VAT (part 2) - activities subject to VAT, part II

Service-Tax

Intra-Community supply of goods

For the intra-Community supply of goods, in accordance with art. 13 sec. 1 of the VAT Act, the export of goods from the territory of the country to the territory of a Member State other than the territory of the country with the reservation (exceptions) specified in art. 13 sec. 2-8 of the Act. Intra-Community supply of goods is also considered to be the relocation by or on behalf of a taxpayer of goods belonging to his enterprise from the territory of the country to the territory of a Member State other than the territory of the country, which have been by that taxpayer within the territory of the country within the framework of his enterprise, manufactured, extracted, acquired, in including as part of intra-Community acquisition of goods, or brought into the territory of the country as part of the import of goods, if they are to serve the taxpayer's business activity.

Service import

The content of the provisions shows that the activities subject to VAT may also include the import of services, understood as the provision of services for the performance of which the recipient is the taxpayer.

This fact results from Art. 17 sec. 1 point 4 of the VAT Act, according to which the service recipient is the taxpayer for services provided by taxpayers who do not have a registered office in Poland or a permanent place of business.

The above rule applies when the customer is a taxpayer referred to in art. 15 above of the Act, while in the case of services to which Art. 28b (services provided to the taxpayer, for which the place of performance is in the buyer's country), also a legal person that is not such a taxpayer, registered as an EU VAT taxpayer.

When providing services, particular attention should be paid to the place of their provision. It should be remembered that the place of physical performance of the service is not always the same as the place of performance within the meaning of the VAT Act.

Special types of subject of taxation - liquidation of activities

VAT also applies to goods of own production and goods that, after purchase, were not the subject of the delivery of goods, in the case of:

  • dissolution of a civil or commercial partnership without legal personality;
  • a taxpayer who is a natural person ceases to perform activities subject to taxation, is obliged to report the cessation of activity to the head of the tax office.

In the case of liquidation of business activity for VAT purposes, it is necessary to prepare an additional physical inventory and valuation of this inventory. When carrying out this activity, it is necessary to take into account the goods remaining on the date of cessation of taxable activities.

Information about such a physical inventory, the inventory value determined on its basis and the amount of tax due, should be attached to the tax return for the period including the date of dissolution of the company or cessation of taxable activities.

In such a case, the supply of goods covered by the physical inventory shall be exempt from tax for a period of 12 months from the date of cessation of taxable activities, provided that the tax on goods covered by the physical inventory is settled.

Activities excluded from VAT

The following were excluded from VAT taxation:

  • activities that cannot be the subject of a legally effective contract,
  • transactions of disposal of a company or plant (branch) preparing the balance sheet itself.