Purchase of a car abroad by an active VAT payer

Service-Tax

The car in the company is not a unique phenomenon, on the contrary - quite common. Entrepreneurs often comparing offers decide to buy a car abroad. To what tax consequences do they risk then? What determines the correct tax settlement of vehicles bought in other countries? You will find the answers to these and many other questions below.

Purchase of a car abroad by an active VAT payer - possible cases

The settlement of the car purchase depends on many factors, namely:

  • from the country from which the purchased car will be imported,

Countries currently belonging to the European Union:
Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Greece, Spain, Ireland, Lithuania, Luxembourg, Latvia, Malta, Netherlands, Germany, Poland, Portugal, Romania, Slovakia, Slovenia, Sweden, Hungary, Italy.

  • from the condition of the car: new or used,

A new car is one that meets at least one of the two following parameters:
1) the odometer reading does not exceed 6,000 km,
2) no more than 6 months have elapsed from the moment of its release for use (usually the date of the first registration).

  • on the tax status of the seller: a taxpayer of value added tax (i.e. VAT) or a private person,

Value added taxpayer - that is, any foreign company (foreign taxpayers benefiting from VAT exemptions are omitted here as very rare cases when selling cars).

  • on the sales document: VAT invoice, VAT-margin invoice, sales contract.

VAT invoice (invoice / rechnung) - a document issued by a value added tax (VAT) taxpayer.
VAT margin invoice - a document which does not show the rate and value of VAT, with an annotation about the use of the margin VAT procedure, often with reference to the regulations in force in a given country.
Sales contract - a document confirming the purchase from a natural person not conducting business activity.

Purchase of a car abroad within the European Union

Settlements for the purchase of a car from the European Union are divided into:

  • general rules - ordinary purchase without the obligation to settle VAT,

  • intra-community acquisition of goods - the obligation to calculate VAT rests with the buyer.

So when and with what of the following situations may an entrepreneur come into contact when purchasing a car in another EU country?

Buying a car in the EU - excise duty

After the vehicle has been moved to the territory of Poland, the taxpayer should submit a simplified AKC-U / S declaration to the customs office no later than within 14 days and no later than on the day the car is registered at the national communication office.

The excise duty payment deadline is 30 days from the date of movement or on the vehicle registration date if it takes place earlier than the above 30 days.

The basis for calculating the excise duty is:

  • value from the purchase document.

Excise duty rates:

  • 3.1% for cars with an engine capacity of up to 2,000 cm3,
  • 9.3% for passenger cars:
    • with hybrid diesel-electric propulsion, in which electricity is not accumulated by connection to an external power source, with a combustion engine capacity of more than 2,000 cm3 but not more than 3,500 cm3,
    • constituting a hybrid vehicle within the meaning of art. 2 point 13 of the Act of 11 January 2018 on electromobility and alternative fuels (Journal of Laws of 2019, items 1124, 1495, 1527 and 1716 and of 2020, item 284) with a combustion engine capacity greater than 2,000 cm3, but not more than 3,500 cm3;
  • 1.55% of the tax base - for passenger cars with a hybrid diesel-electric drive, in which electricity is not accumulated by connecting to an external power source, with a combustion engine capacity equal to or less than 2,000 cm3;
  • 18.6% for cars with an engine capacity above 2,000 cm3.

The AKC-U / S declaration is addressed to: the head of the tax office competent for the place of residence or registered office (44 such heads in Poland)

We submit the AKC-U / S declaration: a) on paper or 2) electronically via the Platform for Electronic Tax and Customs Services (PUESC).

The AKC-U / S declaration must be accompanied by:

  • a copy of the vehicle purchase document (purchase and sale agreement, bill, invoice), and the original available for inspection,

  • application for a certificate confirming the payment of excise duty on the territory of the Republic of Poland on a passenger car purchased from the EU,

  • a receipt for stamp duty payment in the amount of PLN 17 for each purchased passenger car, if the application is submitted in paper form Note: the fee does not apply to applications submitted electronically.

  • vehicle documents such as: vehicle card, EU registration certificate - copy (original available for inspection).

Purchase of a car in the EU, not being WNT

In the case of buying a car abroad (in the EU), which cannot be classified as an intra-community transaction, the buyer is not required to pay VAT on such a purchase. Thus, when converting the value resulting from the purchase invoice according to the exchange rate from the day preceding the day of putting the fixed asset into use, it introduces it into fixed assets.

The regulations limit the possibility of including as tax costs depreciation write-offs on the value of a passenger car exceeding PLN 150,000 for combustion vehicles. PLN, and for electric - 225 thousand. zloty. The resulting surplus may not constitute a tax deductible cost.

When there is no WNT:

  • purchase of a vehicle from a foreign contractor that has already been in Poland - no relocation,

  • purchase of a used car from a foreign private person (the seller's lack of an active VAT taxpayer status excludes the occurrence of WNT),

  • purchase of a used car on a VAT invoice, margin - if the seller meets the provisions for the use of such a procedure, referring to it in the invoice.

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Purchase of a car in the EU as WNT

If the purchase meets the definition of intra-Community acquisition of goods, the transaction must be settled in accordance with the rules referred to in the VAT Act. Thus, the buyer must:

  1. register for VAT-EU purposes, if of course he has not already done so, on the VAT-R form (in particular by completing part C.3 of the VAT-R);

  2. tax the purchase by paying the VAT due on the transaction to the account of the tax office within 14 days from the date of purchase;

  3. submit to the head of the tax office information on the VAT-23 form (if the buyer will be registering the vehicle in Poland or if the vehicle will not be subject to registration, but is to be used in the territory of the country) about the purchase of the car under the Intra-Community Tax Code, enclosing a copy of the invoice confirming the purchase of the measure transport and proof of tax payment (referred to in point 2);

  4. show the transaction and the tax paid in the JPK_V7 file submitted by the 25th day of the month following the settlement period in which the purchase was made;

  5. submit the VAT-EU information to the tax office in an electronic version by the 25th day of the month following the settlement period in which the purchase was made.

If WNT is entered and the vehicle is to be registered in Poland, or if it is not subject to registration, but it is to be used in Poland, you must submit a VAT-23 form to the tax office and pay the tax on this account. The tax is payable within 14 days from the date the tax obligation arises (i.e. within 14 days from the purchase of the vehicle).

Intra-Community acquisition occurs when the buyer has registered for VAT-EU or is required to register, and one of the following cases occurs:

  • a used car was purchased from an active VAT payer (this does not apply to purchases under the VAT margin procedure) with an active VAT-EU number in the vies register;

  • the taxpayer purchased a new car from another EU country - then it does not matter who the seller was (whether a VAT payer or a private person);

  • the buyer bought the car in a third country (outside the EU) but customs clearance was performed in an EU country other than Poland.

Purchase of a car abroad in a third country (outside the European Union)

The situation will be different when the car is imported from a country outside the EU and customs clearance takes place in Poland. Then the buyer is obliged to subject the imported goods to a customs procedure (customs duty, excise duty and VAT).

Buying a car from outside the EU - customs duty

First of all, importing a car from a third country is associated with the need to calculate customs duties, and thus also to make a customs declaration. Applications can be made:

  • an electronic PZC document,

  • a paper SAD document.

The basis for calculating the duty is:

  • transaction value from the purchase document, plus

  • additional costs of transporting the vehicle and possible insurance to the external borders of the European Union (customs office of entry).

Currently, the customs duty rate is:

  • 10% (including for the USA and Canada);

  • 0% (in the case of EFTA countries, eg Norway, Switzerland).

Buying a car from outside the EU - excise duty

Cars imported from third countries, as well as those bought in EU countries, are subject to excise duty before the first registration in Poland. It is therefore necessary to calculate and prove the amount of the excise duty in the customs declaration.

The basis for calculating the excise duty is:

  • customs value, plus

  • duty payable.

Excise duty rates:

  • 3.1% for cars with an engine capacity of up to 2,000 cm3,
  • 9.3% for passenger cars:
    • with hybrid diesel-electric propulsion, in which electricity is not accumulated by connection to an external power source, with a combustion engine capacity of more than 2,000 cm3 but not more than 3,500 cm3,
    • constituting a hybrid vehicle within the meaning of art. 2 point 13 of the Act of 11 January 2018 on electromobility and alternative fuels (Journal of Laws of 2019, items 1124, 1495, 1527 and 1716 and of 2020, item 284) with a combustion engine capacity greater than 2,000 cm3, but not more than 3,500 cm3;
  • 1.55% of the tax base - for passenger cars with a hybrid diesel-electric drive, in which electricity is not accumulated by connecting to an external power source, with a combustion engine capacity equal to or less than 2,000 cm3;
  • 18.6% for cars with an engine capacity above 2,000 cm3.

The excise duty payment deadline is 30 days from the date the customs debt arises or on the vehicle registration date if it takes place earlier than the above 30 days.

Buying a car from outside the EU - VAT

On the basis of the customs declaration, the customs office also charges VAT on the purchased car. The basis for calculating VAT for cars imported from third countries is:

  • Customs Value (Customs Base), Plus

  • duty due, plus

  • excise tax.

The VAT rate on goods and services is, as a rule, 23%.

Therefore, buying a car abroad is often associated with the need to fulfill formal obligations, but above all tax obligations. Therefore, it is important to remember to classify the transaction well and meet all statutory requirements not only in the field of VAT but also excise duty, and in the case of import from outside the EU in the field of declaration and payment of customs duty.