Purchase of goods from abroad and taxation of PCC
Entrepreneurs increasingly buy goods from abroad. In the case of a purchase from an EU taxpayer, the Polish entrepreneur will recognize the intra-Community acquisition of goods. If the goods are purchased from a foreign private person, there will be a transaction that is not subject to VAT in Poland. In the case of purchases of second-hand goods from a private individual in Poland, the entrepreneur must remember to tax this transaction with PCC. How, however, if the seller is a foreign private person? What exactly is PCC taxation? Check it out below!
Taxation of PCC
Pursuant to Art. 1 clause 1 of the PCC Act, taxation with tax on civil law transactions is subject to:
- the following civil law actions:
- contracts for sale and exchange of goods and property rights,
- loan agreements for money or items labeled only as to the species,
- donation agreements - in the part concerning the taking over by the recipient of debts and burdens or obligations of the donor,
- life annuity contracts,
- agreements on inheritance division and agreements on the dissolution of joint ownership - in the part concerning repayments or additional payments,
- establishing a mortgage,
- establishment of paid use, including incorrect use, and paid easement,
- irregular deposit agreements,
- company agreements,
- changes to the above-mentioned contracts, if they increase the tax base with the tax on civil law transactions,
- judgments of courts, including conciliatory ones, and settlements, if they have the same legal effects as the above-mentioned civil law actions.
Acquisition by a Polish buyer living in Poland of goods with a value exceeding PLN 1000 results in the necessity to pay tax on civil law transactions.
Territorial scope and taxation of PCC
Pursuant to Art. 1 clause 4 of the PCC Act, civil law transactions are subject to PCC tax if their subject matter is:
things located on the territory of the Republic of Poland or property rights exercised on the territory of the Republic of Poland,
things located abroad or property rights exercised abroad, where:
the buyer is domiciled or established in the territory of the Republic of Poland and
the civil law transaction was performed on the territory of the Republic of Poland.
Transaction subject to VAT and PCC taxation
Pursuant to Art. 2 point 4, civil law transactions other than the articles of association and its amendments are not subject to PCC taxation:
- to the extent that they are subject to tax on goods and services,
- if at least one of the parties is exempt from tax on goods and services for this activity, except for:
- sale and exchange contracts, the subject of which is real estate or a part of it, or the right of perpetual usufruct, cooperative ownership right to the premises, the right to a single-family house in a housing cooperative or the right to a parking space in a multi-car garage or participation in these rights,
- agreements for the sale of shares and stocks in commercial companies.
Purchase of goods from a private individual
A Polish VAT payer who purchases goods from a foreign private person (not conducting business activity) will not recognize the intra-Community acquisition of goods. The transaction in question will not be subject to VAT. However, whether it will be subject to PCC depends primarily on the place of conclusion of the sales contract. If the contract is concluded outside Poland, then it will not be subject to PCC tax.
The above position is confirmed by an individual interpretation of the Lubuskie Tax Office of August 24, 2005, ref. No. LUS / I-2 / 443-79 / 05 / KW or the individual interpretation of the Director of the Tax Chamber in Katowice of April 22, 2016, ref. No. IBPB-2-1 / 4514-112 / 16 / DP, as well as the individual interpretation of the Director of the Tax Chamber in Bydgoszcz of August 7, 2009, ref. No. ITPB2 / 436-72 / 09 / PS.
Foreign internet auctions
If the Polish taxpayer purchases goods at foreign online auctions, then the place of the transaction is determined based on the place of residence or the seat of the person submitting the purchase offer at the time of concluding the contract.
In this situation, when a Polish taxpayer residing in Poland makes a purchase at a foreign online auction, the given purchase agreement is deemed to have been concluded in Poland. In connection with the above, the acquisition of the goods in question will be subject to taxation of the PCC tax in Poland. Of course, if it turned out that the seller of these goods is an active or VAT-exempt VAT payer, then the transaction in question would not be subject to PCC, as it would be subject to the VAT Act.
The same opinion is shared by the Director of the Tax Chamber in Katowice in the individual interpretation of December 7, 2016, ref. No. 2461-IBPB-2-1.4514.511.2016.2.PM.
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Identification of activities performed in VAT due to concluded contracts for the purchase / sale of goods
Finally, it is worth noting that those activities which result in the creation of a VAT obligation are excluded from taxation with PCC.
This means that the exclusion of PCC taxation of the sales contract is not determined by the status of the parties to the transaction as VAT taxpayers, but it is also important that at least one of the parties is taxed or exempt from the performance of this specific civil law transaction (e.g. conclusion of a contract for the sale of goods). VAT.
Therefore, the exclusion of a given civil law transaction from PCC taxation will take place only when one of the parties is a VAT taxpayer due to the performance of this activity. Therefore, when concluding sales contracts, the taxpayer status must be possessed by the seller, while the tax status of the buyer is irrelevant, because at the time of purchasing the goods from a seller who is not a taxpayer, the buyer will not recognize the obligation to tax a given transaction in VAT.
The above is reflected in the individual interpretation of the Director of the Tax Chamber in Katowice of September 13, 2016, ref. No. IBPB-2-1 / 4514-348 / 16-2 / MZ.