Moving goods abroad for repair

Service-Tax

When buying goods abroad, entrepreneurs are often forced to use the guarantee covering these goods. Therefore, they send the defective product abroad, and the foreign contractor sends the repaired product back after repair. More than one entrepreneur begins to wonder how to tax such a return. The topic of the article is the movement of goods abroad in order to repair them. Get the details.

Shipment of purchased goods to a contractor from the European Union for repair

The entrepreneur, purchasing the goods from a contractor from the European Union and then sending it for repair, does not perform an intra-Community delivery of the goods.

Pursuant to Art. 13 sec. 1 of the VAT Act, the intra-Community supply of goods is understood as the export of goods from the territory of the country in the performance of the act of transferring the right to dispose of the goods as the owner in the territory of a Member State other than the territory of the country from which the delivery of goods began.

In accordance with Art. 13 sec. 4 of the VAT Act, the movement of goods by or on behalf of a taxpayer is not considered an intra-Community supply of goods in a situation where:

  • the goods are to be the subject of services performed in the territory of a Member State other than the territory of the country for the benefit of that taxpayer of services consisting in their valuation or performance of works on them, provided that the goods will be moved back to the territory of the country after the provision of these services.

Moving goods abroad for repair

It is clear from the provisions of the VAT Act that an intra-Community supply of goods is not considered to be their transfer to a contractor from the European Union, if work is carried out on them, and then they will be returned to the Polish recipient. The above clearly shows that the shipment of defective goods for repair to a contractor from the European Union will not constitute an intra-Community supply of goods. The above is reflected in the individual interpretation of December 13, 2013. Director of the Tax Chamber in Katowice, ref. No. IPPP3 / 443-856 / 13-2 / JK.

Return of the repaired goods from the contractor from the European Union

Pursuant to Art. 9 sec.1 of the VAT Act, the intra-Community acquisition of goods is understood as the acquisition of the right to dispose of, as the owner of the goods, which, as a result of the delivery, are sent or transported to the territory of a Member State other than the territory of a their thing.

On the other hand, the intra-Community acquisition of goods for consideration is understood as the transfer of goods by or on behalf of the taxpayer of value added tax, belonging to that taxpayer, from the territory of a Member State other than the territory of the country within the territory of the country,

if the goods were made by the taxable person in the territory of another Member State within the framework of his establishment:

  1. manufactured,

  2. extracted,

  3. acquired, including as part of intra-Community acquisition of goods,

  4. imported

- and are intended to serve the taxpayer's economic activity.

In view of the above-mentioned regulations, the return of the repaired goods from a contractor from the European Union will not constitute an intra-Community acquisition of goods.

Purchase of a repair service for goods purchased from a contractor from the European Union

In view of the above-mentioned provisions and all arguments, it should be stated that the shipment of defective goods for repair to a contractor from the European Union and then the return of the already repaired goods by him will not constitute an intra-Community supply of goods, or an intra-Community acquisition of goods.

It will, however, constitute the import of repair services for this product in accordance with Art. 28b of the VAT Act, which is also confirmed by the individual interpretation of April 16, 2013. Director of the Tax Chamber in Poznań, ref. No. ILPP4 / 443-13 / 13-4 / EWW.