Tax obligation when importing services and exporting goods in 2014

The wording of the act on tax on goods and services will be amended, inter alia, some regulations apply to the settlement of foreign transactions, including the import of services and the export of goods.

Tax obligation on import of services in 2013

According to the regulations in force until the end of 2013, in the case of importing services, the tax obligation arises in accordance with Art. 19 paragraph 19 of the VAT Act, i.e. as a rule at the time of service provision. However, in a situation where this transaction should be documented with an invoice, the tax obligation arises upon its issue, but not later than on the 7th day from the date of the service. When making a prepayment, the tax obligation arises at the moment of making the advance payment.

Tax obligation in the import of services regulated by art. 28b in 2013

Pursuant to Art. 19 paragraph 19a of the VAT Act, the tax obligation in the case of import of services, to which art. 28B, the tax obligation arises when the services are provided, except that:

• services for which, in connection with their provision, consecutive payment or settlement dates are established, are deemed to have been performed at the end of each period to which these settlements or payments relate, until the completion of the provision of these services,

• services provided in a continuous manner for a period longer than one year, for which, in connection with their provision, in a given year, settlement or payment deadlines do not expire, are considered to be performed at the end of each tax year, until the completion of the provision of these services.

In a situation where the taxpayer receives part of the receivable before the service is performed, then the tax obligation under VAT arises in this part (Article 19 (11) of the Act).

Tax obligation on the export of goods in 2013

The moment when the tax obligation arises for the export of goods by the end of 2013 is the same as for the domestic delivery of goods. So, according to Art. 19 paragraph 1, the tax obligation arises in this situation upon the release of the goods. However, when the delivery of the goods should be confirmed by an invoice, the tax obligation arises upon the issue of this document, but not later than on the 7th day from the date of delivery of the goods (Article 19 (4)).

Importantly, if, after receiving the advance payment for the export of goods, the export of these goods takes place within 6 months from the date of receipt of a part of the receivable, the advance payment is subject to 0% taxation and the tax obligation arises upon its receipt.

Import of services and export of goods after the changes in 2014

The amendment to the provisions of the VAT Act with the beginning of 2014 will result in the fact that the tax obligation will arise in accordance with the newly added art. 19a.

In the case of the import of services and the export of goods, the general rule will apply, according to which the tax obligation will arise upon the delivery of the goods or the performance of the service.

The taxpayer importing services should also pay special attention to the regulations concerning partial acceptance of the service and continuous services (Article 19a (2) and (3) of the Act).

The service is also considered performed in the case of its part, for which the payment has been determined. On the other hand, a service for which, in connection with its provision, consecutive payment or settlement dates are established, shall be deemed to have been performed at the end of each period to which these payments or settlements relate, until the provision of this service is completed. If the service is provided in a continuous manner for a period longer than one year, and there are no payment or settlement deadlines specified in a given year, it is deemed to have been performed at the end of each tax year until the provision of this service is completed.

One should also remember about the provisions of Art. 19a paragraph. 8 of the Act, according to which the tax obligation arises upon receipt of the prepayment.