VAT tax (part 5) - The moment when the tax obligation arises

General rules

As a rule, the tax obligation arises when the goods are released or the service is provided, in accordance with Art. 19 paragraph 1 of the VAT Act. This is a classic approach where the taxpayer is not required to issue an invoice.

However, when he is obliged to issue an invoice, because he sells to an entity conducting business activity, the tax obligation arises upon issuing the invoice, but not later than on the 7th day from the delivery of the goods or the performance of the service.

The situation is similar in the case of receiving a down payment, advance payment or prepayment. Then, the tax obligation under VAT arises on the date of receipt of part or all of the payment.

Media

The issue of the tax obligation under VAT in the case of invoices for utilities is regulated by Art. 19 paragraph 13 points 1 of the Act, which clearly indicates that it arises upon the expiry of the payment deadline specified in the contract (on the invoice).

The tax obligation arises upon the expiry of the payment deadline, if it has been specified in the agreement applicable to settlements in respect of:

a) supply of electricity, heat or cooling as well as line gas,
b) providing telecommunications and radiocommunication services, subject to sec. 18,
c) the provision of services listed in item 140-153, 174 and 175 of Annex 3 to the Act.

Example.

Energy invoice dated June 18, payment date indicated on the invoice on July 9. The amount owed to the energy supplier was settled on July 1. When does the tax obligation arise? The tax obligation arises on July 9, according to the date indicated on the invoice.

Delivery of premises and buildings

In the case of delivery of goods, the subject of which are premises and buildings, the tax obligation arises upon receipt of all or part of the payment, but not later than on the 30th day from the date of their release.

Transport and construction services

These issues are regulated by Art. 19 paragraph 13 points 2 of the VAT Act, which says that the tax obligation arises upon receipt of all or part of the payment, but not later than on the 30th day from the date of service provision:

• transport of people and cargo by rail, car fleet, sea-going ships, inland and coastal water transport means, ferries, airplanes and helicopters,
• forwarding and reloading,
• in sea and commercial ports,
• construction or construction-assembly.

Example 1.

The entrepreneur issued an invoice for the transport service he performed on May 6, the date of sale (service performance) on May 5, the payment for the invoice was settled on June 26. When does the tax obligation arise? In this case, the tax obligation arises on June 4th - 30th day from the date of service provision.

Example. 2.

Company Y issued an invoice for the construction service it performed on May 8, the date of sale (service performance) on May 7, and the payment for the invoice was settled on May 20. When does the tax obligation arise? In this case, the tax obligation arises on May 20 - the day of receiving the payment.

According to Art. 19 paragraph 15 of the VAT Act, in the case of construction and transport services, the receipt of a part of the payment (price) or a part of the construction and housing contribution results in a tax obligation in this part.

Example 3.

Company X issued an invoice for construction services performed on May 5 for the amount of PLN 15,000. Invoice date May 6. Part of the receivables - PLN 8,000 - was paid on May 25, the remaining PLN 7,000 was settled by the contractor on June 30. When does the tax obligation arise?

The tax obligation arises on May 25 (PLN 8,000), for the remaining part (PLN 7,000), the tax obligation arises on the basis of VAT on June 4 (30 day after the service was provided).

Rent, lease, leasing

Regulations in this regard can be found in Art. 19 paragraph 13 point 4 of the Value Added Tax Act, which says that the tax obligation in the case of the provision of rental services, lease, leasing or services of a similar nature arises upon receipt of all or part of the payment, but not later than upon the expiry of the payment deadline specified in contract or invoice.

Here, as in the case of construction and transport services, the receipt of a part of the payment or part of the construction and housing contribution results in a tax obligation in this part.

Mail order sale, cash on delivery

In the case of mail order sales with cash on delivery, the tax obligation arises upon receipt of payment. This is one of the special moments when a tax obligation arises under VAT, which raises a lot of controversy and doubts among entrepreneurs. This type of service does not have to be provided by Poczta Polska, it can be performed de facto by any courier company that allows shipment of goods on delivery. Then the tax obligation arises when the payment is received on the seller's account, and not as it might seem when the customer transfers the money to the postman or courier.

Small taxpayers using the "cash method"

According to the regulations, the Small Taxpayer who settles the so-called "Cash method" selling to entities that are not active VAT taxpayers, the tax obligation arises on the date of receipt of all or part of the payment, not later than 180 days from the date of delivery of the goods or performance of the service.

However, in the case of sales to a taxpayer registered as an active VAT payer, the tax obligation arises on the date of receipt of all or part of the payment.

Important!!!

Both in the case of sales to entities that are not active VAT payers and registered as active VAT payers, in accordance with Art. 21 of the Act, the receipt of a partial tax liability results in a tax obligation in this part.