Internet sales and VAT
The purchase of goods and services via the Internet is currently an extremely popular form of transactions between contractors. Due to its simplicity, it is extremely convenient for the buyer, as it does not come with any reservations. The situation is different for the seller, who is obliged to prove the amount of VAT resulting from the sale. Due to the specific nature of activities conducted via the Internet, it is difficult to clearly define the moment when this obligation arises. Therefore, it has been assumed that it will depend on the method of shipping the goods purchased by the customer and settling the payment.
Tax obligation for online sales
According to the general rule, the VAT obligation arises when the goods are handed over to the buyer (Article 19 (1) of the VAT Act). However, if the handover of the goods should be confirmed by an invoice, the tax obligation arises at the time of issuing the invoice, but not later than on the 7th day from the date of delivery of the goods (Article 19 (4) of the VAT Act). If, before the goods were released, part of the payment was received, in particular prepayment, advance payment, down payment or installment, the tax obligation arises upon receipt of the indicated part of the payment (Article 19 (11) of the VAT Act).
The VAT Act also takes into account the possibility of conducting business via the Internet and the related method of shipping goods to customers. In this case, a special moment of the tax obligation arises for the seller, which depends on the way the contractor settles the amount due for the goods. The sale of goods via the Internet most often includes the following payment options:
sending goods cash on delivery,
making a prepayment by the buyer,
payment on personal collection at the company's premises,
sending the goods with an invoice with an extended payment date.
Cash on delivery for goods shipment
Sending the goods to the customer by cash on delivery, by using the services of Poczta Polska or a selected courier company, causes that the tax obligation arises later - only when the seller receives the payment from the parcel carrier. The date of receipt of the payment is the date when the amount due is credited to the seller's bank account. Such a procedure is governed by Art. 19 paragraph 13 point 6 of the VAT Act.
Prepayment is the most popular and particularly preferred by sellers form of payment for the purchased goods or services. In such a situation, in accordance with Art. 19 paragraph 11 of the VAT Act, the tax obligation arises upon receipt of the entire amount due or its agreed part.
Payment upon personal collection at the company's premises
In a situation where the seller conducting mail-order activity allows the goods to be picked up at the seat of his company, and the buyer takes advantage of this option, Art. 19 paragraph 1 of the VAT Act. In the described case, the tax obligation arises when the goods are handed over to the buyer or a person designated by him.
Sending the goods with an invoice with an extended payment date
The entrepreneur has the option of sending the customer the goods together with an invoice that includes the extended payment period, for example up to 30 days. In such a situation, in accordance with the general rules, the tax obligation arises at the time of issuing this invoice, but not later than on the 7th day from the date of issue of the goods.
Settlement of shipping costs
Another problematic issue is how the shipping costs paid by the buyer are taxed. According to Art. 29 sec. 1 of the VAT Act, the tax base is the turnover, i.e. the amount due from the sale, reduced by the amount of the tax due. Therefore, shipping costs should, in principle, be treated as one of the elements of the final price for the goods. Thus, by analogy, taxation should be made on the same terms as the supply of goods.
Return of an unclaimed parcel
In the course of business, there are also situations in which the customer refuses to collect a package sent with cash on delivery, which, apart from the goods, also includes an invoice. The parcel is sent back to the sender, which in this case is the seller. But what to do with an already issued invoice? In the discussed case, no VAT obligation arose, because the transaction was not completed and the invoice was not introduced into legal circulation (Tax Office Łódź-Polesie, October 25, 2006, USIII / 443 / VAT / 397/77/06 / WO) . Therefore, the seller should cancel the unfortunate invoice (by fastening the original and the copy) and describe the reasons why the invoice did not give rise to tax liability.
The development of the Internet also makes it possible to sell and ship goods also abroad. In this situation, however, it should be borne in mind that, depending on the origin of the contractor, it may turn out that the seller should fulfill additional administrative obligations in the field of VAT. For example, a seller may be required to register for VAT in the country of the consumer to whom he is making mail order sales. Each country individually determines the moment when the tax obligation arises and limits on the value of goods sold within the scope of mail order sales.