Recently, we have discussed the topic of sales to consumers (B2C) in Poland – through the marketplace.
Today we would like to describe the issue of foreign sales – in two variants: for the benefit of taxpayers (B2B) and consumers (B2C).
B2B sales
Such a sale may constitute ICS, taxed in Poland at 0% – if the general requirements are met (Article 42 sec. 1-3 of the Polish VAT Act:
In order to be able to apply the 0% rate, the following conditions must be met in total:
- the goods physically left the territory of Polish – to the territory of another Member State of the European Union, and the export took place in connection with the sale to the customer;
- the customer has a valid and valid identification number for intra-Community transactions, assigned by the Member State responsible for the customer, containing the two-letter code used for value added tax that the customer has provided to the seller;
- the seller, when filing a tax return in which he shows this supply of goods, is registered as an EU VAT payer;
- the seller submits the correct VAT-EU information in a timely manner;
- the seller has the appropriate documentation in the scope of the ICS made.
In practice, the documentation issue may be problematic.
“Classic” evidence in this regard are documents such as: transport documents (e.g. CMR) or specification of individual pieces of cargo (Article 42 sec. 3 of the Polish VAT Act).
However, it may be that the marketplace operator will not provide such documents to the seller.
What is important, however, according to Article 42 sec. 11 of the Polish VAT Act, if the evidence referred to in secs. 3-5 of the above-mentioned article does not unequivocally confirm the delivery to a buyer located in the territory of another Member State, evidence confirming the supply may also be “other documents indicating that an intra-Community supply has taken place”. The VAT Act does not present a closed catalogue of documents that may be applicable here, indicating a sample catalogue, including in particular:
- commercial correspondence with the buyer, including his order;
- documents relating to insurance or freight costs;
- a document confirming payment for the goods, except in cases where the delivery is free of charge or the obligation is performed in another form, in which case another – a document stating the expiry of the obligation;
- proof of receipt by the purchaser of the goods in the territory of a Member State other than the territory of the country.
Often, the marketplace operator provides customers with a specific report, which may contain detailed information that allows for the identification of each transaction (e.g. place of delivery, country of shipment, country of receipt of the goods, date of delivery, value, data of the supplier and buyer with their tax identification numbers, currency of the transaction, etc.). Such a report should be treated as a document confirming the delivery, and therefore the right to the 0% rate in the ICS (this was confirmed, for example, in the individual ruling of the Director of the National Tax Information of 29 December 2022, file ref. no. 0114-KDIP1-2.4012.488.2022.2.JO).
As a rule, ICS invoices should be issued in KSeF. Since foreign contractors are not obliged to use KSeF, the structured invoice must be provided to them in an agreed manner – e.g. in PDF form, paper form or with a QR code.
B2C Sales
In this type of sale, a specific settlement regime may be applied – the so-called (in Polish) “WSTO regime” (intra-community distance sale of goods).
In principle, the WSTO is subject to taxation in the country of consumption – assuming that the level of such sales exceeds PLN 42,000 net (EUR 10,000) per year. It is possible to resign from this exemption (the need to submit a notification – VAT-29). In other words, sales below the limit or upon resignation are accounted for as Polish domestic sales.
Note: for the purposes of applying the WSTO rules, it is necessary to collect evidence that the goods were delivered to a Member State of the European Union other than Poland – otherwise sales in Poland should be taxed. Such evidence is transport documents or other documents confirming the receipt of goods in that country. Supplementary documentation may be commercial correspondence with the buyer or confirmation of payment for the goods.
The evidence must be collected before the deadline for filing the tax return for a given period.
If they are not collected, you may refrain from reporting sales until the end of the deadline for submitting the return for the next accounting period. In the absence of documents, sales in Poland should be taxed, although obtaining the documents later allows for the correction of the tax due (correction on an ongoing basis).
Comments on documentation – as in the point above.
In the case of using the WSTO mechanism, the taxpayer may:
- register for VAT in the country(ies) of consumption, or
- use the OSS procedure.
The OSS procedure includes the preparation and submission of a dedicated tax return in Poland, with the VAT due being settled according to the rates applicable in the given European Union Member States. The taxpayer pays the tax to the account of the Polish tax authority, which in turn settles these revenues with the tax authorities of other European Union member states.
Issuing an invoice is optional here – however, if it is issued, it should meet the requirements of the VAT Act, and additionally include the tax rate in the country of consumption.
The application of the OSS procedure requires a notification – on the VIU-R form. The competent tax authority is the Head of the Second Tax Office in Warsaw-Śródmieście.
The tax return dedicated to settlements under the OSS is the VIU-DO declaration. VIU-DO is submitted quarterly (by the end of the month after the end of the quarter). In the event of no turnover, a zero declaration must be submitted.
If errors are found in the submitted VIU-DO declaration, their correction is made in the VIU-DO declaration submitted for the current accounting period, but no later than within 3 years, counting from the date of expiry of the deadline for submitting the VIU-DO declaration in which the errors were found.
The tax is payable in EUR, to the bank account of the Head of the Second Tax Office in Warsaw-Śródmieście. In the case of sales in currencies other than EUR, these values must be converted into EUR – the exchange rate published by the European Central Bank on the last day of the relevant accounting period is used for their conversion and, if it is not published on that day, the exchange rate published on the next day.
As part of the OSS mechanism, it is necessary to keep records of transactions covered by it in electronic form.
The records shall include, in particular, in the case of supplies (without the provision of services):
- the Member State in which the supplies of goods are made;
- description and quantity of the goods to be delivered;
- the date of delivery of the goods;
- the tax base with an indication of the currency used;
- any subsequent amounts increasing or decreasing the tax base;
- the VAT rate applied;
- the amount of VAT due, indicating the currency used;
- the date and amount of payments received;
- any advance payments received prior to the delivery of the goods;
- if an invoice has been issued, the information contained in the invoice;
- information used to determine the start and end of the shipment or transport of goods to the buyer;
- any evidence of possible returns of goods, including the tax base and the VAT rate applied.
Using OSS disables the application of KSeF to invoices.
No obligation to fiscalize sales under OSS at the cash register.
