Intra-Community supply of goods
Polish entrepreneurs sell goods not only on the territory of our country, but also beyond its borders. In the event that the goods are exported from Poland to the territory of another country, we may be dealing with an intra-Community supply of goods or with an export. How to distinguish between these two activities to correctly qualify the export of goods carried out by a Polish entrepreneur?
What is an intra-Community supply of goods?
Intra-Community supply of goods (ICS) is nothing else than the export of goods from the territory of Poland, to the territory of another country, included in the European Union countries, and the transfer of the right to dispose of the goods as the owner. It should be noted, however, that this delivery is made to an entity that has a valid EU VAT number, i.e. a tax identification number (NIP) preceded by a two-letter code of the country of registration, in Poland it is the prefix PL. If the entrepreneur intends to make transactions with foreign contractors within the EU Member States, he is obliged to register for EU VAT, which is made using the VAT-R form. In order for the export of goods to be counted as intra-Community supply of goods, both the buyer and the supplier must meet several conditions:
- The buyer must be a taxpayer of value added tax or a legal person not being a taxpayer of value added tax identified for the purposes of intra-Community transactions and come from a European Union Member State other than Poland.
- The seller must be a taxpayer conducting business activity, not benefiting from VAT exemptions and registered for EU VAT at the time of submitting the VAT declaration.
When does the tax obligation arise in the case of intra-Community supply of goods?
Pursuant to Art. 20 paragraph 1 of the VAT Act "In the case of intra-Community supplies of goods, the tax obligation arises on the 15th day of the month following the month in which the goods were delivered, subject to sec. 2-4 ".
The intra-community delivery of goods took place on April 19, 2019. The invoice was issued by the taxpayer on May 18, 2019. Pursuant to the act, the tax obligation in this case arose on May 15, 2019. This is in line with the rule that no later than the 15th of the month following the month in which the delivery was made. If the taxpayer issued an invoice on the day the goods were delivered, then the tax obligation would arise on April 19, 2019.
Documenting the export of goods
As a rule, the intra-Community supply of goods may be taxed at the 0% rate, but in order to apply it, the taxpayer must present documentation that will confirm that the goods subject to intra-Community supply have actually been exported from the territory of Poland to the territory of another European Union Member State. These documents are listed in Art. 42 sec. 3 of the VAT Act “The evidence referred to in sec. 1, point 2, are the following documents, if they jointly confirm the delivery of goods which are the subject of the intra-Community supply of goods to the buyer located in the territory of a Member State other than the territory of the country:
- transport documents received from the carrier (forwarder) 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 the territory of the country - in the event that the transport of goods is commissioned to the carrier (forwarder),
- specification of individual items of cargo.
Changes in documenting intra-Community supplies from 2020:
- New conditions for applying the 0% rate. The bill introduces an obligation for the buyer to provide the supplier of goods with an appropriate and valid identification number for intra-Community transactions. In addition, the provisions also introduce a condition for the supplier to submit correct summary information.
- Among other things, rules for collecting and recognizing documents confirming the delivery in the territory of another Member State.
Export of goods
The export of goods takes place when we deal with the export of goods from a country outside the territory of the European Union confirmed by the customs office, if the export is made by:
- the supplier or on his behalf,
- a buyer established outside the country or on its behalf.
In addition, before leaving the European Union, the exported goods are subject to customs control. This is done by the last customs office before the goods leave the customs territory of the Community.
Just like the intra-community supply of goods, exports are also taxed at 0%. However, in order to benefit from the preferential tax rate, the export of goods must meet certain conditions. These are:
- the export takes place from Poland outside the territory of the European Union,
- is made as part of the delivery of goods,
- has been certified by the customs office specified in the customs regulations,
- was made by the supplier or by the buyer established outside the territory of Poland.
In order to apply the aforementioned preferential rate, it is necessary to present the relevant documents confirming that the goods were exported outside the territory of the EU. Such documents include:
- an electronic document, received from the IT system used to handle export declarations or a printout of this document confirmed by the customs office (IE-599);
- an electronic document from the ICT system used to handle export declarations, received outside this system, if its authenticity is ensured, consisting in the tax authority checking the correctness of the document sent.
- the paper-based export declaration submitted outside the IT system used to handle export declarations or its copy certified by the customs office.
Place of taxation
The place of taxation for the export of goods will be the country of destination. It should be understood that if we transport goods from Poland to Ukraine, the place of taxation will be Ukraine.
The date on which the tax obligation arises in the case of export
The regulations concerning the moment when the tax obligation arises in the case of export can be found in Art. 19a of the Value Added Tax Act. According to the general rule, the tax obligation arises when the goods are delivered or the whole or part of the payment is received.
A Polish entrepreneur exports goods to Switzerland. The delivery took place on August 13, 2019. The tax obligation arises in the case of exports in accordance with the general rule, so in the above-mentioned situation it will be August 13, 2019.
Pursuant to Art. 41 sec. 7 if the taxpayer does not have an appropriate document confirming the export of goods, he does not show this delivery in the records for this accounting period, only the next one, applying the 0% rate. However, it should be remembered that before submitting the declaration, he must have the appropriate document confirming the exportation of the goods. In a situation where the taxpayer does not have such a document, he must apply the rates applicable to the delivery of this product within the territory of the country.
INTRA-COMMUNITY SUPPLY OF GOODS
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ARISING OF TAX OBLIGATION
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PLACE OF TAXATION
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