Case study
Spanish company selling IT equipment with installation, will have following operations in Poland:
-Installation, Commissioning, Configuration, IT support
-Intra EC acquisitions of goods to Poland to install them at their Polish customer premises
-Imports of goods directly from e.g. China
How is treated in Poland intra-Community acquisitions with installation? Does the non-resident supplier need to register to VAT in Poland ?
According to article 22 sec.1 pt.2 the place of delivery of goods is the place where-
2) goods that are installed or assembled, with or without a trial run, by the supplier or by an entity acting on his behalf – the place where the goods are installed or assembled; simple actions enabling the assembled or installed goods to function in accordance with their intended purpose are not considered installation or assembly.
Crucial is therefore, whether these will be simple actions/simple services i.e. those that do not require specialist knowledge and professional skills.
Assuming these will be not simple, but complex services this will be so-called complex (comprehensive) transaction, within which not only the delivery of goods but also the provision of assembly takes place. However, we do not recognize two separate transactions, but treat both transactions as a whole as a delivery of goods.
As for IC acquisition in this case (installation of goods according to PL VAT law) –
According to Art. 12. 1. The movement of goods referred to in Art. 11 sec. 1 by or on behalf of a taxpayer of value added tax shall not be deemed to be an intra-Community acquisition of goods where:
1) the goods are installed or assembled, with or without a trial run, for which the place of delivery in accordance with Art. 22 sec. 1 pt. 2 is the territory of the country, if the goods are moved by or on behalf of the taxpayer making the delivery;
This would mean that in case the goods are installed IC acquisition does not have to be recognized if the goods are moved by or on behalf of the taxpayer making the delivery.
Regarding the sales –
According to Art. 17. 1. Taxpayers (who can account for VAT) also include legal entities, organizational units without legal personality and natural persons:
5) acquiring goods, if the following conditions are met:
a) the person supplying them in the territory of the country is a taxpayer who does not have a registered office or a permanent place of business in the territory of the country, and in the case of the supply of goods:…the taxpayer is not registered to VAT in accordance with Article 96 paragraph 4,
b) the purchaser is a PL entity.
This means that if the sales of goods in Poland is made by non-PL entity not registered to VAT in Poland and the purchaser is a PL entity, the seller does not have to register to VAT for this sales. Responsible for accounting of VAT in PL VAT return will be PL purchaser.
The above solution of non-registering to VAT in Poland is possible only if this is delivery of goods with installation according to PL law – so if the installation is not “simple actions/simple services enabling the assembled or installed goods to function in accordance with their intended purpose” as in this case there will be no IC acquisition in Poland (IC acquisition in Poland require VAT registration).
In case of import, registration to VAT is not a must as the Spanish company will be allowed to get the VAT refund through 8th Directive.
However, in case this will not be delivery of goods with installation according to PL law but delivery of goods and provision or simple actions/services, the Spanish company will have to register to PL VAT to declare IC acquisition of own goods. Being registered to VAT in Poland they will not be able to use art.17 sec.5 so they will have also to charge PL VAT.
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