does not contradict the properties (nature) of the relationship, the law or the principles of social coexistence.
In the light of Art. 544 of the Civil Code, if the item sold is to be sent by the seller to a place that is not the place of performance, it is understood in case of doubt that the release was made at the moment when, in order to deliver the item to the place of destination, the seller entrusted it to the carrier engaged in the transport things of this kind. However, in the light of Art.548, at the time of delivery of the sold item, the benefits and burdens associated with the item and the risk of accidental loss or damage are transferred to the buyer.
The above position is confirmed by the interpretation of the Director of the Tax Chamber in Bydgoszcz of December 3, 2015, number ITPP1 / 4512-956 / 15 / MN, in which we read:
"Moreover, as stipulated in Art. 548 § 1 of the Civil Code, the benefits and burdens associated with the goods and the risk of accidental loss or damage to the goods are transferred to the buyer upon the release of the sold item.
The above-mentioned provisions of the Civil Code show that the delivery of the goods takes place at the moment of entrusting the goods by the seller to the carrier with the order to deliver the goods to the destination agreed in advance with the buyer. At the moment when the item has been entrusted to the carrier, the seller is formally fulfilling the service, and the benefits and burdens associated with the item are transferred to the buyer. "
When transferring the above regulations to the provisions on tax on goods and services, it should be stated that in a situation where the goods are sent to the buyer via a courier company, their delivery takes place upon the release of the goods to the entity that is obliged to deliver them, including because at the moment the supplier transfers the right to dispose of the goods as the owner.
In a situation where the payment takes place after the delivery (otherwise, we would have to deal with a prepayment / advance payment / advance payment / installment subject to taxation pursuant to Art.19a (8) of the Act) tax obligation, pursuant to Art. 19a paragraph. 1 of the VAT Act, it arises at the time of delivery, i.e. when the goods are handed over to the courier company.
When drawing up the regulations of the online store, we have the option of determining the moment of delivery, and thus the moment when the VAT obligation arises. In the event that we determine the moment of delivery at the time of transferring the goods to the courier company, it will make it easier for us to determine the tax obligation in VAT.
When setting up an online store, we should prepare ourselves or ask a lawyer to write his regulations, which would indicate that the moment of delivery to the courier is the moment of delivery of goods within the meaning of the VAT Act.
Cash register in the online store
At the outset, it should be remembered that taxpayers selling to natural persons who do not conduct business activity and flat-rate farmers are required to keep records of turnover and amounts of tax due using cash registers.
Thus, when running an online store, we have to print and issue receipts in the case of sales to non-business individuals and flat-rate farmers. We must issue receipts when the goods are delivered to the courier. At this point, a tax obligation arises when delivering by courier (appropriate assumptions in the store regulations)
The Ordinance of the Minister of Finance of December 16, 2016 on exemptions from the obligation to keep records using cash registers (Journal of Laws of 2016, item 2177) specifies cases in which the sale in the mail order system benefits from the exemption from the obligation to checking in at the cash register. Taxpayers may take advantage of the exemption from recording the delivery of goods in the shipping system (by post or courier services) if they meet the relevant requirements (see item 38 of the annex to the above-mentioned regulation).
In accordance with item 38 to the above-mentioned of the Regulation, the taxpayer does not have to register on the cash register for the delivery of goods in the shipping system (by post or courier services), if he receives full payment for the activity performed by post, bank or credit unions (respectively to the taxpayer's bank account or to the taxpayer's account in cooperative savings and credit union, of which he is a member), and from the records and evidence documenting the payment, it is clear which specific activity was related to and for whom (details of the buyer, including his address).