Service-Tax

VAT 2014 (part 1) - VAT tax obligation 2014 part II

In connection with the implementation of the provisions resulting from the amendment to the VAT Act, it should be remembered that currently, in accordance with the general rules, the tax obligation arises upon the delivery of goods or the performance of a service. However, the Act provides for exceptions from the general rules. Some of them have already been described in Part 1, others will be cited below.

Electricity supply, telecommunications services, utilities, rental and leasing services

In the group of activities for which the tax point arises as at the date of issuing the invoice, the following were distinguished:

supply of electricity, heat or cooling as well as line gas,

and services:

telecommunications and radiocommunication,
rental, lease, leasing or services of a similar nature,
protection of persons and services of security, supervision and storage of property,
permanent legal and office services,
distribution of electricity, heat or cooling as well as line gas,
related to the treatment and supply of water through water supply networks (36.00.20.0),
related to trade in water supplied via water networks (36.00.30.0),
related to sewage disposal and treatment (ex 37),
related to the collection of recyclable non-hazardous waste (38.11.1),
related to the collection of non-hazardous waste that cannot be recycled (38.11.2),
related to infrastructure intended for the shipment of non-hazardous waste (38.11.6),
related to the collection of hazardous waste (38.12.1),
related to infrastructure intended for the shipment of hazardous waste suitable for recycling (38.12.30.0),
related to the treatment of non-hazardous waste for final disposal (38.21.10.0),
related to the disposal of non-hazardous waste (38.21.2),
related to the treatment of other hazardous waste (38.22.19.0),
related to the neutralization of radioactive waste and other hazardous waste, with the exception of waste management services, radioactive (reprocessing of fuels and waste) (PKWiU ex 38.22.21.0)
related to decontamination and cleaning (39.00.1),
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other related to remediation and specialized pollution control services (39.00.2),
garbage sweeping and snow removal (81.29.12.0),
other sanitary (81.29.13.0).

Therefore, the tax obligation for the above-mentioned activities arises at the time of issuing the invoice (in this case, it is issued no later than the payment deadline), and not, as in the case of general rules - at the time of the service. There is, however, an exception.

When the taxpayer has not issued the invoice or has issued it late, the tax obligation arises upon the expiry of the payment deadline (Article 19a (7)).

Example 1.

An entrepreneur rents a kiosk to another entrepreneur. The lease agreement states that the due date is the 20th of the month. The entrepreneur for March issued an invoice on March 15.

The landlord's tax obligation will arise:

March 15, as an invoice has been issued for that day.

Example 2.

As part of the business, the entrepreneur rents a flat. The lease agreement states that the payment date falls on the 10th of each month from the previous month. On March 8, the landlord paid the amount due. The landlord issued an invoice on March 10.

The landlord's tax obligation will arise:

March 10, as pursuant to Art. 19a paragraph. 8, these services constitute an exception for which the receipt of all or part of the payment before the tax obligation arises does not give rise to a tax obligation.

Example 3.

As part of the business, the entrepreneur rents a warehouse in February. The lease agreement stipulates that the payment date falls on the 10th of each month from the previous month. The entrepreneur issued an invoice for February 15th March.

The landlord's tax obligation will arise:

On March 10, as the payment deadline expired on that date, the taxpayer was required to issue an invoice on that date.

The special moment when the tax obligation arises will not apply when the above-mentioned services (telecommunications, lease, permanent legal services) constitute the import of services, to which the principles of art. 28b of the VAT Act.

After the amendments to the provisions of the VAT Act in 2014, there is still a group of activities for which the tax obligation is closely related to the date of issuing the invoice.

Tax obligation in transport services

Following the judgment of the Court of Justice of the European Union, transport services lost the status of services for which a special tax point was established. In 2014, the general tax point applies to transport services. Therefore, revenue for VAT purposes is generally recognized at the time the service is provided.

Import of goods

Different procedures are provided for the import of goods from third countries, and different for purchases made on the basis of intra-Community acquisition of goods.

Import of goods from third countries

The tax obligation arises on the basis of the same principles as before - upon the creation of a customs debt, which results directly from Art. 19a paragraph 9.

On the other hand, when a customs debt arises, Art. 201-216 of the Community Customs Code:

Art. 201 sec. 1 and 2

1. A customs debt on importation is incurred as a result of:

(a) the release for free circulation of goods subject to import duties

(b) placing such goods under the temporary admission procedure with partial relief from import duties.

2. The customs debt shall be incurred at the time of acceptance of the customs declaration.

However, the exceptions referred to in the Act should be taken into account:

in the case of placing the goods under the customs procedure of processing under customs control, the tax obligation for the import of goods arises when the goods are placed under this procedure,
in the case of placing the goods under the customs procedure of: customs warehouse, temporary admission with total relief from import duties, inward processing under the suspension system, transit or customs-approved treatment or use - entering the goods into a free zone or free warehouse, if levies are levied on these goods or fees of a similar nature - the tax obligation in respect of the import of goods arises upon the payment of these fees.

WNT

The VAT Act specifies in detail the moment when the tax obligation arises in the case of intra-Community acquisition of goods.

Art. 20 sec. 5

In the intra-Community acquisition of goods, the tax obligation arises upon the issuance of the invoice by the taxpayer of value added tax, but not later than on the 15th day of the month following the month in which the goods being the subject of the intra-Community acquisition were made (...).

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Since the buyer is the taxpayer in the intra-Community acquisition of goods, it is extremely important to present the transaction on the date on which the tax obligation arose in accordance with the regulations. An entrepreneur importing goods from EU countries should pay particular attention to:

the date of issue of the invoice received from a foreign contractor,
the date of delivery and the period by which the 15th day of the month following the month of delivery of the goods expires.

Example 1.

An active VAT payer registered for VAT-EU purposes purchased the goods from a contractor from Germany. The goods were received on January 27, 2014. One week after receiving the goods, the supplier sent an invoice with the issue date on 01/02/2014.

The tax obligation on account of VAT at the buyer of the goods arose at the time of issuing the invoice, i.e. on 01/02/2014.

Example 2.

Goods purchased from a UK supplier. The delivery took place on January 23, 2014. The seller delayed the issue of the invoice. Consequently, the invoice was received by the buyer on March 15 with the issue date on February 28, 2014.

The tax obligation for VAT at the buyer of the goods arose on February 15, 2014, as the statutory deadline expires on this day, i.e. the 15th day of the month following the month in which the goods being the subject of intra-Community acquisition were delivered.

Sale of goods abroad

Different regulations will apply to determining the moment when a tax obligation arises in the case of sales to contractors from third countries, and different in the case of deliveries of goods to contractors from the EU.

We encourage you to read the next parts of the cycle: