Obligations arising from the purchase of software over the Internet


The Internet has become so popular that many people cannot function without it. News, music and movies, recipes, legal and tax advice and, above all, shopping without leaving your home - these are just some of the examples of everyday use of the Internet. Thanks to such a rapid development of this communication network, many companies have a chance to reach recipients from the other side of the world. Purchasing software from Ireland or the USA is not a problem. It only takes a few clicks and payment and the required software is ours. However, if purchased by a company, additional tax obligations arise that every entrepreneur should be aware of.

Correct purchase classification

Computer software is less and less often purchased in boxed form. This is because it is connected with waiting for the shipment, which in the case of purchases from third countries - also waiting for customs clearance. More often the software can be downloaded from the seller's website and this means that the given transaction should be classified as a service.

Provision of software and its updates has been highlighted in Annex II of Directive 2006/112 / EC on the common system of value added tax. These are services provided electronically. There is also an implementing regulation of the EU Council No. 282/2011 to the above directive, in which in art. 7 explains what essentially electronic services are. These include services provided via the Internet or an electronic network, the provision of which, due to their nature, is essentially automated and requires minimal human intervention, and which cannot be performed without the use of information technology. The above description includes in particular, in general, the delivery of products in digital form, including software, its modifications or newer versions.

In the case of electronic services, the VAT Act includes a special provision regarding the obligation to settle the tax, but it applies to sales to natural persons who are not VAT taxpayers.

Or maybe importing services?

Purchase of the software in the form of its download from the seller's website will constitute an import of services for the VAT payer. If the seller is a company from one of the EU countries (e.g. Ireland), please refer to Art. 28b of the VAT Act. This involves the necessity to charge VAT, taking into account the national tax rate appropriate for this type of service. In the case of an active VAT payer, the transaction will be neutral. It is shown both on the purchase and sale side. Thus, the entrepreneur does not bear the burden of tax.

Formal requirements

The transaction of importing services from the taxpayer from the EU results in the obligation to register for VAT-EU, i.e. intra-community transactions. This involves the need to submit a VAT-R form to the tax office. There, particular attention should be paid to Part C.3. On the day of registration, in intra-Community transactions, the entrepreneur will be able to use the NIP-UE number, ie with the prefix "PL".

In the next step, VAT should be settled. According to the current regulations, internal invoices are used for this purpose. The printed document should be fastened and stored together with the source invoice in the accounting documentation. The service import transaction must be shown on the VAT-7 declaration (or VAT-7K for quarterly settlements). This is done on the sales side of fields 27-30 (Import of services, for which Article 28b of the VAT Act applies), and on the purchase side, fields 41-42 (Purchase of other goods and services). Importantly, these values ​​are not shown in the VAT-EU summary information, as it does not cover the import of services.

If the software was purchased from a contractor outside the European Union (e.g. from the USA), you only need to prepare an internal invoice with tax calculation. There are no additional registration obligations. The value of the transaction is shown in the VAT declaration in fields 27-28 and 41-42.

You should also take into account the date when the tax settlement should be made. This must be the period during which the purchase was actually made. If the invoice shows August 30 as the date of sale, and the issue date is September 2, the import of services should be included in the settlement for the month of August.

In the first step, the entrepreneur is obliged to determine whether the purchase is an import of services or a purchase of goods (WNT or import). Regardless of the case, the tax regulations contain quite detailed instructions regarding the taxpayer's obligations towards VAT. Thanks to this, he should not have any major problems with the correct settlement.