Senior Accounting Assistant at RSM Poland
When trading with European Union contractors, domestic entities are obliged to undergo some extra procedures. Before concluding their first intra-Community transactions, taxpayers are supposed to register as EU VAT payers. Therefore, they have to submit the VAT-R form or its sole actualisation in order to be granted the right to use a EU VAT number composed of their Tax Identification Number (Polish NIP) preceded with “PL” code.
Even if an entrepreneur is already registered as a UE VAT payer, still, it is not sufficient. The tax authorities have imposed on entities engaged in intra-Community trade an obligation to submit periodical statements concerning concluded intra-Community transactions, commonly known as EU VAT. And yet, are all transactions concluded between EU entities subject to the obligation of being included in the return? Well, not really.
Under Art. 100, par. 1 of the Goods and Services Tax Act taxpayers are obliged to submit to the tax office a summary of information concerning, in general:
- intra-Community supply of goods
- intra-Community acquisition of goods
- delivery of goods under the simplified triangular transaction procedure,
- provision of services to which only Art. 28b of the Act on VAT applies.
Thus, services whose place of provision is stipulated in Art. 28c-28n (e.g., property, transport of passengers and goods, catering and restaurant services) are not subject to the obligation of being recognised in the recapitulative statements and neither are those which are exempt from the value-added tax or taxed at 0% rate.
In Art. 100, par. 3-7 of the Goods and Services Tax Act, the taxpayers will find some additional information on the periods and deadlines for the submission of EU VAT returns. Recapitulative statements are submitted for monthly or quarterly periods to the 15th day of the month following the month of arising of the tax liability (in the case of returns submitted in hard copy) and to the 25th day of the following month when submitting information in electronic form. Is there any freedom of choosing the period for submitting the return? Ultimately, the performance of activities on a quarterly basis seems to be less aggravating for the taxpayer than remembering to perform an extra duty each month. Unfortunately, submitting EU VAT returns for quarterly periods is allowed only in strictly specified situations, namely when:
- the value of intra-Community supply of goods and triangular trade transactions, excluding the goods and services tax, does not exceed PLN 250,000, both in a given quarter and the four quarters preceding it,
- the value of intra-Community acquisition of goods does not exceed, in a given quarter, the amount of PLN 50,000,
- the taxpayer provides services taxed in the EU member state which is the home country of the purchaser.
The filling in of the recapitulative statements seems pretty easy, however, the taxpayer declaring intra-Community acquisition of goods should pay careful attention. It should be borne in mind that it is the duty of the service user to properly recognise all transactions which, under the provisions of the Goods and Services Tax Act, qualify as intra-Community transactions, regardless, e.g., of the accuracy of the recognition of the amount indicated on the invoice by the vendor (according to the individual interpretation of the Director of the Tax Chamber in Katowice of 16 December 2015, No. IBPP4 / 4512-236 / 15 / LG).
Draft recapitulative statements, attachments and adjustments have been specified in the Regulation of 17 June 2013 on recapitulative statements concerning intra-Community transactions (Journal of Laws 2013, item 724). The legislator has also included in it some detailed explanations on given items of the recapitulative statement.
Submission of EU VAT returns is mainly used for statistical and information purposes rather than for calculating charges payable to the tax office. However, failing to meet the deadline for submission of this form, under the Fiscal Penal Code, is subject to a fine, and the act itself is classified as a fiscal misdemeanour. Therefore, it is advisable to mind the deadline or to entrust the issue of intra-Community settlements to professionals who will ensure its timeliness and compliance with applicable regulations.