The EU-VAT. What is it? Who has the duty to register?
Since Poland’s accession in the European Union the transactions of Poland with foreign markets have became more accessible. Owing to that Polish businessmen started to trade with their counterparties from other member states more frequently. This type of transaction is called the intra-Community transaction. The EU-VAT-UE settlement comes parallel to this type of transaction.
The obligation to register for the purpose of EU-VAT is incurred by those businesses, which intend to conduct transactions with foreign counterparties from the EU Member States. Companies making use of VAT exemption are also subject to this duty, when they intend to conclude intra-Community transactions that are subject to this obligation. In order to register, the taxpayer must submit supporting documents to the tax office. The notification consists of the VAT-R form.
The EU-VAT is paid only by businesses, with valid European-format NIP number and also performed at least one of the transactions listed below in an accounting period:
- ICA – intra-Community acquisition of goods, which is a purchase by a Polish company from a company from European Union country;
- ICD – intra-Community delivery of goods, which is a sale made by a Polish company to companies of European countries;
- sales of services by a Polish companies to a company of a European Union country, where the taxpayer is the purchaser of services.
Not all of intra-Community transactions must be declared on the EU-VAT return form. One of types of transactions involving entities from European Union member states, which are not included in recapitulative statement is the import of services. In spite of purchase of services from European Union member states, the businessperson is not obliged to report the value of purchased services in the EU-VAT return form.
Also in the case of the provision of services or sale of goods to a natural persons who does not conduct any business activities in European Union member states, the businessperson will not report it in the EU-VAT declaration. These transactions will be treated under the same conditions as domestic transactions.
In order to obtain EU-VAT registration, the taxpayer has to submit the VAT-R form to the tax office. This form is used to register the taxpayer of goods and services tax. Businesses, which are already VAT-registered as active VAT taxpayers or taxpayers exempted from VAT, must only report an update on the form. The date of commencement of making intra-Community transactions is a significant item thereof. Thank to submitting the indicated form, the company will receive its the European NIP number from the tax office. This number will be used by the company in intra-Community transactions.
Upon registration as EU-VAT taxpayer and starting the transactions with Union counterparties, the deadline for submitting of the EU-VAT return forms must be observed. Since January 2017 the submission of EU-VAT return forms is monthly, even in the case of companies, which submit their VAT return forms on a quarterly basis. What is more, the regulations introduced in that time shall determine, that EU-VAT returns for intra-Community transactions may be submitted to the tax office exclusively by electronic means.
- Submitting the EU-VAT returns should take place by the 25th day of the month following the month accounted for.
- In case, in which the business did not conduct any inter-Community transactions in the respective month, it is not required to submit the EU-VAT return form for this month.
- In case of exceeding the deadline for submitting the EU-VAT return form a letter should be sent to the tax office, explaining the reason for that failure to keep the deadline.
- A EU-VAT correction statement should be submitted monthly as well. The taxpayer, who noticed a mistake in his/her EU-VAT return form should submit the EU-VAT correction statement as soon as possible.
Nowadays, European Union transactions are an increasingly common phenomenon on the market. However, as it turns out, businessmen have some difficulties related to settlement of certain economic events, especially with tax on such transactions. That is why they should check, whether they are subject to obligation to register for the EU-VAT for the purpose of inter-Community transactions, before making the first purchase with European Union counterparty. If necessary, they should register to the EU-VAT and always observe the deadline for submission of returns.