WNT settlement when the seller is a company from outside the EU
Intra-Community acquisition of goods, i.e. intra-Community acquisition of goods, is now a standard transaction in many larger enterprises - but how to proceed and settle it for tax purposes when it is made by a contractor from outside the EU?
WNT - general rules
Pursuant to the VAT Act, the intra-Community acquisition of goods for consideration in the territory of the country is subject to tax on goods and services. However, in order to talk about WNT, the following conditions must be met:
the taxpayer acquires the right to dispose of as owner the goods which, as a result of the delivery, are dispatched or transported in the territory of a Member State other than the territory of the Member State of departure or transport by the person delivering the goods, the buyer of the goods, or on their behalf;
both the seller and the buyer are taxpayers.
In such situations, the completed delivery of goods constitutes, respectively, intra-Community supply for the supplier and intra-Community acquisition of goods for the buyer, and it should be settled according to the methods provided for this type of transaction.
WNT - chain transactions
Chain transactions consist in the fact that several companies invoice, i.e. deliver the same goods, while physical delivery is made once - the first contractor in the chain transfers the goods to the last contractor.
The VAT Act provides for chain transactions:
Art. 22 sec. 2 of the VAT Act
“Where several entities deliver the same goods in such a way that the first of them hands over the goods directly to the last buyer in the order, and the goods are shipped or transported, the shipment or transport of the goods is assigned to only one delivery; if the goods are shipped or transported by the buyer who also delivers it, it is assumed that the shipment or transport is assigned to the delivery made for that buyer, unless the terms of delivery indicate that the shipment or transport of the goods should be assigned to his delivery. "
WNT - chain transactions - example
A Polish company bought the goods from a Norwegian company that issued an invoice for it, while the goods themselves were transported from France to Poland.
There are two ways to settle such a transaction, depending on the situation.
The company from France organized the transport, charged a fee for it, and it is this transaction that should be attributed to the delivery. Consequently - the buyer in this case is a company from Norway and it is with them in Poland that the transaction takes place WNT, and not at a Polish company, even though it was the company that finally picked up the goods.
In the case of a Polish company, there will also be a need for taxation, because it is a supply for which the buyer is the taxpayer. Such a transaction must be shown in the VAT return in items 32 and 33 and as these transactions are subject to a deduction of VAT, also in items 41 and 42 if the purchase concerns fixed assets, or otherwise in items 43 and 44.
Although the company from France arranged the transport, there may be an agreement between the company from France and Norway with the terms of delivery stating that the transport will be assigned to the delivery made by the company from Norway.
In such a situation, the acquisition of these goods will constitute WNTeven if the Norwegian company is not registered for EU-VAT in any of the EU countries. This transaction should then be shown in the VAT return in items 23 and 24 and since these transactions are subject to a deduction of VAT, also in items 41 and 42 if the purchase concerns fixed assets or in other cases in items 43 and 44. In addition, the buyer has this transaction the obligation to indicate in the VAT-EU information in part D, the fields concerning the country code and the VAT identification number of the counterparty are empty.