Intra-Community acquisition of goods (WNT) - new settlement rules
When purchasing goods from entrepreneurs from the European Union, the buyer may be required to charge VAT. If the transaction meets the definition of intra-Community acquisition of goods (intra-Community acquisition of goods), the buyer is obliged to report the output VAT. At the same time, it may also have the right to deduct it, but here the conditions specified in the act must already be met. The simplification package under Slim VAT 2 introduced some amenities for entrepreneurs. Let's check how to settle the intra-Community acquisition of goods after the changes!
Intra-community acquisition of goods (WNT) - definition
The issue of intra-Community acquisition of goods, i.e. intra-Community acquisition of goods, is described in art. 9 sec. 1 of the VAT Act. Here is the definition of a transaction contained in the aforementioned legal act:
Art. 9 sec. 1 of the Value Added Tax Act:
Through the intra-Community acquisition of goods referred to in article 2. 5 sec. 1 point 4, it shall be understood as the acquisition of the right to dispose of the goods as the owner, which, as a result of the delivery, are sent or transported to the territory of a Member State other than the territory of the Member State of commencement of shipment or transport by the person who supplies the goods, the buyer of the goods or on their behalf.
This means that the intra-Community acquisition of goods takes place when the goods have been transported from one EU country to another.
Every active VAT payer who purchases goods from another EU country deals with the intra-Community acquisition of goods. In the case of non-VAT taxpayers, the exemption from the settlement of intra-Community acquisition of goods, referred to in Art. 10 sec. 1 point 2 of the VAT Act. If the total value of purchased goods from another EU country transported to Poland for the benefit of a VAT-exempt taxpayer did not exceed PLN 50,000 during the tax year, he may settle the transaction as an ordinary domestic transaction, i.e. without VAT settlement.
In addition to the transaction limit, a taxpayer exempt from VAT cannot register for VAT-UE and cannot use the NIP number with the prefix "PL". In the case of intra-Community acquisition of goods, entrepreneurs are required to register for VAT-EU. For this purpose, they submit to the tax office the VAT-R form with part C filled in. 3. The exception is VAT-exempt taxpayers who benefit from the exemption from the settlement of intra-Community acquisition of goods due to the transaction limit - these are not required to register for VAT-EU. Non-VAT users may, on the other hand, voluntarily opt out of this exemption and voluntarily register for VAT-EU by settling the intra-Community acquisition of goods. In the case of intra-Community acquisition of goods transactions, it is obligatory to submit VAT-EU registration information, if the registration for VAT-EU took place.
WNT and tax obligation
Pursuant to Art. 20 paragraph5 of the VAT Act, the tax obligation for intra-community acquisition transactions arises when the taxpayer issues an invoice - but not later than on the 15th day of the month following the month of delivery of the goods - the subject of intra-Community acquisition.
Mr. Jan, who runs a grocery store, purchased goods from a company from Germany. On April 20, 2021, goods were delivered from Germany. The invoice was not issued until May 10, 2021. When did the VAT obligation arise in connection with the concluded WNT transaction?
As a rule, in the case of intra-Community acquisition of goods, the VAT obligation arises on the date of issuing the invoice, not later than on the 15th day of the month following the month of delivery of the goods, so in this case the VAT obligation arose on May 10, 2021.
Mrs. Anna, who runs a shop with cosmetic accessories, purchased goods from a company from the Czech Republic. On April 2, 2021, the delivery of goods from the Czech Republic took place. The invoice was not issued until May 20, 2021. When did the VAT obligation arise?
Due to the fact that the invoice was issued after the 15th day of the month following the month in which the delivery of goods took place, the tax obligation arose not on the date of issue, but on May 15, 2021. Receipt of an advance invoice prior to the delivery of goods under intra-Community acquisition of goods, even if it concerns 100% of the order value, does not result in VAT liability. The confirmation of the above procedure is the individual interpretation issued by the Director of the Tax Chamber in Warsaw on May 14, 2015, ref. No. IPPP3 / 4512-166 / 15-2 / JF, where we read that "[...] with regard to advances, it should be noted that the legislator does not associate the emergence of a tax obligation with the payment or receipt of an advance payment for intra-Community acquisition of goods. Also, the tax obligation does not arise in connection with the issue or receipt of an invoice documenting an advance payment for an intra-Community supply, even if he receives an advance invoice for the full value of the goods from the VAT taxpayer ".
Intra-community tax and VAT deduction - changes introduced by SLIM VAT 2
Art. 86 sec. 2 point 4 lit. c of the VAT Act stipulates that the amount of input tax is the amount of tax due on account of intra-Community acquisition of goods referred to in the aforementioned art. 9. As a rule, the taxpayer reports input VAT in the same period as output VAT. Thanks to this, the transaction is neutral for him in terms of VAT. The condition for this is that the invoice is received before the expiry of the three-month period, counting from the end of the month in which the tax obligation relating to the purchased goods arose.
Legal status before SLIM VAT 2
Before September 7, 2021, i.e. before the introduction of changes to SLIM VAT 2, the lack of an invoice meant that the entrepreneur was obliged to correct the previously deducted VAT, which resulted from the then wording of Art. 86 sec. 10b point 2 of the VAT Act. This meant that if an entrepreneur:
made a simultaneous calculation and deduction of VAT (at the latest by the 15th day of the month following the delivery), but
during the next three months he did not receive an invoice confirming the intra-Community acquisition of the goods,
was obliged to correct the JPK_V7 file and write off the deducted VAT in the period in which it showed the transaction - at the time when the tax obligation arose. It also resulted in the necessity to pay interest due to the fact that WNT ceased to be neutral in terms of VAT.
In a situation where the taxpayer received an invoice documenting WNT after the expiry of the above-mentioned three months, was given the opportunity to adequately increase the input tax in JPK_V7 submitted for the settlement period in which the document was received.
The intra-Community acquisition of the goods took place on January 8, 2021. The buyer did not receive the invoice. How should the transaction be settled?
Intra-Community acquisition of goods should be settled (taxed) by the 15th day of the month following the delivery (i.e. February 15, 2021). In JPK_V7, the taxpayer may show both output tax and input tax. However, it should be borne in mind that if the taxpayer does not receive the invoice in the next three months (counting from the end of the month in which the tax obligation arose, i.e. from the end of February), he will be obliged to reduce the previously deducted VAT charged in the period in which he showed transactions WNT (i.e. in JPK_V7 for February). Receiving an invoice after this date, e.g. in June, restores the right to deduct VAT in JPK_V7 for June 2021.
How to settle intra-Community acquisition of goods on the principles introduced by SLIM VAT 2?
The change in the provisions on intra-Community acquisition of goods introduced under SLIM VAT 2 is the result of the judgment of the CJEU of March 18, 2021 in case C-895/19. This judgment challenged the provisions of the Polish VAT Act concerning the three-month period in which the taxpayer had to have an invoice in order for VAT to be neutral for him. In a situation where the entrepreneur exceeded the three-month deadline, he had to correct JPK_V7, pay any interest, and he could only show input VAT on an ongoing basis. The CJEU agreed with the taxpayer that meeting the above deadline is often impossible in practice, as the buyer does not always have an influence on the moment of receiving an invoice from a foreign contractor. As a result of the changes introduced by SLIM VAT 2, from September 7, 2021, the intra-Community supply transaction is neutral for taxpayers in the period when the tax obligation arises, even if they do not receive a VAT invoice in the three-month period. Pursuant to Art. 86 sec. 10g of the VAT Act, failure to receive an invoice within three months results in the need to correct the deducted VAT. However, the entrepreneur does not go back to the period in which he originally deducted VAT. The correction is made on an ongoing basis within the three-month period.
Additionally, in a situation where the entrepreneur receives the invoice after the expiry of the three-month deadline, he will be able to deduct VAT at the time in which he took into account the value of output VAT, which results directly from Art. 76 sec. 10h of the VAT Act. The new rules for settling intra-Community acquisitions apply to all transactions, even if the tax obligation arose before the effective date of the amendments, i.e. before September 7, 2021.
Mr. Łukasz made the WNT transaction on September 15, 2021. He did not receive the invoice until February 5, 2022. How should he settle the concluded VAT transaction?
Due to the fact that the invoice was received by Mr. Łukasz with a delay, he is obliged to prove the intra-Community supply of goods on October 15, 2021, i.e. no later than on the 15th day after the month in which the goods were delivered. On that day, Mr. Łukasz shows both input and input VAT, thanks to which the transaction is VAT neutral. The three-month period during which he should obtain an invoice, in order not to be obliged to write off the deducted VAT, expires on January 31, 2022. On this day, Mr. Łukasz will be obliged to write off the input VAT. Receipt of the invoice on February 5, 2022, will result in the fact that he will be able to go back to the moment of tax liability, i.e. October 15, 2021, and deduct VAT from the invoice during this period by correcting the JPK_V7 file for October 2021. Thanks to the entry of SLIM VAT 2, if the buyer does not show the intra-Community supply transaction at all, he has the right to go back to the period in which the tax obligation arose and to report both the input VAT and the input VAT, regardless of the fact that the three-month period has expired.
Conclusion - WNT settlements
The regulations contained in the VAT Act impose new obligations on taxpayers related to monitoring the dates and events related to the intra-Community acquisition of goods. First of all, entrepreneurs must monitor three dates important for the purposes of making intra-community payments:
issuing an invoice,
receipt of the invoice.
Entrepreneurs were also left with the issues related to the correct correction of the intra-Community acquisition of goods in the absence of receipt of the invoice within the deadline specified in the act. Taxpayers carrying out intra-Community acquisition of goods can opt for electronic invoicing - a solution that shortens the waiting time for receiving it, which in turn reduces the number of cases in which it becomes necessary to correct the input VAT.
Intra-Community acquisition of goods - booking in the wFirma.pl system
The invoice documenting WNT should be booked in the wFirma.pl system via the EXPENDITURE »ACCOUNTING» ADD »VAT INVOICE» Type of expenditure tab. In the field "VAT rate" you must select the national VAT rate. The WNT box is selected in the IMPORT FROM ABROAD AND OTHER ADVANCED tab.
Thanks to this, the transaction will be shown in the VAT sales and purchase register and in the KPiR. In order for the transaction to be shown in the VAT-EU summary information, when entering the contractor's data, make sure that in the field where the NIP is set by default, select VAT-UE from the list and enter the contractor's number.