Date of delivery of goods for VAT purposes

Due to the regulations that came into force in 2014, the tax obligation arises on the date of delivery of the goods. Entrepreneurs delivering goods with the participation of transport companies have many concerns regarding the determination of the moment of tax liability. Doubts arise when the date of delivery of the goods takes place - is it at the time of the release of the goods to the carrier or the actual delivery to the buyer? The tax authorities consider that this is basically the date on which the goods were released to the carrier.

Date of delivery - obligation in VAT

Pursuant to Art. 19a (1) of the VAT Act, the tax obligation arises upon the delivery of goods or the performance of a service. This is a general rule. The date of delivery for VAT purposes is the transfer of the right to dispose of the goods as the owner (Article 7 (1) of the VAT Act).Therefore, if the goods are delivered directly to the buyer, as a rule, the moment of the tax obligation will arise at the time of its release. It is different when the goods are sent, e.g. by courier or by post. There is a doubt here whether the date of delivery of the goods should be considered:

• the moment of handing over the goods to the carrier,

• the moment of delivery of the goods by the carrier to the buyer.

Attention! Individual ruling of 16 December 2014, no.IPTPP2 / 443-684 / 14-7 / JS of the Director of the Tax Chamber in Łódź, (...) the delivery of goods referred to in Art. 7 sec. 1 of the VAT Act is understood by the legislator as the transfer of the right to dispose of goods as an owner. The term "as owner" includes the possibility of considering the actual transfer of ownership of the thing as a delivery. Within the meaning of the Value Added Tax Act, "delivery" means any type of disposal of a good (sale, exchange, donation, and any other transaction that will lead to a similar economic result). (...) transfer of the right to dispose of the goods as the owner will take place when the goods are delivered to the carrier who is to deliver the goods to the buyer, as well as the fact that in the case of transport organized by the buyer, the risk of loss passes to the buyer when the goods are loaded onto the means of transport, it should be stated that when the goods are released to the entity, who is obliged to deliver it, the goods will be delivered within the meaning of Art. 7 sec. 1 of the act. Therefore, at this point, the tax obligation for the transaction in question will arise in accordance with Art. 19a paragraph. 1 of the act.

 

However, if the goods are to be delivered by the supplier's own transport to the place indicated by the contractor, the date of delivery of the goods is considered to be the delivery of the goods to the place indicated by the buyer. Therefore, the moment when the tax obligation arises arises in the actual delivery of the goods to the recipient.

The date of delivery in the provisions of the Civil Code

The determination of the date of delivery of the goods was also reflected in the provisions of the Civil Code. Often, tax authorities also refer to the Civil Code in their interpretations. In art. 544 § 1 (Journal of Laws of 2014, item 121, as amended), it is indicated that if the item sold is to be sent by the seller to a place that is not the place of performance, it is considered in case of doubt that the release has been made at the moment when, in order to deliver the goods to the place of destination, the seller entrusted it to the carrier engaged in the transport of this type of goods.

In the event that the parties to the contract do not agree on the details of the delivery of the goods, you should also refer to Art. 544 § 1 of the Civil Code. On the other hand, Art. 548 § 1 of the Civil Code indicates that the moment the sold item is handed over, the benefits and burdens associated with the item and the risk of accidental loss or damage to the item are transferred to the buyer.

In connection with the above, the release of the goods and entrusting them to the shipping company that is to deliver them to the buyer, transfers to him the right to dispose of the goods as the owner. Thus, the moment of delivery of the goods is treated as the date of delivery, and a tax obligation arises at that moment. Unless the parties to the transaction agreed otherwise in the contract.

Delivery included in the contract

It is possible that the seller and the buyer will conclude an agreement in which they will regulate the issue of the delivery of the goods, and therefore will determine the moment - the date of delivery, and therefore when the sale should be taxed. If the conditions are clearly defined, e.g. that the delivery takes place at the time of delivery and collection by the buyer, and not when the goods are handed over to the courier. The seller should keep an eye on the moment of delivery and have documents confirming the date of delivery.

It is also helpful when the buyer would not pick up the goods or when there is a risk of loss due to shipping. Then also the date of delivery should be considered to be handing over to the buyer. The seller will then avoid unnecessary corrections.

In the event that VAT is taxed at the time the goods are handed over to the courier and the delivery is ineffective and the order would be returned to the seller, or it would be damaged or lost - a correction should be made. Reducing the sale by this correction could be troublesome due to the fact that the contractor did not receive the goods or the invoice, so confirmation of receipt of the correction to the invoice, which does not exist, should not take place either.

As has been shown, the tax authorities are favorable to accepting the delivery date as the moment of transferring the right to dispose of the goods as an owner in accordance with Art. 7 (1) of the VAT Act in conjunction with Art. 544 § 1 of the Civil Code. However, this is not always correct and can only cause problems. The best solution is to regulate the delivery of the goods by drawing up a contract and setting its specific conditions. Yes, to show when is the date of delivery of the goods and therefore the moment of tax liability.