Chain transactions, 0% rate for intra-Community deliveries.

New rules for intra-Community transactions as from July 1, 2020

On the 28th of May lower house of the Polish parliament adopted the act introducing changes in the rules for intra-Community transactions. The new provisions concern the call-off stock procedure, the rules for determining which transaction is movable within the supply chain and the conditions for using the 0% rate for intra-Community delivery.

The amendments are to apply from July 1, 2020. The obligation to introduce changes was imposed on the Polish legislator by the EU Council Directive 2018/1910 of December 4, 2018 amending Directive 2006/112 / EC. These changes should have been introduced in January but Poland did not implement them on time. Despite this a country which has failed to fulfil its obligations cannot deprive the taxpayer of the possibility of invoking the directive directly. Therefore, until the amended regulations enter into force in Poland, taxpayers may apply the existing ones resulting from the VAT Act or the Directive. Regardless of whether the taxpayer decides to apply the provisions of the Directive 2018/1910 or the Polish VAT Act, he should do so consistently in all aspects related to the settlement of VAT of a given transaction.

Amendments are also introduced by Implementing Regulation 282/2011 of 15 March 2011 laying down implementing measures for Directive 2006/112 / EC on the common system of value added tax. The changes concern the evidence confirming the right to apply the 0% rate at intra-Community transactions. This regulation is directly applicable in all Member States so it does not require implementation into the national VAT Act.

Call-off stock – until the end of 2019, the procedure for call-off stock was not directly regulated in the VAT Directive. Under the new rules, movement of own goods to another Member State under a call-off stock procedure is not considered to be an IC delivery or acquisition at the time the goods are delivered to the warehouse. After 12 months the IC transaction should be settled if the goods are not delivered or dispatched from the warehouse.

Chain transactions – when the transport is organized by an intermediary and is carried out between EU countries, the shipment or transport of these goods will be assigned only to the delivery made to the intermediary. However, when an intermediary informs its supplier about its EU VAT number assigned by the Member State from which the goods are dispatched or transported, the shipment or transport will be assigned to the delivery made by the intermediary.

0% rate for intra-Community deliveries – the application of the 0% rate by the supplier will additionally require the buyer to provide his EU VAT number and submission of correct EC sales list. At present, submission of EC sales list is only a formal condition.

From January 1, 2020, the EU Council Implementing Regulation for the purpose of applying the 0% rate introduces regulations indicating ways of documenting the fact of transporting goods from one EU country to another in order to assume the presumption that the goods have been delivered.These new regulations regarding documentation are however not obligatory. It is up to the taxpayer to apply them. The Ministry of Finance confirmed it: Failure to meet the conditions introduced in the abovementioned the regulation does not mean that the 0% rate will not apply. In this situation, the supplier will have to prove otherwise, in accordance with the existing provisions of the VAT Act, that the conditions for applying the 0% rate have been met.