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Import VAT accounting – time for new authorisations

By the end of April 2019, authorisations of simplified VAT accounting procedures issued before the entry into force of the Union Customs Code (UCC) will be re-assessed. The process of obtaining new authorisations will be more restrictive.

What is the simplified import VAT accounting procedure all about?

A taxpayer importing goods from outside the European Union is obliged to calculate and report the amount of VAT in their customs declaration. Then, after receiving the information about the amount of the customs debt, the taxpayer shall pay the indicated amount within 10 days. The output tax reported in the declaration can only be deducted in the tax return for the period in which the taxpayer received the customs declaration. The described process is a major logistic impediment for entrepreneurs.

In order to facilitate the activities related to the import of goods, there is a simplified procedure for import VAT accounting in place. According to Article 33a of the VAT Act and the customs regulations referred to in this act, in the case in which the goods are subject to simplification on the territory of the country, hence the taxpayer receives an authorisation of using the procedure “on site”, the import tax can be accounted for in the VAT return. What is more, taxpayers who apply the simplified procedure are not obliged to physically deliver the goods to the customs office. This procedure allows to save time, reduce transaction or storage costs, forms the basis for the exemption from payment of customs duties, permits quick access to imported goods and proves that the entrepreneur is a reliable customer.

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What conditions do you have to meet in order to use new authorisations?

As of 1 May 2019, the taxpayer may apply the simplified procedure, provided that they:

  • have an authorisation of simplified customs procedures;
  • have an AEO certificate, or
  • conduct imports via an intermediary who has such authorisations.

According to Article 250 of the Commission Delegated Regulation (EU) 2015/2446 of 28 July 2015, authorisations of simplified procedure, which were valid on 1 May 2016 and do not have a limited period of validity, shall be re-assessed. Pursuant to Article 345 par. 1 of the Commission Implementing Regulation (EU) 2015/2447 of 24 November 2015, this re-assessment is supposed be carried out by 1 May 2019.

How to prepare for the re-assessment of your authorisation?

The re-assessment consists in checking the authorisations that were issued before 1 May 2016 and did not have a limited period of validity. The entrepreneur must be advised in advance about the planned re-assessment. After the re-assessment of the authorisations, the customs authority withdraws the authorisation issued pursuant to the CCC, and then issues a new authorisation, provided that the entrepreneur meets all the preconditions for being issued the said authorisation defined in the UCC, obviously.

We would like to draw your attention to the fact that in the case of the AEO certificate, the new criteria set forth in the UCC must be verified in detail. Under the new regulations, entrepreneurs have additional obligations concerning the clarity of in-house processes and procedures as well as staff qualifications. Even though this pertains primarily to customs regulations, it affects the method of import VAT accounting.

In order to maintain the continuity of applying the simplified procedure, we recommend that you check if you still meet the preconditions for applying it. In the event of a negative assessment of the authorisation, we recommend applying for a new authorisation of simplified customs procedures or an AEO certificate, or starting cooperation with an intermediary (e.g. customs agency).

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Should you have any questions or need to discuss how the new authorisation affects import VAT accounting, we encourage you to contact our expert, Piotr LISS.

e-mail: ekspert@rsmpoland.pl

tel. +48 61 8515 766

fax +48 61 8515 786

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