Who issues the invoice in the lump sum transaction with the farmer?
The regulations regulate the issuing of invoices completely differently when purchasing products from a flat-rate farmer than in the case of traditional sale and purchase transactions. In such a situation, the buyer is obliged to issue an invoice confirming the purchase. You should remember about additional information that must be included in such a document.
Who is a flat-rate farmer?
The concept of a flat-rate farmer is understood as a farmer supplying agricultural products from his own agricultural activity or providing agricultural services, benefiting from tax exemption pursuant to art. 43 sec. 1 point 3 of the VAT Act. The only exception are farmers obliged to keep accounting books under separate regulations.
Agricultural products are goods listed in Annex 2 to the VAT Act and goods produced from them by a flat-rate farmer from products derived from his own agricultural activity with the use of means normally used on an agricultural, forestry and fishing farm. The abovementioned annex also contains a list of agricultural services provided, including, inter alia, rental and lease of agricultural machinery and equipment, without operator.
The discussed group of farmers supplying agricultural products is entitled to a flat-rate VAT reimbursement for the purchase of certain means of production for agriculture subject to the value added tax. Pursuant to Art. 146a, point 3, the flat-rate reimbursement is - from 1 January 2011 to 31 December 2016 - 7%, subject to Art. 146f.
However, the most important issue in the presented situation is that the obligation to issue an invoice which is the basis for the tax refund rests not with the farmer but with the entrepreneur purchasing agricultural products or services from him.
An entrepreneur registered as an active VAT payer who purchases agricultural products from a flat-rate farmer shall issue an invoice documenting the transaction in duplicate, keeping a copy for himself and the original handing over to the supplier.
Importantly, the buyer is obliged to settle and pay a flat-rate tax refund. This should not be equated with the financing of the farmer by the entrepreneur, as the amount to be reimbursed is the buyer's input tax, which is deductible.
The invoice documenting the purchase of agricultural products should be marked as "VAT invoice RR". Due to the fact that it is issued on different terms, it should contain more information than a traditional invoice:
- name and surname or name or short name of the supplier and buyer and their addresses;
- tax identification number or PESEL number of the supplier and buyer;
- the number of the supplier's identity card or other document confirming his identity, the date of issue of this document and the name of the authority that issued the document, if the flat-rate farmer delivering agricultural products is a natural person;
- the date of purchase as well as the date of issue and the sequence number of the invoice;
- the names of the agricultural products purchased;
- unit of measure and quantity of agricultural products purchased and indication (description) of the class or quality of these products;
- unit price of the purchased agricultural product without the amount of the flat-rate tax refund;
- value of purchased agricultural products without the amount of the flat-rate tax refund;
- flat rate tax refund;
- the amount of the flat-rate tax reimbursement on the value of purchased agricultural products;
- value of purchased agricultural products with the amount of the flat-rate tax refund;
- the total amount due together with the flat-rate tax refund, expressed digitally and in words;
- legible signatures of persons authorized to issue and receive invoices or signatures as well as the names and surnames of these persons.
The elements that distinguish RR invoices from those issued normally are the signatures of the issuer and the recipient of the document, because in a traditional invoice there is no obligation to conclude both at the same time. In addition, it should also have a declaration of the supplier of agricultural products confirming its status: "I declare that I am a flat-rate farmer exempt from tax on goods and services pursuant to Article 43 (1) (3) of the Value Added Tax Act."