Goods from non-VAT received earlier than invoice

Service-Tax

I received commercial goods in December but no invoice. It was posted in January. I would like to add that the supplier is not an active VAT payer. What should I do in such a situation and when should I show the purchased goods from non-VAT in the KPiR?

Andrzej, Brzeg

 

According to the general rule, cost invoices are posted to the KPiR on the invoice issue date. It is worth noting, however, that the method of booking may differ depending on the type of the object of purchase in the context of its use in the conducted activity. In the case of commercial goods, the fact of having an invoice does not matter, because the commercial goods must be shown in the KPiR on the day of their receipt, at the latest on the day of their transfer to the warehouse or sale. Therefore, the purchased goods should be included in the KPiR in December.

Trade goods and materials - definition

In order to correctly account for costs, it is first necessary to determine whether the purchase is a commercial commodity, material or other operating cost for the taxpayer. Costs related to goods and materials should be entered in the books by the taxpayer in col. 10 in the KPiR, while the remaining expenses in col. 13 in the KPiR.

The valuation of purchased commercial goods and materials in the KPiR is made at their purchase prices. The purchase price is the value that the buyer pays for the purchased assets (less VAT if purchased from an active VAT payer).

Definitions of goods and materials can be found in the regulation of the Minister of Finance on keeping a tax book of revenues and expenses. Pursuant to § 3 sec. 1 lit. and the above-mentioned the regulation of trade goods are products intended for sale unprocessed or by-products obtained during the running of special departments of agricultural production. According to this definition, a commercial good will be any purchase that is intended for resale unchanged.

Example 1.

Mr. Dominik runs a drugstore. He purchased perfumes from a wholesaler, which he will sell in his business. They will constitute commercial goods as they will be resold to the customer unchanged.Therefore, the invoice documenting their purchase should be entered in col. 10 of the KPiR.

The concept of basic materials is governed by § 3 para. 1 lit. b of the regulation, according to which the basic materials are materials that become the main substance of the finished product in the production process or in the provision of services. They also include materials that form a component part of the product or are closely related to it. Packaging, such as cans or bottles, and reusable shipping packages, such as transporters or pallets, may also be included, provided that these packages are not considered fixed assets.

Col. 10 also includes auxiliary materials which, although not strictly constituting the final product, are used to produce it and reflect their properties directly to the product.

Example 2.

Mr. Marian runs a carpentry workshop. For its activities it buys, among others wooden planks, nails, glue and tools such as hammer and saw. How should the above expenses qualify?

Wooden boards and nails will be the basic materials as they are the main components of the finished product. Adhesives, on the other hand, will be auxiliary materials, due to the fact that they are also used to produce the finished product. The purchased tools, even though they are used in the production process, do not constitute a component of the finished product, therefore they will be the remaining operating costs. Basic and auxiliary materials are booked in col. 10 in the KPiR, while the remaining expenses in col. 13 in the KPiR.

Documenting costs in the KPiR

The expenditure may be booked to the KPiR as a tax expense in a situation where it meets the definition of tax deductible cost and has been properly documented with an accounting document, e.g. an invoice, RR VAT invoice, bill or customs document. In addition, the catalog of documents constituting accounting evidence is also included in § 12 of the Regulation, according to which they include:

  • daily statements of evidence (sales invoices) prepared for posting with a collective entry;
  • accounting notes drawn up to correct the entry on a business transaction resulting from a foreign or own ID, received from the taxpayer's counterparty or provided to the counterparty;
  • evidence of shifts;
  • proofs of postage and bank charges;
  • internal evidence.

It might seem that in this situation the goods purchased from a non-VAT owner should be booked only on the basis of the invoice received. However, there is another aspect of the type of purchase you have made, which is the merchandise intended for resale, to consider.

How to book the purchased goods from non-VAT without an invoice?

Goods intended for resale are an exception to the cost accounting method. Pursuant to § 16 sec. 1 of the ordinance, the purchased basic materials and commercial goods should be recognized in the KPiR immediately after their receipt, at the latest before they are transferred to the warehouse, processed or sold.

This means that regardless of when the taxpayer receives the invoice documenting the purchase of goods, he is obliged to show the cost in the col. 10 of the KPiR immediately after receiving the goods. In such a situation, the basis for entry in the KPiR will be a detailed description of the goods, which should include, among others:

  • name, surname (company) and address of the supplier;
  • quantity and type of commercial goods purchased;
  • unit price;
  • commercial commodity value;
  • the date of receipt of the goods;
  • signature of the person accepting the goods.

If, after receiving the invoice, it turns out that the value on the invoice differs from the description, the trader will be required to make adjustments.

It is also irrelevant whether the entrepreneur purchased the goods from an active or exempt taxpayer. In both cases, there is an obligation to post the purchased goods as soon as they are received, even in the absence of an invoice.

To sum up, in a situation where commercial goods or materials are delivered before receiving the invoice documenting their purchase, it is necessary to create a detailed description and on this basis to show the purchase in the amount of KPiR immediately after receiving the goods. It does not matter if the goods were purchased from a non-VAT.