Intra-Community acquisition of means of transport
Intra-Community acquisition of means of transport. Having the choice of buying a car in the country or abroad, entrepreneurs often decide on the second option. Especially often you can meet the purchase of a car from European Union countries - mostly from Germany. This acquisition is called intra-Community acquisition of goods. It is worth knowing what they are and how exactly the intra-Community acquisition transactions proceed and what tax obligations are related to them.
Intra-Community acquisition of goods - definition
The definition of intra-Community acquisition of goods (WNT) is explained in Art. 9 sec. 1 of the VAT Act. According to this provision, intra-Community acquisition 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 dispatched or transported within the territory of a Member State, other than the territory of the Member State of commencement of dispatch or transport by the person delivering the goods, the buyer of the goods or on their behalf. . This provision means that intra-Community acquisition takes place only when the goods are moved from the territory of another Member State to the territory of Poland (or another EU country).
Supplier and buyer of an intra-community acquisition
Pursuant to the Act, an intra-Community acquisition takes place when:
- the buyer of the goods is:
- the taxpayer referred to in art. 15 (legal persons, organizational units without legal personality and natural persons conducting independent economic activity), or a taxpayer of value added tax, and the purchased goods are to be used for taxable activities,
- non-taxable legal person.
- the person delivering the goods is a taxable person.
These provisions mean that the supplier must be a VAT taxpayer, while the recipient may or may not be an active VAT taxpayer. In addition, remember to register with the tax office as an EU VAT-EU taxpayer.
Exclusions from intra-Community acquisitions of goods
The act also lists cases where the acquisition of goods cannot be called intra-community acquisition. In art. 10 sec. 1 of the VAT Act, a catalog of goods that cannot be acquired within the Community is listed. It is worth focusing on point 2 of paragraph, which excludes goods purchased by:
- flat-rate farmers for their agricultural activities,
- taxpayers who only perform activities other than those subject to tax and who are not entitled to reduce the amount of tax due by the amount of input tax on the purchase of goods and services,
- taxpayers exempt from tax pursuant to art. 113 paragraph. 1 and 9 (with revenues not exceeding PLN 150,000),
- legal persons that are not taxpayers,
- if the total value of the intra-Community acquisition of goods within the territory of the country did not exceed PLN 50,000 during the tax year.
Purchase of a new and used car
It should be remembered that the exclusions listed in Art. 10 sec. 1 of the VAT Act does not apply to the acquisition of new means of transport or excise goods. So if we buy a new car from abroad, we always have to consider the transaction as an intra-Community acquisition of goods, irrespective of its purchase price. The acquisition of a new means of transport from another EU Member State is always taxed in the country of destination, i.e. in the country where the car will be used. The status of the seller and buyer is irrelevant here. Even if neither of the parties to the transaction will be a VAT payer (e.g. they will be two natural persons), the transaction will still be an intra-Community acquisition of a means of transport. Therefore, it will be necessary to settle the tax on goods and services in Poland.
The taxpayer should be aware of the fact that even the previously used means of transport may be considered new in the following situations:
- if it has traveled no more than 6,000 km and no more than 6 months have elapsed from the moment of putting it into service,
- if it has traveled no more than 6,000 km, but more than 6 months have passed since it was put into service,
- if it has traveled more than 6,000 km, but no more than 6 months have elapsed since it was put into service.
There are exceptions to the above-mentioned exceptions when purchasing a used car. This means that if the entrepreneur is exempt from VAT and purchases a car, for example worth PLN 40,000, such a purchase will not be included in the Intra-Community Tax Act.
The tax base
Pursuant to Art. 31 of the VAT Act, the taxable amount for intra-Community acquisition of goods is the amount that the buyer is obliged to pay, additionally increased by:
- taxes, duties, fees and other charges of a similar nature related to the acquisition of goods, except for tax,
- additional expenses, such as commissions, transport costs and insurance, which are collected by the supplier from the entity making the intra-Community acquisition.
Calculation of VAT
According to the act on tax on goods and services, intra-Community acquisition of goods is subject to VAT. Pursuant to Art. 5 sec. 1 of the act on tax on goods and services, the tax covers in particular:
- delivery of goods for consideration and provision of services for consideration within the territory of the country;
- export of goods;
- import of goods;
- intra-Community acquisition of goods for consideration within the territory of the country;
- intra-Community supply of goods.
The intra-Community acquisition of goods is considered to have been made in the territory of the Member State in which the goods are located at the time when their dispatch or transport is completed. This means that the tax rates applicable in the recipient's country are used for settlement, i.e. if a car is purchased by a Polish entrepreneur, it will be 23%. The settlement of intra-Community acquisition of goods is made on the basis of an internal invoice issued by a VAT taxpayer, which can be issued (but not necessary) during this type of transaction.
Tax due and charged
Pursuant to Art. 86 of the VAT Act, to the extent that the purchased goods and services are used to perform taxable activities, the taxpayer has the right to reduce the amount of tax due by the amount of input tax. The tax on intra-Community acquisition is both output tax and input tax. Pursuant to Art. 86 point 2 sec. 4, the amount of input tax in this case is the amount of output tax.
In practice, this means that, in the first place, the entity making the intra-Community acquisition is required to pay tax for the purchase of the car. This payment should be made within 14 days from the date the tax obligation arises, i.e. from the moment of physical receipt of the means of transport, no later than the moment the documenting invoice is issued by a foreign VAT payer. The taxpayer is obliged to send to the tax office a VAT-23 declaration with information about the purchased means of transport. A copy of the invoice confirming the purchase of the car should be attached to the declaration. Please note that the VAT-23 form is not a tax declaration and is not used to settle VAT on the intra-Community acquisition of a means of transport.
The obligation to submit the VAT-23 form occurs when:
- we are dealing with an intra-Community acquisition of a means of transport (new or different) and
- the means of transport is to be registered by the buyer in the territory of the country or if it is not subject to such an obligation, and is to be used in the territory of the country.
In addition, active VAT taxpayers and non-taxable entities, but due to the amount of purchase made from EU countries or their own choice - settling VAT on intra-Community acquisition of goods, recognize the amount of tax on car purchase paid to the tax office as due tax. This tax is shown in the monthly VAT-7 (or quarterly VAT-7K) declaration, in a special place for intra-Community acquisition of goods.
If the taxpayer is an entity that is not obliged to submit monthly or quarterly tax declarations, but makes intra-Community acquisition of a new means of transport, that entity is required to complete and submit a VAT-10 declaration (within 14 days of the tax obligation arising).
Active VAT payers are also entitled to deduct VAT previously paid to the tax office. Tax on intra-Community acquisition reduces the value of output tax. It can therefore be concluded that the tax will be equal to "0". However, in the case of passenger cars, remember to limit the possibility of tax deduction. The deduction can only be made in the amount of 60% of the total tax amount, not more than PLN 6,000. Thus, in the case of intra-community acquisitions of cars, the output tax will have to be paid. The obligation to pay the tax due arises on the 15th day of the month following the month in which the intra-Community acquisition was made, and the taxpayer has 14 days to pay it.
The regulations provide for situations where the intra-Community acquisition of goods is exempt from VAT. The acquisition is tax-free if the subject of the acquisition are:
- human organs and breast milk,
- blood, plasma in full composition, blood cells or blood preparations of human origin, not being drugs,
- currencies, banknotes and coins used as legal tender, excluding collectors' items which are gold, silver or other metal coins and banknotes which are not normally used as legal tender or which have numismatic value,
- gold for the National Bank of Poland.
Moreover, goods whose importation under the conditions specified in the provisions on the importation of goods would be tax-exempt are also exempt from tax.The release also applies to goods placed under the customs warehousing, transit, temporary admission procedure with full exemption from import duty, inward processing under the suspension system, in the territory of a Member State other than the territory of the country, provided that these goods cease to be subject to these procedures in the territory of the country.
The intra-community acquisition of a car is not legally exempt from VAT. Therefore, the entity making such an acquisition should take into account the applicable general provisions on intra-Community acquisition of goods, explained above.