Intra-Community transactions from Poland

Case study

A taxpayer registered for intra-Community transactions sold goods to a Spanish contractor with a valid EU VAT number. This sales was documented an invoice and in accordance with the client’s request the goods were transported to the premises of another buyer in Spain. Can this sales be settled with 0% VAT rate

An intra-Community supply of goods is understood as the delivery of goods from the territory of Poland to the territory of another EU country in the performance of taxable activities (Article 13(1) of the VAT Act). However in such case, the buyer and the seller must meet the requirements set out in Art. 13 section 2 and section 6 of the VAT Act. The seller must be a registered, active VAT payer and the buyer must generally be a VAT taxpayer identified for the purposes of intra-Community transactions in the territory of an EU country other than Poland.

The country to which the goods are exported must be one of the EU countries other than the one from which the goods are sent. Therefore, if the goods are transported from Poland to Spain the intra-Community supply of goods takes place if the buyer and the seller are entities referred to in Art. 13 section 2 and section 6 of the VAT Act.

The conditions allowing the application of the 0% VAT rate in intra-Community supply of goods are listed in Art. 42 of the VAT Act. Pursuant to Art. 42 section 1 of this Act, ICT is subject to 0% VAT, provided that the taxpayer makes the delivery to the buyer who has a correct and valid EU tax number assigned by the EU country competent for the buyer, containing a two-letter code used for value added tax, which the buyer provided to the taxpayer and submits a tax declaration in which he shows this supply of goods as a registered EU VAT payer.

The 0% rate does not apply if:

1) the taxpayer did not submit summary information (EC sales list)

2) the submitted EC sales list does not contain correct data regarding intra-Community supply in accordance with the requirements referred to in Art. 100 paragraph 8 of the VAT Act

– unless the taxpayer duly explained the failure in writing to the head of the tax office.

Moreover, in order for a taxpayer to apply 0% VAT, before the deadline for submitting a VAT report for a given settlement period, they should have in their documentation evidence that the goods being the subject of delivery were exported from Poland and delivered to the buyer in the territory of another EU country.

If all the conditions have been met the intra-Community supply of goods in questions shall be settled with 0% VAT rate.

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