Purchase of goods at auction - how to properly document?
Entrepreneurs often have the opportunity to purchase goods or materials at online auctions at bargain prices. In the case of purchase from business entities, there is no problem with documenting the transaction - the seller issues an invoice or bill, on the basis of which the buyer may qualify as tax costs. Difficulties in documenting arise when goods are purchased from natural persons who do not conduct business activity. Check the article on how to properly document the purchase of goods at auction!
Purchase of goods at auction from a private person
When making a purchase from a natural person not conducting business activity, the entrepreneur should remember to document it with a purchase and sale contract. In this situation, it is the basic and practically the only proof of sale recognized by the tax authorities. What to do if the contractor does not want to issue it? What document should be prepared to include such a purchase of goods in costs?
The catalog of accounting documents on the basis of which the taxpayer may recognize costs in the tax revenue and expense ledger is specified in par. 12-14 of the Regulation on maintaining the KPiR.
According to their content, the basis for entries in the book are such accounting vouchers as:
- invoices, VAT RR invoices, bills and customs documents,
- documents related to the so-called cost adjustment,
- other evidence (listed in § 13 and 14) confirming the fact that a business transaction was carried out in accordance with its actual course and containing at least:
- reliable identification of the issuer or indication of the parties (name and addresses) participating in the business operation to which the proof relates,
- the date of issue of the proof and the date or period of the economic operation to which the proof relates, provided that if the date of the economic transaction corresponds to the date of issue of the proof, it is sufficient to indicate a single date,
- the object of the economic operation and its value as well as its quantification, if the object of the operation is measurable in natural units,
- signatures of persons authorized to properly document business operations
- marked with a number or in another way that allows linking the proof with accounting entries made on its basis.
Par. 13 of the regulation indicates that the accounting vouchers are:
- daily statements of evidence (sales invoices) prepared for posting with a collective entry;
- accounting notes, drawn up to correct the entry on a business transaction, resulting from a foreign or own ID, received from the taxpayer's contractor or provided to the contractor;
- evidence of shifts;
- proofs of postage and bank charges;
- other evidence of fees, including those made on the basis of payment books, and other documents - if they contain the data required for other evidence (specified above).
In turn, par. 14 of the regulation indicates a strictly defined catalog of events in which the taxpayer may issue internal evidence in order to document the entries (e.g. court and notary fees, purchase of auxiliary materials in retail units, stamp duties).
Purchase of goods at auction from a private person - the position of the tax authorities
The issue of documenting the purchase of goods at auction raised and still raises many doubts among taxpayers. Therefore, the tax authorities issued several important interpretations on this subject. Interestingly, this issue was also addressed by the Undersecretary of State from the Ministry of Finance in question 8337 in 2012, in which it was stated:
“(...) the prerequisite for including a specific expense as tax deductible costs is the demonstration of a causal relationship between the cost incurred and the income earned, or the preservation or securing of the source of income. Therefore, each assessment of the expenses incurred by the taxpayer requires an individual analysis.
It does not follow from (...) the regulation that only a contract signed by both parties is accepted as a proof of incurring an expenditure (cost). In the case of purchases at online auctions by an entrepreneur obliged to keep a tax book of revenues and expenses, the expenditure may be documented - depending on the legal and tax situation of the contractors of the transaction - by a VAT invoice, bill, as well as other accounting evidence containing the data referred to in § 12 sec. . 3 point 2 of the regulation on keeping the tax book of revenues and expenses. "
On the basis of the above, it should be stated that de facto each document containing the data specified in par. 12 sec. 3 point 2 of the regulation may be the basis for recognizing the cost in the KPiR.
Importantly, the auction printout or the transfer order alone will not be sufficient here, which was emphasized in the individual interpretation with reference number ILPB1 / 415-37 / 13-2 / AA of 25 March 2013 issued by the Director of the Tax Chamber in Poznań:
“Considering the above legal regulations, it should be stated that the document constituting the basis for recognizing economic operations in the tax revenue and expense ledger should, as a rule, be an invoice or a bill referred to in § 12 sec. 3 point 1 of the regulation on keeping the tax book of revenues and expenses. However, in accordance with the above-mentioned § 12 clause 3 point 2 of the above-mentioned regulation, the basis for the entries may also be other evidence confirming the fact of economic operations, including, inter alia, signatures of persons authorized to properly document business operations.
Due to the above, a printed document that confirms the conclusion of the transaction, but does not contain the signatures of persons authorized to properly document business operations, does not meet the requirements set out in the above-mentioned regulation and cannot constitute an accounting document that is the basis for recording the cost in the tax revenue and expense ledger.
To sum up, due to the fact that the document referred to in the application does not contain all the elements contained in the regulation on keeping a tax book of revenues and expenses, necessary to recognize it as accounting evidence, i.e. signatures of persons authorized to properly document a business operation, no may constitute the basis for including the incurred expenditure as tax deductible costs (...) ”.