VAT (part 7) - foreign transactions in VAT part AND
From May 1, 2004, i.e. from the date of Poland's accession to the European Union, the settlements related to the purchase and sale of goods and services between Poland and other EU countries have changed. Accounting for individual types of transactions in terms of VAT is therefore different in the case of intra-Community supplies and purchases from countries outside the EU.
Delivery of goods abroad
The key to determining the rules for settling VAT is to determine the country to which the goods sold are to be delivered. We can therefore deal with an intra-Community supply of goods (WDT) or with export in the case of cooperation with third countries.
Intra-Community supply of goods
The intra-Community supply of goods for remuneration is understood as the movement of goods from the territory of the country to the territory of a Member State other than the territory of the country, provided that the conditions specified in the act are met. There must therefore be:
- delivery of goods, i.e. the transfer of the right to dispose of goods as owner,
- movement of goods from Poland to another Member State, which will be properly documented,
- transaction between relevant entities, which are taxpayers reported to VAT-EU in various European Union countries. The fact of the declaration can be verified on the website www.vies.pl. The Polish entity registering for VAT-EU makes the VAT-R forms, in part C.3.
In the event of the above-mentioned conditions, the supplying entity has the right to apply the 0% VAT preferential rate. In such a situation, the buyer is an entity obliged to calculate and pay VAT at the rate applicable in his country for a given type of goods.
To apply the 0% rate, it is also necessary to complete documentation proving that the goods are exported outside the country. This is stated in Art. 42 sec. 3-4 of the VAT Act, according to which these documents are:
- if the transport of goods is commissioned to the carrier (forwarder) - shipping documents received from the carrier responsible for the export of goods from the territory of the country, which clearly show that the goods have been delivered to their destination in the territory of a Member State other than Poland, or
- in the case of the export of goods being the subject of intra-Community supply of goods directly by the taxpayer making such a delivery or by their buyer, using the taxpayer's or the acquirer's own means of transport, the taxpayer should have a document containing at least: names and surnames or names and addresses of the business of the seller and the buyer, address to which the goods are transported, identification of the goods and their quantity, confirmation of receipt of the goods by the buyer, type and registration number of the means of transport used to export the goods
and specification of individual items of cargo.
If the above documents do not clearly confirm that the goods were delivered to the buyer, the evidence may also include:
- business correspondence with the buyer, including his order,
- insurance documents,
- a document confirming payment for the goods,
- proof of acceptance by the buyer of the goods in the territory of a Member State other than Poland.
The taxpayer has time to complete the above documentation until the deadline for submitting a tax declaration for a given tax period. In the absence of appropriate documentation, the seller will be obliged to tax the transaction at the Polish VAT rate.
As a rule, the tax obligation for intra-Community supplies arises on the 15th day of the month following the month in which the goods were delivered. However, if the transaction is confirmed with a VAT invoice before the expiry of the above deadline, the tax obligation will arise upon its issuance.
Export of goods
Pursuant to Art. 2 clause 8 of the VAT Act, the export of goods is understood as the delivery of goods dispatched or transported from the territory of the country outside the territory of the European Union by:
- a supplier or on his behalf (direct export), or
- a buyer established outside the territory of the country or on its behalf, with the exception of goods exported by the buyer himself for the purpose of equipping or supplying recreational craft and tourist aircraft or other means of transport for private purposes (indirect export)
- if the export of goods outside the territory of the European Union is certified by the customs office specified in the customs regulations.
In order to be able to apply the 0% VAT rate when exporting goods, it is necessary to properly document the exportation. Customs documents are used for this in the case of:
- direct export - IE-599, i.e. an electronic document received from the ICT system used to handle export declarations or the original of card 3 of the SAD document - paper-based export declaration,
- indirect export - a copy of IE-599, i.e. a printout of a document from the ICT system used for handling export declarations confirmed by the customs office or a copy of card 3 of the SAD document - paper-based export declaration, confirmed by the customs office.
The 0% VAT rate can be applied if the above documentation is completed before the deadline for submitting a tax declaration for a given settlement period. If this condition is not met, the delivery is not shown in the records of a given settlement period at all, but in the next one, using the 0% tax rate. However, if the taxpayer fails to complete the relevant documentation before the deadline for submitting the next tax declaration, he will be obliged to tax the sale at the national VAT rate applicable to this type of goods.
Legislators for export transactions have not provided for separate regulations with regard to the moment of the tax obligation. Consequently, Art. 19 paragraph 1 and 4 of the VAT Act. The tax obligation arises upon the release of the goods or the performance of the service, and if they were preceded by the issuance of the invoice, the tax obligation arises upon its issue, but not later than on the 7th day from the date of delivery of the goods or performance of the service.
Acquisition of goods
The purchase of goods mirrors the delivery transaction. It is also related to separate rules of VAT settlement in the case of intra-Community acquisition and import of goods.
Intra-Community acquisition of goods
Intra-Community acquisition of goods is understood as the acquisition of the right to dispose of the goods as the owner, which, as a result of the delivery, are dispatched or transported to the territory of a Member State other than Poland. In order to treat a given transaction as intra-Community acquisition of goods, the following conditions must be met:
- there must be a delivery of the goods and their actual movement,
- the transaction must take place between the Polish VAT payer who is the buyer and the taxpayer, value added taxpayer or a non-taxable legal person - from another EU Member State.
In WNT transactions, VAT is settled by the buyer of the goods - in the country to which the delivery takes place. The Polish taxpayer will therefore be required to calculate and report VAT according to the national rate.
As a rule, the tax obligation in WNT arises on the 15th day of the month following the period in which the goods that are the subject of WNT were delivered. However, if the supplier issues an invoice before that date, then the tax obligation will arise upon its issuance.
The taxable amount in the case of intra-Community acquisition of goods is the amount that the buyer is obliged to pay. In addition to goods, the tax base includes:
- taxes, duties, fees and other charges payable in connection with the acquisition of goods
- of a similar nature, except for tax,
- additional expenses, such as commission costs, packaging, transport and the amount of insurance charged by the supplier to the entity making the intra-Community acquisition.
The tax base is reduced by the amount of rebates granted, goods returns and subsidy amounts returned.
In the case of intra-Community acquisition of goods, taxpayers show the tax settlement on the internal invoice. Since January 1, 2013, it is not obligatory to use an internal invoice, but the legislators did not indicate another, substitute document. If the received invoice of purchase is issued in a foreign currency, its value should be converted into PLN according to the average exchange rate of the given foreign currency announced by the National Bank of Poland on the last business day preceding the date of issuing the invoice. However, please note that these types of documents will be withdrawn from January 1, 2014.
The calculated tax must be entered in the VAT register of sales, and if the taxpayer has the right to do so, it can be entered in the VAT register of purchases. Then the transaction will become tax neutral, which is the main principle of VAT functioning in intra-Community transactions. Only the final consumer is to be charged with this tax.
Import of goods
The import of goods is understood as the import of goods from the territory of a third country to the territory of the European Union.
The taxable amount in the import of goods, in accordance with the provisions of the VAT Act, is:
- customs value plus the duty payable,
- if the subject of import are goods subject to excise duty, the taxable amount is the customs value plus the duty and excise duty due.
In the case of goods placed under the outward processing procedure, the taxable amount is the difference between the customs value of the compensating or replacement products released for free circulation and the value of the temporarily exported goods, plus the duty due. If the subject of import under outward processing are goods subject to excise duty, the taxable amount is the difference between the customs value of the compensating or replacement products released for free circulation and the value of the goods temporarily exported, plus the duty and excise duty due.
The tax obligation on the import of goods arises when the customs debt is incurred. Where goods are placed under a customs procedure:
- inward processing under the drawback system, temporary clearance with partial exemption from import duties, processing under customs control - the tax obligation for the import of goods arises when the goods are placed under this procedure,
- customs warehouse, temporary clearance with full exemption from import duties, inward processing in the suspension system, transit, and these goods are subject to levy or similar charges and no customs debt arises at the same time - the tax obligation arises at the moment when these fees become payable.
The VAT settlement is based on the customs documentation: SAD or the PZC electronic document. If the purchase was in a foreign currency, the rate used in the SAD (or PZC) document is used for conversion into PLN. It is the exchange rate announced by the National Bank of Poland on the penultimate Wednesday of each month and is valid for the entire month following the month in which it was announced.
As a general rule of VAT settlement, the tax is paid directly to the customs office. This rule allows the taxpayer to exercise the right to deduct input tax on the import of goods in the month of the import transaction or in the settlement for one of the next two accounting periods.
In the event that the goods are subject to the simplified procedure, in which the tax period is a calendar month, the taxpayer is obliged to account for the amount of tax due on the import of goods in the tax declaration submitted for the period in which the tax obligation arose. However, in order to be able to take advantage of the simplifications, taxpayers must meet the conditions set out in Art. 33a of the VAT Act, i.e. present to the head of the customs office, among others:
- certificate of no arrears in payments of due social security contributions and in payments of individual taxes constituting the income of the state budget,
- confirmation of registration of the taxpayer as an active VAT payer.
However, the entrepreneur should remember to present to the customs authority the documents confirming the settlement of the amount of tax due for the import of goods in the tax declaration within 4 months after the month in which the tax obligation for the import of goods arose.