Online purchase of software by a non-vat from a non-EU contractor

Service-Tax

Running a business nowadays often involves the necessity to purchase software for the company, not only for active VAT payers, but also for non-VAT payers. Due to the wide selection of software suppliers, it may happen that the purchase is made from a contractor outside the European Union. Find out how to settle the purchase of software online by a non-VAT from a contractor outside the EU!

Online software purchase - service or goods?

Where online software is purchased in the form of a license or copyright purchase (not in a box version), the transaction is billed as the purchase of an electronic service. Only when the purchase takes place as a purchase of software in a boxed version, i.e. in the form of a physical medium - e.g. CD or DVD, the transaction should be treated as a purchase of goods. The case of purchasing the software in the online version (without the physical carrier of the purchased software) is considered below.

Purchase of a service from a contractor outside the EU in VAT

If the taxpayer buys services from a foreign contractor who does not have a permanent place of residence or a permanent place of business in Poland, the services are imported. In such a situation, the obligation to calculate VAT lies with the buyer (instead of the seller, under the so-called foreign "reverse charge"). At the same time, in the case of active VAT payers, if the purchase is for activities subject to VAT, the buyer also has the right to deduct VAT.

As for non-VAT taxpayers, no VAT is charged or deducted, only VAT due to the tax office is paid unilaterally. VAT calculated in this way on the date of its payment may be included in tax costs by posting it in the 13th column of the KPiR - other expenses. Accounting is made with the use of an internal ID, a free template of which can be found in the article: Internal evidence - a model with a detailed description. The taxable amount here will be the total value of the invoice received (payment value). Therefore, in a situation where the buyer is treated as a natural person not conducting business, and the invoice will include the input VAT, the buyer is obliged to settle VAT on the gross value of the invoice. The purchase of a service from outside the EU shows a non-vat in the VAT-9M or VAT-8 declaration (if an intra-Community purchase also took place in a given period), which must be submitted and settled to the competent tax office (in accordance with the taxpayer's place of residence) by the 25th day of the month following the month in which the tax obligation arose.

If the value of the transaction is expressed in a foreign currency, it should be converted into PLN based on the average NBP exchange rate on the last business day preceding the day when the tax obligation arises.

Due to the fact that the provisions do not regulate the moment when the tax obligation in the import of services arises, it is established on general principles. Therefore, at the time of importing services at a non-VAT payer, the VAT due must be shown at the time the service is performed (in whole or in part) or when the payment is received - if the settlement took place before the service was performed.

Example 1.

On November 4, 2020, the taxpayer exempted from VAT purchased (on that day the sale took place) and paid for the online software from a contractor outside the EU. The value of the software was 80 euros. In this situation, the value of the purchase in a foreign currency should be converted into PLN according to the exchange rate of the National Bank of Poland on November 3, 2020. The euro exchange rate on the given day was 4.5699, therefore the purchase value is PLN 365.59.

Import of services in KPiR

In the book of revenues and expenses, the purchase of a service should be booked on the date of incurring the expense, i.e. on the date of issuing the invoice (or other document constituting the accounting document). If the invoice was issued in a foreign currency, the value of the invoice should be converted into PLN on the basis of the average exchange rate of the National Bank of Poland on the last business day preceding the date of issuing the invoice.

Example 2.

On October 16, 2020, a non-vatowiec purchased online software from a non-EU contractor for $ 45. The invoice documenting the purchase was issued on October 20. What exchange rate should be used to convert the purchase value on the PIT land?

In this case, the invoice value should be converted into PLN according to the NBP exchange rate from October 19. This exchange rate for USD was 3.8761, therefore the purchase value in PLN was 174.43.

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Online purchase of software by non-vat at wFirma.pl

The purchase invoice in the wFirma.pl system in the case of non-VAT should be posted through the tab: EXPENDITURE »ACCOUNTING» ADD »EXPENSES, selecting the IMPORT SERVICES option in the ADVANCED sub-tab. If the invoice was issued in a foreign currency, it can be selected using the CURRENCY option.

On the other hand, in the sub-tab: BASIC INFORMATION, in the TYPE OF EXPENSE field, select OTHER EXPENDITURE RELATED TO BUSINESS ACTIVITY, in VAT RATE: appropriate national VAT rate for the purchased service (usually 23%), and in NET VALUE: value of the invoice received.

In order to generate the VAT-9M / 8 declaration, go to the tab: START »TAXES» VAT TAX »ADD» VAT 8 / VAT-9M DECLARATION.

Information about the payment of the declaration must be added by marking it and selecting the option SETTLEMENT. As a result, the paid VAT will be included in the costs in the form of an internal proof (the proof is generated automatically after adding the payment on the date of payment).