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Application of the 0% rate for intra-Community supplies - new terms from 2020

Today, the intra-community delivery of goods is a common transaction among Polish companies. In 2020. there are to be changes to the conditions that allow the application of the 0% rate for intra-Community supply. There will also be other changes that are worth checking out now.

The origin of new changes

The necessity to amend the VAT taxation of international transactions results from the adaptation of the Polish tax law to Council Directive (EU) 2018/1910 of 4 December 2018 amending Directive 2006/112 / EC, hereinafter referred to as the VAT Directive.

The second level of changes is the implementation of the Council Implementing Regulation (EU) 2018/1912 of 4 December 2018.

What will be the subject of the changes?

One of the significant changes that will come into force from January 2020. will be the recognition of the buyer's VAT identification number and the submission of the correct VAT-EU summary information as sufficient material-type premises for the possibility of using the VAT exemption, while retaining the right to deduct it in relation to the intra-Community supply of goods, hereinafter referred to as intra-Community supply of goods. The above changes will apply to active VAT payers and, at the same time, registration for the purposes of conducting EU VAT-EU transactions.

Application of the 0% rate for intra-Community supply of goods - new conditions

The bill of June 11, 2019. the Act amending the VAT Act and the Fiscal Penal Code, which will apply from January 2020. assumes that for the intra-Community supply of goods, the taxpayer-seller could apply taxation to VAT at the 0% rate, the following conditions must be met:

the taxpayer made a supply to the buyer who has the correct and valid tax identification number (NIP) for intra-Community VAT-EU transactions, which the buyer provided to the taxpayer,
the taxpayer, before the deadline for submitting a VAT return for a given settlement period, has evidence confirming the export of goods sold from the territory of the Republic of Poland and delivery to the buyer in the territory of another Member State,
the taxpayer, when submitting a VAT declaration, in which he shows this supply of goods, is registered as an EU VAT payer.

However, according to Art. 42 sec. 1a of the amended VAT Act (from January 2020), the 0% VAT rate will not apply if the taxpayer registered to carry out EU VAT-EU transactions:

does not submit the VAT-EU summary information on time by the 25th day of the month following the month in which the tax obligation in the scope of intra-Community supply of goods arose,
the complex summary information does not contain correct information on the intra-Community supply of goods in accordance with the requirements referred to in Art. 100 sec. 8 of the VAT Act, unless the taxpayer submits a written explanation of the infringement to the head of the tax office.

In turn, in art. 100 sec. 8 of the VAT Act, the necessary elements of the VAT-EU summary information are:

name or first name and surname and tax identification number of the entity submitting the VAT-UE information (containing the prefix of the abbreviation of the name of this country, e.g. PL),
a valid and valid identification number of the buyer of goods and services for intra-Community transactions issued by the member state (containing the prefix of the abbreviation of that state, e.g. PL),
a proper and valid identification number of the seller of goods and services for intra-community transactions issued by the member state (containing the prefix of the abbreviation of that country, e.g. PL),
the listed amounts of intra-Community supply and intra-Community acquisition transactions and the provision of services to taxpayers from the EU, broken down by individual contractors.

Thus, it is clearly visible that even more emphasis has been placed on the correctness of more formal elements than before, the fulfillment of which will allow the application of the 0% rate for intra-Community supply.

The first basic element for the possibility of applying the 0% VAT rate is that the buyer of the goods provides a correct and, above all, valid tax identification number. However, this is not all, as the NIP number of the buyer's business partner should also be valid due to the registration for intra-Community transactions.

The second element dispatched by the legislator is the submission of the correct VAT-EU summary information by the taxpayer to the seller on time. Errors at the stage of submitting information and using incorrect NIP numbers of buyers may deprive the taxpayer of the seller of the possibility of applying the 0% VAT rate for intra-Community supplies.

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Introducing the institution of a presumption

EU Council Implementing Regulation 2018/1912 of 4 December 2018 (hereinafter referred to as the EU Council Regulation) amending the EU Implementing Regulation No 282/2011 with regard to certain exemptions related to intra-Community transactions in Art. 1 introduces a new institution, the so-called presumptions.

That institution assumes that the goods which are the subject of the intra-Community supply of goods have in fact been exported from one Member State to another. In the added art. 45a of the new EU Council Regulation specifies that for the purposes of applying the exemption (0% VAT rate), it is presumed that the goods have been dispatched or transported from one Member State to a destination outside its territory, but within the territory of the EU, in any of the following circumstances.

The first circumstance is one in which the seller indicates that the goods have been shipped or transported by him or by a third party acting on his behalf and at the same time has at least two non-contradictory evidence (signed CMR consignment note, bill of lading, invoice for freight airline or an invoice from a carrier of goods) that were issued by two different parties that are independent of each other, the seller and the buyer.

The second circumstance is also demonstration by the seller that the goods have been transported and that he is in possession of, although single evidence previously mentioned, and additionally has single, non-contradictory evidence, such as:

insurance policy for the shipment or transport of goods or bank documents confirming payment for the shipment or transport of goods,
official documents issued by a public authority, such as a notary, confirming the arrival of the goods in the Member State of destination,
a receipt issued by the warehouse keeper in the Member State of destination, confirming that the goods are stored in that Member State

- confirming shipment or transport, issued by two different parties that are independent of each other, the seller and the buyer.

The third circumstance with regard to the application of the presumption of exportation and delivery of the goods to the EU buyer, the seller has documents in the form of:

a written declaration from the buyer confirming that the goods have been dispatched or transported by the buyer or by a third party acting on behalf of the buyer, and indicating the Member State of destination of the goods,
at least two non-contradictory pieces of evidence (signed CMR consignment note, bill of lading, invoice for air freight or invoice from the cargo carrier), which were issued by two different parties that are independent of each other, the seller and the buyer, or any single evidence, together with any single non-contradictory evidence of shipment or shipment, that has been issued by two different parties that are independent of each other, the seller and the buyer.

The written declaration mentioned in point b should contain:

date of issue,
name or first name and surname and address of the buyer,
quantity and type of goods,
the date and place of arrival of the goods,
in the case of delivery of means of transport, identification number of the means of transport,
identification of the person receiving the goods for the buyer.