When does the moment of recognizing the import of goods in KPiR and VAT arise?
Taxpayers more and more often decide to import goods from abroad. Therefore, they are delivered to the recipient along with the documentation much later than they were actually purchased. What if the entrepreneur receives the invoice faster than the goods? How to account for VAT when customs clearance took place in a Member State? Read the article and learn about the moment of recognizing the import of goods in KPiR and VAT.
The moment of recognizing the import of goods in the KPiR - when can we talk about it?
As a rule, the purchase of basic materials and commercial goods should be included in the KPiR immediately after their receipt, at the latest before they are transferred to the warehouse, processed or sold (§ 17 (1) of the Regulation of the Minister of Finance on keeping a tax book of revenues and expenses).
If commercial goods, the purchase of which is documented with suppliers' invoices, were delivered to the plant or were traded before receiving the invoice, then pursuant to § 16 para. 2 above a regulation should be described in detail, stating:
name, surname (company) and address of the supplier,
quantity and type as well as unit price and value of commercial goods.
Then the entry in the KPiR should be included on the basis of the description confirmed by the date and signature of the person who accepted the purchased goods and connected with the invoice sent later. Any difference in relation to the value specified in the invoice must be entered in the book (record) on the day of receipt of the invoice.
However, if the delivery of the goods takes place with the delivery of the purchase invoice or the purchase invoice has been delivered before the delivery of commercial goods or materials, the moment of their recognition arises in accordance with the general rule set out in Art. 22 sec. 6b of the PIT Act, according to which the date of incurring the tax deductible cost is the date of issuing the invoice (bill) or other evidence constituting the basis for posting (recognizing) the cost after conversion into PLN at the average exchange rate of the National Bank of Poland on the last business day preceding the date of issuing the invoice.
This position was also adopted by the Director of the Tax Chamber in Katowice in the individual interpretation of May 15, 2015, ref. No. IBPBI / 1 / 415-190 / 12 / BK:
[...] expenses incurred for the purchase of goods will constitute tax deductible costs in the month in which the invoice was issued ([...] - receipt of the goods along with the invoice issued) or in which the description of the received commercial goods was drawn up (or the specification was received suppliers [...].
In summary, if the entrepreneur receives the purchase invoice before the delivery of the goods, the moment of recognizing the import of goods in the KPiR will be according to the invoice issue date.
XYZ purchased trading goods in China in March. She received the invoice documenting the purchase at the beginning of April, while the purchased goods were to be delivered at the end of May. When will there be an obligation to include imports of goods from China in the KPiR?
XYZ should record the purchase in the KPiR according to the purchase invoice date, which is April.
A special moment of recognizing the import of goods in the KPiR
If the taxpayer records the import of goods on the basis of the invoice on the date of its issue, remember to properly include these goods in the final inventory. The physical inventory at the end of the tax year should also include goods that are the property of the taxpayer but have not yet been physically delivered, the so-called goods in transit. Such action allows the value of purchased goods to be 'thrown out' from the company's tax deductible costs.
ABC purchased commercial goods on December 10, 2018 and a day later, i.e. December 11, received an invoice documenting this purchase. The purchased goods were delivered on January 9, 2019. So how to include such a purchase in the KPiR and in the final inventory?
Such an event in terms of income tax will have the following effect:
- the invoice for the purchase of goods should be entered in the KPiR in accordance with the invoice issue date, i.e. on December 11, 2018;
- Purchased goods that are on the way and are the property of the buyer should be included in the final inventory as of December 31, 2018.
The moment of including the import of goods in VAT
The method and moment of recognizing the import of goods in VAT depends on where the customs clearance took place, whether in the country (in Poland) or in another Member State, e.g. the Netherlands or Germany.
The moment of recognizing the import of goods with clearance in Poland
In the event that the customs clearance of the purchased goods takes place in Poland, the taxpayer pays VAT immediately upon check-in, if the goods are delivered via, for example, a courier, then the VAT is paid on delivery to the broker. This tax is shown on the SAD or PZC document (electronic version), which also shows the duty.
The moment of including the import of goods in VAT (with active VAT payers) takes place on general terms (if the purchase is related to a taxable activity), i.e. upon receipt of the SAD or PZC document.
As for the duty indicated on the SAD or PZC document, the entrepreneur has the right to include it in company costs on the date of its payment.
Moment of recognition of the import of goods cleared in a Member State
If the customs clearance took place in a Member State, then such a transaction should be treated as an intra-Community acquisition of goods (intra-Community acquisition of goods). Such a settlement is due to the fact that the goods originally cross the border in another EU country and thus VAT is settled by a foreign fiscal representative.
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In such a situation, Art. 20 paragraph 5 of the VAT Act, in which we read this: in intra-Community acquisition of goods, the tax obligation arises on the 15th day of the month following the month in which the delivery of the goods being the subject of the intra-Community acquisition was made, subject to paragraph 6-9.
Due to the above, VAT in the case of intra-Community acquisition of goods should be shown by the 15th day of the month following the month in which the goods were delivered. Then, the VAT must be shown both on the sales and purchase side in the VAT-7 / VAT-7K declaration and in the EU VAT summary information. When settling intra-Community acquisition of goods transactions, indicate the EU VAT of the fiscal representative, i.e. NIP with the prefix of the country where the customs procedure took place and the customs representative is registered as an EU taxpayer). To sum up, the moment of recognizing the import of goods in the KPiR and VAT depends on the date on which the goods are delivered, the purchase invoice is issued or the customs clearance took place. Entrepreneurs purchasing with counterparties outside the EU should consider all these factors.