Overview of the type of TT_D sales procedure with examples

Service-Tax

The new JPK_V7 file provided taxpayers from the settlement for October with many additional obligations related to keeping the company's VAT records. Combining the declaration and VAT records into one file made keeping the VAT records very complicated. The novelty consists in introducing dozens of different symbols regarding the types of goods and services sold, sales procedures, purchase procedures and types of sales and purchase documents. One of these symbols is TT_D, i.e. the delivery of goods as part of an intra-community triangular transaction.

Additional registration obligations in the new JPK_V7

Finding the new JPK_V7 file in the symbols is not easy. One of the new (mandatory) markings in the JPK_V7 file is the TT_D sales procedure. This code denotes a delivery of goods outside the territory of the country (RP) made by the second-highest VAT payer as part of a tripartite transaction in the simplified procedure referred to in section XII, chapter 8 of the Act.

There are two basic aspects to be noted when it comes to deliveries marked with TT_D:

  1. intra-community tripartite transaction
  2. and the second-largest taxpayer,
  3. and a simplified procedure.

Polish taxpayers will not be obliged to use the TT_D code in every case

At first glance, it can be seen that not always in the event of an intra-Community triangular transaction, it will not be obligatory to mark the transaction with the above symbol. It all depends on where the Polish entity participating in the tripartite transaction will be located in the hierarchy of the trilateral transaction. In order to make a proper identification, some very important terms would need to be clarified.

What is an intra-Community acquisition of goods?

To understand an intra-community triangular transaction, it is first necessary to define what an intra-community acquisition of goods (intra-community acquisition) is. Pursuant to Art. 135 sec. 1 point 3 of the Act of March 11, 2004 on tax on goods and services, hereinafter referred to as the VAT Act, by the Intra-Community Act, the taxpayer should understand the acquisition of the right to dispose of goods which, as a result of the delivery, are shipped or transported to the territory of a Member State other than the territory of the Member State of commencement of dispatch or transport by or on behalf of the person making the delivery, the buyer of the goods.

Thus, intra-Community acquisition of goods means the transfer of the right to dispose of goods (as a result of their sale) and the movement of goods from the territory of one member state to the territory of another member state.

Intra-Community tripartite transaction

In art. 135 sec. 1 point 2 of the VAT Act, the legislator defined the definition of an intra-Community triangular transaction (WTT). He stated that this is a transaction that meets all of the following conditions jointly:

  1. three VAT payers identified for intra-Community transactions in three different Member States participate in the delivery of the goods by the first of them handing over the goods directly to the last in line, the goods being delivered between the first and second and the second and last in order

  2. and the subject of supply is dispatched or transported by the first, or transported by or on behalf of the second VAT payer, from the territory of one Member State to the territory of another Member State.

The specifics of WTT are not the easiest ones. However, the taxpayer should pay attention to a few basic elements:

  1. there are three active VAT and VAT-EU taxpayers in the transaction;
  2. all three taxpayers are established in three different (their) EU countries;
  3. the first of them gives the goods directly to the last taxpayer (despite this, the transaction is considered in terms of taxation in such a way that the supply of goods takes place between the first and second taxpayer, and then between the second and third - last taxpayer).

The essence of the functioning of the WTT has been explained, but that is not all. The final link to understanding the delivery for TT_D is explaining what the simplified procedure is under the WTT transaction.

Simplified procedure for the WTT transaction

The legislator in Art. 135 sec. 1 point 4 of the VAT Act, defined the simplified procedure (under the WTT) as the VAT settlement procedure precisely in the WTT, consisting in the fact that the last VAT payer settles VAT on account of the delivery of goods to him by the second VAT payer, if the following conditions are jointly met:

  1. the delivery to the last VAT payer was immediately preceded by the intra-Community acquisition of goods from the second VAT payer;

  2. the second-highest VAT payer supplying the last VAT payer is not established in the territory of the Member State where transport or shipment ends;

  3. the second highest VAT payer shall use the same VAT identification number for the first and last VAT payer that has been issued to him by a Member State other than that where transport or shipment begins or ends;

  4. the last VAT payer uses the VAT identification number of the Member State where transport or shipment ends;

  5. the last VAT payer was indicated by the second VAT payer as obliged to settle VAT on the delivery of goods carried out under the simplified procedure.

The simplified procedure makes it easier to settle VAT in such a way that the settlement is made by the last (third) taxpayer - the buyer participating in the WTT transaction. However, in order for taxpayers to be able to use the simplified VAT settlement, the above conditions must be met, in simplified terms:

  1. the supply of goods by the first taxpayer to the last taxpayer means that the second taxpayer first recognized the WNT (in the WTT transaction);
  2. the other taxpayer (recognizing intra-Community acquisition of goods and carrying out further intra-Community supply of goods) is not established in the recipient's EU country (where the transport ends);
  3. the second taxpayer provides the same VAT-EU number for the two other taxpayers participating in the WTT in their EU country (it cannot be the country where the transport of goods begins and ends);
  4. the recipient of the goods (third taxpayer) uses his EU VAT number assigned to him in his EU country (EU country of destination of the goods);
  5. the second taxpayer indicated the third as obliged to settle VAT on a given WTT transaction according to the simplified procedure.

It is worth mentioning a certain exception here, namely - the simplified procedure can also be used if the last taxpayer (recipient of the goods) is a legal person who is not an active VAT payer, but registered for the possibility of performing EU transactions (VAT-EU) in an EU country, in which the goods will be located at the time of completion of transport or shipment.

The second taxpayer in the simplified procedure at WTT issues an invoice with additional data

If the taxpayer is second in the order in the WTT, then in order to carry out the simplified VAT settlement procedure, he is obliged to issue an invoice to the last (third taxpayer) with the following additional data:

  1. the annotation "VAT: EC invoice simplified pursuant to Art. 135-138 of the PPA Act "or" VAT: EC invoice simplified under article 141 of Directive 2006/112 / EC ";
  2. a statement that the tax for the delivery will be settled by the last VAT payer;
  3. the number referred to in art. 97 sec. 10, which is applied by him to the first and last taxpayer of value added tax;
  4. identification number used for the value added tax of the last taxpayer in the order.

Issuing an invoice by the second taxpayer for the third taxpayer with the above elements causes the latter to settle VAT on intra-group VAT in a triangular transaction, and additionally, it is assumed that VAT has been taxed with the second taxpayer (even though the second taxpayer does not show VAT from the settled intra-taxpayer VAT). as part of a tripartite transaction).

It is worth emphasizing that the above solution is also applicable when:

  1. the last entity is a legal person that is not an active VAT payer but is registered as a VAT-EU taxpayer in the EU country where the goods are located at the time of completion of the shipment or transport;
  2. the last entity is the taxpayer mentioned in art. 15 or a legal person that is not a taxable person within the meaning of art. 15, which is identified for the purposes of intra-Community transactions in accordance with Art. 97, and the second taxpayer is the value added tax taxpayer specified in art. 135 sec. 1 point 4 lit. b and c, which uses in the simplified procedure the identification number issued to him for the purposes of this tax by a Member State other than the Republic of Poland, taking into account the provisions in force in that other Member State in the field of documenting this procedure.

Start a free 30-day trial period with no strings attached!

TT_D follows TT_WNT

The Polish taxpayer, only if he is the second taxpayer participating in the WTT transaction with the simplified procedure, will be obliged to use the designation TT_D. It should be emphasized, however, that the designation TT_D follows the designation TT_WNT.

This means that if the Polish (second in order) taxpayer purchases the goods in a triangular transaction, and the goods are transported from the first to the last VAT-EU taxpayer, the goods actually do not go to the second (Polish) taxpayer.

Nevertheless, the so-called legal fiction that the other taxpayer recognizes WNT as part of a triangular transaction. And in this very situation, such an acquisition is marked with the code TT_WNT. However, the TT_WNT code will always be followed by a transaction requiring the use of the TT_D marking due to the fact that the goods will always be transported from the first to the last taxpayer.

On the other hand, an exemplary tax diagnosis in the event that the Polish taxpayer would be the second in the order will look like this:

  1. the first - an active VAT payer registered for EU transactions in the EU country of the company's registered office (other than Poland) sells goods for the Polish taxpayer;
  2. the second - a Polish active VAT taxpayer registered in Poland as a VAT-EU taxpayer recognizes a given purchase as intra-Community acquisition (as part of a triangular transaction);
  3. the second - a Polish active VAT taxpayer registered in Poland as a VAT-EU taxpayer performs WDT for the last taxpayer (as part of a triangular transaction);
  4. the last - active VAT taxpayer registered for EU transactions in the EU in the EU country of destination of the goods (other than Poland and other than the first taxpayer) purchases the goods and settles VAT on a given triangular transaction.

It should be recalled that the legislator allows an exception so that the last taxpayer does not have to be an active VAT taxpayer, but it is enough for him to be a VAT-EU registered taxpayer in the EU country of destination of the goods (other than the EU countries of the first and second taxpayers participating in the WTT transaction).

Example 1.

The Polish active VAT and EU taxpayer trades in funeral accessories. For years, he has been cooperating with a Czech supplier (active VAT and VAT-EU taxpayer) who supplies him with a set of candles.

The Polish taxpayer receives an order from a contractor from the Netherlands who is a VAT-EU taxpayer. The delivery takes place immediately from the Czech supplier to the recipient in the Netherlands.

As part of the trilateral transaction, taxpayers meet the conditions for applying the simplified method.

In these circumstances, the Polish taxpayer, when fulfilling the order of the Dutch contractor, will be required to mark:

  1. the purchase of a set of candles from the Czech counterparty will be recognized as WNT as part of a trilateral transaction and marked in JPK_V7 with the code TT_WNT;
  2. delivery of a set of candles, which follows WNT as part of a trilateral transaction, to a Dutch counterparty should be marked in JPK_V7 with the code TT_D.

Example 2.

The Polish active VAT and VAT payer of the EU sells rubber products. For years, he has been cooperating with a Czech recipient (active VAT and VAT-EU taxpayer), who in turn sells the products to a contractor from Germany, who is a VAT and VAT-EU taxpayer.

The Polish taxpayer received an order from a contractor from the Czech Republic to deliver 500 rubber products (for use in the automotive industry). The Polish taxpayer delivered the goods immediately to the final recipient in Germany.

As part of the trilateral transaction, taxpayers meet the conditions for applying the simplified method.

In these circumstances, the Polish taxpayer, when carrying out the order of the contractor from the Czech Republic, will only settle the intra-Community supply of goods and will not be obliged to mark this sale neither TT_WNT nor TT_D.

Example 3.

A Polish active VAT and VAT payer of the EU buys bikes from an Austrian supplier. The supplier from Austria is an active VAT and EU-VAT taxpayer and imports the bikes from the manufacturer in Italy. A batch of bicycles from Italy is immediately transported to the Polish taxpayer.

Taxpayers want to apply a simplified procedure.

In these circumstances, the Polish taxpayer, when buying bikes from a contractor in Austria, will settle the purchase in question as an intra-group transaction as part of a triangular transaction and will settle VAT on this transaction as the last taxpayer operating in the trilateral transaction settled using the simplified method.

However, in the JPK_V7 file it will not use the symbol TT_WNT or TT_D in this case.

Trilateral transaction in VAT records

The taxpayer who is the second in the intra-Community tripartite transaction is obliged to properly demonstrate the supply of goods to the last taxpayer, even though the actual route of the goods is such that they are transported from the first to the last taxpayer.

The second taxpayer participating in the intra-Community tripartite transaction (simplified procedure) shows a given sale in the month of TT_WNT. This means that in the month when the tax obligation arises for the intra-Community acquisition of goods, the Polish taxpayer simultaneously shows the TT_WNT and TT_D transactions.

The tax obligation in the intra-Community acquisition of goods arises upon the issuance of the invoice by the taxpayer of value added tax, but not later than on the 15th day of the month following the month in which the goods being the subject of the intra-Community acquisition were delivered.

The first activity that the taxpayer should mark in the new JPK_V7, due to the fact that the Polish taxpayer appears second in the trilateral transaction (settled according to the simplified method), is marking the number 1 in the declaration part in field P_66, which means that the taxpayer in the period for which submits the JPK_V7 file, made a three-party transaction (as the second one, settled according to the simplified procedure).

The second issue to be included in the registration part of the new JPK_V7 is the TT_WNT transaction, which always precedes TT_D and occurs simultaneously with this transaction in the VAT register - the so-called legal fiction. The taxpayer shows TT_WNT in the field K_23 and the value of the purchase price of goods from the first taxpayer participating in the WTT (simplified procedure) is the taxable base for a given transaction.

However, in the same month, in the registration part of the new JPK_V7, the taxpayer shows the TT_D transaction in field K_11, where the tax base of a given intra-Community supply transaction includes the net value of the supply of goods made outside the territory of the country, and therefore the supply made to the last taxpayer participating in the WTT (simplified procedure) .

On the other hand, in the declaration part, the second in order (Polish taxpayer) shows both TT_WNT and TT_D transactions according to the value from the registration part. It shows the TT_WNT transaction in the P_11 position, and the TT_D transaction in the P_23 field.

The simplified procedure in a triangular transaction is characterized by the fact that in the TT_WNT transaction, the second taxpayer does not show any VAT at all due to the fact that VAT is settled by the last (third) taxpayer - the final buyer of the goods.

In addition to the above, the taxpayer should remember that despite the introduction of the new JPK_V7 file, VAT-EU summary information should still be submitted. In this situation, in part C of this information, the taxpayer shows the value from TT_WNT (value per one contractor) shown in the new JPK_V7 and marks the square "trilateral transactions".

In turn, in part D of this information, the taxpayer shows the value from TT_D (value per one contractor) shown in the new JPK_V7 and marks the square "three-way transactions". Both operations in the same month in which the taxpayer showed TT_WNT and TT_D in the JPK_V7 file.