According to a general rule a supplier of goods reports output VAT. However in some situations a purchaser of goods, not a supplier, is the one liable to report and settle output VAT related to the given supply. These situations include both domestic supply of goods by supplier seated abroad, as well as supply of listed goods by supplier seated in Poland.
Supply by foreign-established supplier
Pursuant to art. 17 item 1 point 5) of the Polish VAT Act purchaser of goods reports output VAT when certain conditions are met.
A supplier should be a taxpayer having neither seat of economic activity, nor fixed place of business activity in Poland. Moreover the supplier should not be registered for VAT purposes in Poland.
A purchaser should have either seat of economic activity, or fixed place of business activity in Poland.
If conditions referring to both supplier and purchaser are met, the supplier of goods does not settle output VAT. On a contrary, even when the supplier settled VAT, the purchaser should report VAT due.
The mentioned regulation does not apply to gas, electric energy, heating and cooling energy supplied through a piping system, nor to distance-sales in Poland. For those supplies a separate system was introduced.
Supply of specific goods
Apart from supplies by supplier seated abroad, Polish VAT Act lists situations when a purchaser of goods in domestic transaction should report output VAT. Pursuant to art. 17 item 1 point 7) purchasers of goods listed in Annex No. 11 to the VAT Act are obliged to report and settle output VAT using the reverse – charge mechanism. The conditions for reverse – charge are as follows:
a) supplier is a taxpayer, whose supply is not VAT-exempt,
b) purchaser is a taxpayer registered for VAT purposes in Poland.
These conditions have to be met jointly. Such reverse – charge applies irrespective of whether or not the supplier has a seat of economic activity in Poland.
The list in Annex No. 11 includes goods such as:
- a wide range of steel products e.g. iron-alloys , granules, rolled flats, rods, etc.
- waste of metal, glass, paper, rubber, polymer, etc.
- recycled material from metal, glass, paper, rubber, polymer, etc.
These goods are often referred to as “the sensitive goods”.
Extension of the list of goods
On 1 July 2015 the regulation concerning domestic reverse charge was extended. A new group of goods was added. The group includes:
- portable personal computers such as laptops, notebooks, tablets;
- cellphones including smartphones,
- video game consoles.
The mentioned goods fall under reverse – charge mechanism when a daily threshold of PLN 20 000 net of VAT of transaction concerning such goods is reached. This threshold is counted per a single economic transaction. A single economic transaction means transactions based on a single agreement, covering one or more supplies of listed goods. The single economic transaction can take place even though each of the supplies is based on a separate order, or more than one invoice is issued. In some situations even transactions taking place based on a few agreements, can be considered as a single economic transaction.
On the other hand when a threshold of PLN 20 000 is not reached, the supply of the listed goods does not fall under domestic reverse – charge.
Transactions involving sensitive goods are subject to special interests by the tax authorities. We advise analyzing, prior to transaction, if the supply falls under the reverse – charge mechanism. If you have any questions, please contact our office.