Purchase of goods from a taxpayer who does not have EU VAT and VAT settlement
When purchasing goods from the European Union, we usually deal with the so-called WNT, i.e. intra-community acquisition of goods. To diagnose intra-Community acquisition of goods, certain conditions must be met, both on the part of the buyer and seller. According to the regulations, both parties to the transaction should register as VAT-EU taxpayers and use the European VAT number. How to settle the purchase of goods from a taxpayer without EU VAT? Answer in the article!
What is an intra-Community acquisition of goods?
Pursuant to Art. 9 sec. 1 of the VAT Act, we refer to the acquisition of the right to dispose of goods as the owner of the goods 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. Within the intra-Community acquisition of goods, the goods may be transported by the seller, buyer or an entity acting for the benefit of the buyer or seller.
Who is required to have a European TIN?
The VAT-EU number, i.e. the European NIP number, is the number that should be used by taxpayers carrying out the following transactions in the territory of the Community:
- Intra-community supply of goods (intra-community supply of goods), i.e. sales of goods to the EU;
- Intra-Community acquisition of goods (intra-Community acquisition of goods), i.e. the purchase of goods from EU contractors;
- sales of services to EU contractors whose place of supply is the country of business or residence of the buyer;
- purchase of services from companies based outside Poland, for which the buyer is obliged to settle VAT in the territory of the Republic of Poland.
For the purposes of EU transactions, active VAT payers register on the VAT-R form by checking box 58 in part C.3. Information on making intra-community transactions. Before performing the first intra-Community transaction, you must register as a VAT-EU taxpayer. Entrepreneurs with the European Tax Identification Number (NIP) are required to use it when making intra-Community transactions. The contractor's reliability can be checked using the online VIES system (by entering his NIP number assigned to him for intra-community activities).
Purchase of goods from a taxpayer who does not have EU VAT
In order to recognize WNT, both the buyer and the supplier must meet certain formal requirements.
The buyer of the goods must be:
- a VAT taxpayer, and the goods should be intended for the purposes of his business or
- a legal person who is not a VAT taxpayer, if the total value of the intra-Community acquisition in the territory of the country during the tax year exceeded the amount of PLN 50,000.
On the other hand, the person delivering the goods must be:
- a VAT payer or
- taxpayer of value added tax.
It may happen that we purchase goods from a contractor from the European Union who is not a registered VAT payer or a value added tax payer, i.e. a VAT exemption. Then the transaction does not meet the conditions allowing for the recognition of an intra-Community acquisition of goods. This means that we do not show it in the JPK_V7 file, and the expense can be classified as tax deductible costs.
Doubts among buyers of goods from EU contractors are raised when the seller is a value added tax payer, but is not registered for the purposes of intra-Community transactions. In this case, WNT should be recognized, of course, provided that the other conditions allowing for the calculation and deduction of VAT are met, which is confirmed by the individual interpretation IPPP3 / 4512-93 / 16-2 / JF of May 6, 2016.
The director of the Tax Chamber in Warsaw stated:
"(...) failure to register an EU contractor for EU VAT purposes in the territory of a Community country or failure to disclose to the Applicant its registration number for Community transactions, this does not affect the treatment of the described transaction as an intra-Community acquisition of goods, as in Art. 9 sec. 2 point 2 of the Act, there is no question of a registered taxpayer ”.
How to settle in JPK_V7 and VAT-EU summary information the purchase of goods from a taxpayer without EU VAT?
As already mentioned, irrespective of whether the seller is registered for intra-Community transactions, as long as the other conditions are met, the transaction should be accounted for as intra-community transaction.
In the previously quoted individual interpretation, the Director of the Tax Chamber in Warsaw writes:
"(...) since in the present case the Applicant is obliged to recognize the intra-Community acquisition of goods, she is also obliged to show this transaction in the declarations submitted to the tax office, in accordance with the rules applicable at the Intra-Community acquisition of goods".
The essence of the intra-Community acquisition of goods is the possibility of taxing the purchase by the buyer. The VAT tax is then shown in the JPK_V7 file on the side of the output tax. Typically, this tax can also be deducted as input tax, making the transaction tax neutral for the buyer. The VAT tax is neutral in the period of settlement of VAT due to VAT only if we settle the settlement within 3 months. In the case of intra-Community acquisition of goods, the taxpayer is obliged to submit VAT-EU summary information. The VAT-EU declaration should be submitted to the tax office in electronic form. The calendar month is the billing period. The binding deadline for submitting VAT-UE is the 25th day of the month following the billed month.
In the VAT-EU summary information, the transaction of purchasing goods from the European Union should, as a rule, be included in Part D Information on intra-Community acquisitions of goods. Each column shows the counterparty's country code, tax identification number and transaction amount. However, if the supplier has not been registered for VAT-EU purposes in the Community, such a transaction is not shown in the VAT-EU summary information submitted to the tax office, which was also confirmed in the previously quoted interpretation by the Director of the Tax Chamber in Warsaw:
"(...) therefore, since the EU supplier does not provide a valid and appropriate VAT-EU number and the Applicant is not able to obtain such a number on its own (from a contract, invoice, commercial correspondence) or the supplier is not registered for EU VAT on in the territory of the Community, such a transaction is not included in the summary information on the completed intra-Community VAT-EU transactions submitted to the tax office ”.