Name of the re-invoiced good or service
It often happens that in order to make a sale, an entrepreneur uses the services of other companies or buys goods, the costs of which are consequently charged to a third party, i.e. the final buyer. In this situation, we are dealing with the so-called re-invoicing, which is just "shifting" the expenditure to the entity that actually uses the service or good. Such action is in line with the regulations, but still raises many doubts among entrepreneurs. One of them concerns the question of the name of the re-invoiced goods or the re-invoiced service, namely - should it be the same as the name resulting from the invoice issued by the original seller? Let's check.
General rules for re-invoicing
Already at the beginning of deliberations on this subject, it is worth mentioning that the provisions of any legal act do not include the concepts of re-invoicing and re-invoicing. This term was created in business practice and entered the language of entrepreneurs for good. However, the activity itself under this concept became the subject of interest of the legislator in the Act on tax on goods and services. As indicated in art. 8 sec. 2a of the aforementioned legal act, in a situation where the entrepreneur "shifts" the cost of a given service onto the final buyer, he (the entrepreneur) is treated as if he had performed it himself.
Art. 8 sec. 2a of the VAT Act
Where a taxpayer, acting in his own name but for the benefit of a third party, participates in the provision of services, it is assumed that that taxpayer has received and provided the services himself.
The aforementioned provision applies only to re-invoicing services, but it often happens that the costs of the goods purchased for them are also transferred to the final buyer. In the event of such a sale, can the entrepreneur also "pass on" certain expenses to his client? The answer is in the affirmative as there are no laws that prohibit this. Hence, it is assumed that such sales can be treated analogously to re-invoicing services.
Moreover, when re-invoicing goods, you can rely on Art. 7 sec. 8 of the VAT Act, according to which in a situation where several entities deliver the same goods in such a way that the first of them issues the goods directly to the last buyer, it is considered that the goods were delivered by each of the entities participating in these activities.
Art. 7 sec. 8 of the VAT Act
In the event that several entities deliver the same goods in such a way that the first of them releases the goods directly to the last buyer in the order, it is considered that the goods were delivered by each of the entities participating in these activities.
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Online advice for businessesIt can therefore be concluded that the situation when the trader buys the goods or services on behalf of the buyer and sells them to the customer with his own good or service does not differ from a "traditional" transaction. In this case, the seller is the company that purchased the goods or service, and the final recipient remains the buyer. The entrepreneur is also not required to include any information about re-invoicing on such a sales document.
Name of the good or service on the invoice
Due to the fact that the situation of re-invoicing in practice does not differ from traditional sales, also re-invoicing is in fact an “ordinary” invoice. Therefore, it should contain all the data specified in the VAT Act, including the name (type) of goods or services (Article 106e (1) (7) of the VAT Act).
The regulations do not specify how to specify the name of the service or goods on the invoice. However, it is important that the description used clearly shows what was the subject of the sale. This means that the taxpayer may include any name of the re-invoiced goods and services - it does not have to be the same as the name on the original invoice, it may or may not contain the word re-invoicing or re-invoicing.
For example, if the entrepreneur provides (rents) premises, he may re-invoice the costs of utilities to the tenant. In this case, it issues an invoice that includes both the cost of the lease itself, as well as the re-invoiced utilities. Two items may then appear on the sales document:
rental of premises at ul. Kasztanowa 12 for the month of 03/2014,
- re-invoicing of utility costs for the month 03/2014 (or simply - utility costs 03/2014, or any other description that allows the identification of the service).