VAT tax (part 13) - special taxation procedures part II
Chapter XII of the VAT Act lists specific taxation procedures. These rules apply, inter alia, in relation to small entrepreneurs and flat-rate farmers and in the case of trading in investment gold, refund of travel tax, provision of electronic services in the EU to non-taxable persons, international occasional passenger transport services and intra-Community triangular transactions.
Investment gold and specific taxation procedures
Trading in investment gold is a special taxation procedure in accordance with the applicable European directives. In art. 121 paragraph 1 of the VAT Act, this concept has been thoroughly explained - according to this provision, investment gold should be understood as:
- gold in the form of bars or wafers with a fineness of at least 995 thousandths and gold represented by securities,
- gold coins meeting the following conditions:
- have a sample of at least 900 thousandths,
- were minted after 1800,
- they are or were valid legal tender in the country of origin
- they are sold at a price which does not exceed by more than 80% of the market value of the gold contained in the coin.
Importantly, this type of gold coins cannot be treated as collectibles with a numismatic value, which are described in the section on the margin procedure.
The supply, intra-Community acquisition and import of such gold, in accordance with Art. 122 sec. 1 of the VAT Act, is exempt from taxation with the tax on goods and services. On the other hand, the taxpayer may waive the exemption if:
- produces investment gold or converts gold of a different kind into investment gold and the supply is made to another taxpayer;
- within the scope of the enterprise he conducts, he supplies gold for industrial purposes, and the delivery concerns investment gold in the form of bars or wafers and is made by another taxpayer.
In the case of investment gold, one should not forget about the provisions specified in Art. 125 of the obligation to keep records that will enable the preparation of tax returns and summary information.
Travelers Tax Refund System
Tax Free, i.e. the system of tax refund for travelers, is a structure created to protect buyers in Poland from countries outside the European Union. Due to the fact that when importing goods to their country, they are obliged to pay tax on them, the necessity to tax them also in Poland would entail double taxation.
In terms of the tax refund system, travelers are understood to mean people living outside the territory of the Community - this is important as nationality is not what counts in this matter. In art. 126 paragraph 2 of the VAT Act, it is precisely indicated that the place of residence should be determined on the basis of a passport or, in the absence of a passport, on the basis of another document containing such data.
Refund of VAT to travelers is not allowed in every situation - it must be met with the appropriate conditions. First of all, the purchased goods should be taken, unused, directly outside the territory of the European Union, in the buyer's hand luggage. Secondly, it is important who the seller was in the transaction. Pursuant to Art. 127 sec. 1 and sec. 4 of the VAT Act, the seller should:
- be a VAT taxpayer,
- keep records of sales with the use of cash registers,
- conclude an agreement with an entity authorized to make a refund,
- inform the tax office in writing that they are sellers
- notify the tax office of the place where a traveler who purchases goods from them can collect the tax and with whom they have concluded tax refund agreements, and submit copies of these agreements,
- provide travelers with information about the possibility of obtaining a refund in four languages - German, English, Polish and Russian,
- mark the points of sale in a special way (regulated by a separate provision) with an information sign about the possibility of making a purchase, for which a refund is due.
Non-sellers can also return, but the procedures are much stricter in their case.
To obtain a tax refund, the traveler must - by the last day of the third month after the month in which the purchase was made - go to the customs office with a document issued by the seller. A cash register receipt should be attached to this print. The document will be endorsed by the customs officer by affixing a special stamp containing the numerator.
From August 1, 2017, a traveler may request a tax refund in a situation where the minimum total gross sales value, resulting from the document issued by the seller, is PLN 200. This limitation applies to purchases made after August 1, 2017 with the entry into force of the Regulation of the Minister of Development and Finance on the minimum total value of purchases at which the traveler may claim a VAT refund.
Foreign entities that provide electronic services within the EU to non-taxable persons
As a rule, services provided by an entrepreneur from outside the European Union should be taxed at the place of residence or seat of their supplier. However, in the case of electronic services provided to non-VAT EU citizens, a special procedure for VAT taxation applies.
Pursuant to Art. 131 of the VAT Act, foreign entities in this special taxation procedure should be understood as such legal persons, organizational units without legal personality and natural persons without a registered office or a permanent place of conducting business activity in the territory of the European Union, who perform activities subject to VAT in the territory of the Community and have not registered their activities on its territory, so they are not required to be identified for VAT purposes in the territory of a Member State.
In order to benefit from the special taxation procedure, the above entities should provide electronic services to EU contractors who are not VAT payers. The intention to use this option should be reported electronically to the tax authority of the EU country - in the case of Poland, to the head of the second tax office. Pursuant to Art. 133 sec. 1 and 2 of the VAT Act, a foreign entrepreneur will be required to submit - also electronically - VAT declarations on a quarterly basis by the 20th day of the month following each subsequent quarter. Pursuant to Art. 133 sec. 5 of the VAT Act, the amounts in the VAT return should be expressed in euro.
Entities that use the special VAT settlement procedure are required to keep electronic records of transactions covered by this procedure. Pursuant to Art. 134 sec. 3, these records must be kept for a period of 10 years from the end of the year in which telecommunications, broadcasting or electronic services were provided.
International occasional passenger transport
Another special procedure is addressed to residents of the European Union, who are not active VAT payers, and who occasionally transport passengers by road by buses registered within the territory of the Union to another Member State. It consists in simplifications used during registration and VAT settlement.
In order to be able to use a special procedure, the taxpayer is obliged to submit the VAP-R form to the competent tax office - in Poland, as in the case of the above-mentioned special procedure for certain electronic services, this is the Second Tax Office Warszawa-Śródmieście. After completing the formalities, the taxpayer receives a tax identification number that should be used when settling the transport.
However, settlements should be made using quarterly declarations, which must include:
- tax identification number,
- the registration number of the bus, the number of passengers and the net value of the services provided by this bus in the territory of the country,
- total value of services provided in the territory of the country, excluding tax, being the taxable amount,
- tax rate,
- the total amount of tax payable at the tax office.
Pursuant to Art. 134b paragraph. 1. of the VAT Act, declarations should be submitted electronically by the 25th day of the month following the quarter in which the tax obligation arose. In addition, the amounts in the declaration must be expressed in Polish zlotys.
Intra-Community tripartite transactions
The special taxation procedure provided for intra-Community triangular transactions is the last one, contained in section XII of the VAT Act. For it to be applied, the following conditions should be met:
- the transaction involves three different VAT payers, each of which is registered in a different Member State,
- each taxpayer is registered for intra-community transactions,
- the delivery relates to the same goods, issued by the first participant directly to the last in order, with the transaction first between the first and the second, then the second and third participants,
- the goods are shipped or transported by or on behalf of the first or second taxpayer,
- transport takes place from the territory of one Member State to another within the territory of the Community.
The simplified procedure means that the obligation to settle the tax on goods and services will rest with the final recipient of the goods. Therefore, the second taxpayer will not have to charge tax on intra-Community acquisition of goods. However, it should be remembered that the exemption from taxation does not apply to the need to complete other formalities - e.g. submitting information on EU transactions.