VAT on import from China - how to settle?


Import from China involves VAT at customs clearance. The method of settling the transaction by the entrepreneur depends on where the clearance is made and the procedure selected. When should I pay and how to account for VAT when importing from China? The answer to this question is in the article below.

Standard settlement when checking in in Poland

If the customs clearance is carried out in a Polish port (e.g. in Gdańsk), according to the standard procedure, the entrepreneur is obliged to pay VAT immediately. It is indicated in the SAD or PZC customs document (electronic version). If the trader uses brokers for clearance, such as courier services, VAT is normally payable on delivery of the goods.

In the case of active VAT payers (and when a given purchase is related to taxable activity), the paid tax can be deducted in the submitted JPK_V7 file, hence it is finally recovered. However, it is imperative to have some money to start with. Hence, this type of settlement is mainly used for small deliveries, when the VAT amounts are not very high. In this case, VAT on import from China is settled in the same way as domestic purchase.

Import of goods - simplified procedure

It is possible to apply the option of "deferred" VAT payment, which is related to the so-called the simplified procedure in the import of goods.

By applying the principle of settling the import of goods under the simplified procedure, you can show the amount of VAT in the JPK_V7M (or JPK_V7K) file for the period in which the tax obligation arose (i.e. when the customs clearance took place in Poland).

In order to take advantage of this option, it is necessary to meet the conditions specified in the VAT Act. These are:

  • presentation by the taxpayer to the head of the customs and tax office, issued not earlier than 6 months before the import, certificates of no arrears in payments of due social security contributions and in payments of individual taxes constituting the income of the state budget, exceeding separately for each title, including separately for each tax, respectively 3% of the amount of due contributions and due tax liabilities in individual taxes; the share of arrears in the amount of contributions or tax is determined in relation to the amount of payments due for the settlement period to which the arrears concern and confirmation of registration of the taxpayer as an active VAT payer,

  • making customs declarations by a direct or indirect representative within the meaning of customs regulations

The requirement to submit the above certificates is also considered to be fulfilled in the case of submitting statements with the same content (that there is no arrears in the payment of taxes and ZUS). Statements are submitted under pain of criminal liability for making false statements. The person submitting the declaration is obliged to include the following clause in it: I am aware of the criminal liability for submitting a false declaration. It replaces the instruction of the authority on criminal liability for making false statements.

Before the beginning of the settlement period from which such settlement will be applied, it is necessary to prepare a written notification of the head of the customs office and the head of the tax office on the intention to settle the tax on import of goods in a simplified procedure.

The use of the simplified procedure is much more advantageous than the standard method, because VAT is paid only on the final date for submitting the JPK_V7 file.

If the taxpayer has not fully or partially settled the tax due on the simplified import of goods, he may correct the tax declaration within 4 months, counting from the month following the month in which the tax obligation for the import of these goods arose

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VAT on import from China - clearance in another EU country

A third option that continues to grow in popularity is customs clearance for imported goods in other EU countries, such as Hamburg, Germany.

In the case of clearance, e.g. in Germany, we no longer deal with the import of goods, but with the intra-Community acquisition of goods, because the goods pass through customs in the country they enter for the first time after crossing the EU borders. It is the German fiscal representative who performs the settlement and thus acts as the entity in the intra-community transaction.

For a Polish entrepreneur, this means the need to show the transaction in the VAT-EU summary information. Importantly, the tax obligation due to intra-Community acquisition of goods in this case occurs on the 15th day of the month following the delivery. Therefore, the settlement of the transaction should be presented for this period and the tax identification number of the fiscal representative should be indicated in the VAT-EU information.

This is a very beneficial option for entrepreneurs as the transaction is VAT neutral. VAT on import from China with clearance in Germany in this case is shown both on the sale and purchase side. The real necessity to pay the tax will occur only at the time of sale of a given product. In the case of larger deliveries, the option of clearance abroad (even with higher transport costs) may turn out to be advantageous due to the lack of the need to pay VAT on the purchase.

Therefore, the VAT tax on import from China depends on where the customs clearance takes place and, if in Poland, with which of the procedures. In the case of standard settlement with clearance in the territory of the country, the tax must be paid immediately upon receipt of the goods. In the case of the simplified procedure, the payment is postponed until the deadline for submitting the JPK_V7 file for a given period. However, when checking in in another EU country, when we are dealing with intra-Community acquisition of goods, the tax is actually paid only when selling the goods. Which of these options will be the best? It depends on the specific case and the scale of importing the goods.