Entity exempt from VAT and intra-Community acquisition of goods

Service-Tax

Can goods and services tax-exempt entities buy goods from the territory of the EU? How to properly settle the transaction in such a situation? Should an entity that is exempt from VAT register as an EU VAT taxpayer? We invite you to read.

Obligation to register as an EU VAT taxpayer

An entity exempt from VAT, whose value of the purchased goods in a given year will exceed PLN 50,000, is required to register as an EU VAT taxpayer. If this limit is not exceeded, the entrepreneur does not have to register or tax the purchase.

WNT - definition

The definition of intra-Community acquisition of goods can be found in Art. 9 sec. 1 of the Act on tax on goods and services. WNT (intra-Community acquisition of goods) is the acquisition of the right to dispose of the goods as the owner, which, as a result of the delivery, are sent or transported in the territory of a Member State other than the territory of the Member State of commencement of shipment or transport by the person delivering the goods, the buyer of the goods or on their behalf.

Settlement of WNT transactions

If an entity exempt from VAT makes an Intra-Community Payment and the value of the transaction exceeds PLN 50,000, it must submit a VAT-8 declaration to the tax office. It can also be done by entities that have not exceeded this limit, but have decided to tax the transaction, confirming it with an appropriate notification sent to the Tax Office.

On the VAT-8 declaration - apart from WNT - we can also show:

  • import of services (Article 17 (1) (4)) and
  • purchase of goods in the territory of the country from a foreign entity, when the VAT is settled by the buyer (Article 17 (1) (5)).

It should be noted that an entity that is exempt from VAT and performs intra-Community acquisition of goods, as a rule, is required to show them in the EU VAT summary information.

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Failure to submit the VAT-8 declaration

A taxpayer exempt from VAT must submit a VAT-8 declaration for monthly periods - by the 25th day of the month, for the previous month. It should be added that he is obliged to do so even in a situation where in a specific month there was no tax obligation related to the events covered by the declaration.

Failure to submit the declaration may inform the tax authorities that the entrepreneur no longer performs taxable activities. In this situation - based on Art. 97 of the VAT Act - the head of the Tax Office may remove the entrepreneur from the register of VAT taxpayers.

Importantly, Art. 97 sec. 15 of the VAT Act states that failure to submit a declaration for the next 6 months or 2 consecutive quarters is tantamount to removing the taxpayer from the EU VAT register.