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Cross-border supplies

DOCUMENTATION CONFIRMING CROSS-BORDER SUPPLIES REQUIRED ACCORDING TO THE POLISH VAT LAW

 

Based on the local VAT legislations, some countries, including Poland, condition the right to apply the exemption from VAT or 0% VAT rate on the supplies of goods from possessing by the seller a relevant documentation confirming transportation and reception of goods by the recipient.

It is crucial for the sellers of goods to realise that lack of relevant documentation exposes them on the necessity of applying standard domestic VAT rate instead of exemption. What is important, this often triggers also additional costs related to filing amendments of the VAT reports as well as payment of interest from VAT arrears.

This information is focused on three main types of cross-border supplies of goods to which Polish VAT Act requires documentation i.e.:

  • export of goods to third countries,
  • intra-community supplies, including displacements of own goods,
  • distance sales.

 

  1. EXPORT OF GOODS TO THIRD COUNTRIES

 

According to the Polish VAT Act, export of goods to third countries shall be taxed with 0% VAT rate provided that the seller has received a document confirming the export of goods outside the territory of the European Union. Otherwise the local domestic Polish VAT rate appropriate for the goods that are subject of exportation shall be applied. Usually it is 23 or 8 percent.

The documents confirming the export of goods outside the EU are in particular:

  • a document in electronic form obtained from an IT system used to handle export declarations or a print-out of this document confirmed by the competent customs authority (if the export has been made from Poland, the appropriate electronical document is called IE599 communicate);
  • a document in electronic form originating from an IT system for handling export declarations, received outside this system, if its authenticity is ensured -usually it refers to the customs agents who are providing the confirmation of export to the seller; similarly, to item 1(if the export has been made from Poland, the appropriate electronical document is called IE599 communicate);
  • the export declaration in paper form lodged outside of the ICT system used for handling export declarations, or its copy certified by the competent customs authority (currently applying this option by customs authorities in Poland is very rare and may be applied only in case of the Customs IT system failures).

 

  1. INTRA-COMMUNITY SUPPLIES OF GOODS, INCLUDING DISPLACEMENTS OF OWN GOODS

 

Gathering and possessing relevant documentation related to intra-community supplies of goods (hereinafter “ICS”), including displacements of own goods is not an issue for most of the taxpayers. However, in case of distance sellers, especially those using Amazon fulfilment services, the sellers may be struggling with obtaining appropriate evidence related to transport and confirmation of receipt of the goods by B2B buyers. Also, the same issue may be noticed with regard to confirming displacements of own goods in case they have been moved from a warehouse located in one EU country to a warehouse located in another EU country.

 

It is worth reminding that transfer of goods to another Member State shall mean the dispatch or transport of movable tangible property by or on behalf of the taxable person, for the purposes of his business, to a destination outside the territory of the Member State in which the property is located, but within the Community. Hence displacement of goods forming part of own business assets to another Member State shall be treated as ICS.

According to Polish VAT law intra-community supplies, including displacements of own goods shall be taxed in Poland with 0% VAT rate, provided that:

  • the buyer is registered as a EU VAT taxpayer in appropriate Member State and the EU VAT number is valid at the transaction day,
  • the seller is registered as a EU VAT taxpayer at the day of submission of the VAT return in which the intra-community supply is declared,
  • the seller possesses evidence confirming that goods being the object of intra-community supply have been exported from the territory of the country and delivered to the buyer on the territory of a Member State other than the territory of Poland;

 

The evidence confirming the intra-community supplies of goods from Poland to another EU State may vary depending on the applied type of exportation of goods to other EU country:

  1. In case the goods were exported using a carrier (dispatcher), the evidence should be as follows:
  2. specification of individual pieces of cargo,
  3. transport documents received from the carrier (dispatcher) responsible for the dispatch of the goods from the territory of the Country, which unambiguously indicate that the goods have been delivered to their destination in the territory of a Member State, other than the territory of the Country – where the transport is commissioned to a carrier (dispatcher)

The evidence is acknowledged as proper if the above-mentioned documents jointly confirm the delivery of the goods being the subject of intra-Community supply.

 

  1. In case the goods were exported by using own means of transportation of the seller or buyer, the evidence confirming the intra-community supplies of goods from Poland to another EU State should be as follows:

 

  1. specification of individual pieces of cargo,
  2. an exportation document including at least following data:
    • name and surname or business name and address of the registered office or residency address of the taxable person performing the intra-Community supply of goods and the purchaser of these goods;
    • the address to which the goods are transported, if it is different from the address of the business or residence of the buyer;
    • description of goods and their quantity;
    • the confirmation of receipt by the buyer of the goods to the place referred to in point 1 or 2 located on the territory of a Member State other than Poland;
    • the plates and type of the means of transport by which the goods are exported, or flight number – when the goods are transported by air.

 

 

  1. In the case of exportation by the buyer a new means of transport without using any other means of transport (transport), the taxpayer should have a document containing data enabling proper identification of the taxpayer making deliveries and buyer and new means of transport i.e.

 

  1. specification of individual pieces of cargo,
  2. an exportation document including at least following data:
  • data on the seller and buyer,
  • data allowing to unambiguously identify the subject of delivery as a new means of transport,
  • date of delivery,
  • signatures of the taxpayer and the buyer,
  • the buyer’s statement on the export of a new means of transport outside the territory of the Poland within 14 days from the date of delivery,
  • instruction to the buyer about the consequences of failure to comply with the obligation referred to in point 5 (charging standard VAT rate on such delivery).

If the above-mentioned documents do not explicitly confirm delivery to a buyer located in the territory of a Member State other than Poland, evidence of an intra-Community supplies may also include other documents, in particular:

  1. business correspondence with the buyer, including his order;
  2. documents regarding insurance or freight costs;
  3. document confirming the payment for the goods, except for cases when the delivery is unpaid or the obligation is implemented in a different form – in this case other document confirming the expiry of the obligation;
  4. evidence that the buyer has accepted the goods on the territory of a Member State other than the territory of Poland.

 

DISTANCE SALES OF GOODS

 

This section refers only to the distance sellers who:

  • Supply goods to a taxable person, or a non- taxable legal person, whose intra-Community acquisitions of goods are not subject to VAT pursuant to Article 3(1) of Council Directive 2006/112/EC (Intra-community acquisitions) or for any other non-taxable person,
  • the goods supplied are neither new means of transport nor goods supplied after assembly or installation, with or without a trial run, by or on behalf of the supplier,
  • the sellers reached the threshold for the distance sales in EU countries to which the goods are sent from the territory of Poland or opted to tax their deliveries in the destination country without crossing the distance sales threshold.

The conditions for the recognition of a delivery of goods as a distance sale from Poland to other Member State, is possessing by the seller, before the deadline for submission of the tax return for the given tax period, documents confirming the delivery of the goods to the buyer located in the destination EU Member State.

  1. documents confirming the receipt of goods outside the country,
  2. transport documents received from the carrier (forwarder) responsible for the export of goods from the territory of the country – in the case when the carriage of goods is ordered by the taxpayer to the carrier.

In cases, where the documents referred to above do not explicitly confirm the delivery of the goods to the purchaser located in the Member State of destination for goods consigned or transported, documents showing that a delivery has taken place in the Member State of destination for items dispatched or transported may also be other documents received by the taxpayer for this type of delivery of goods, in particular:

  1. business correspondence with the buyer, including his order;
  2. document confirming the payment for the goods, except for cases when the delivery is unpaid or the obligation is implemented in a different form – in this case, another document confirming the expiry of the obligation.

IMPORTANT: lack of relevant evidence related to distance sales may result in acknowledgment such sales by the tax office as a domestic and not a distance sale.

 

Updated: January 2018