Belonging to the European Union results in many conveniences and favorable solutions for both individuals and businesses. One of them is intra-Community acquisition of goods, which makes it possible to purchase many attractive foreign products and deliver them to the destination country in a convenient and hassle-free manner. Find out what Intra-Community Acquisition of Goods (IAC) is and what you should know about it before buying and delivering certain products from EU member states.
What is intra-Community acquisition of goods?
The concept of intra-Community acquisition of goods is defined in Article 9(1) of the Law of March 11, 2004 on tax on goods and services. The provision contained therein says that WNT is “the acquisition of the right to dispose as owner of goods which, as a result of a supply, are dispatched or transported into the territory of a member state other than the territory of the member state in which dispatch or transport begins, by or on behalf of the person making the supply, the purchaser of the goods.”
In practice, this means the acquisition of the right to dispose of goods purchased and shipped or transported into the territory of Poland by an entity from another EU member state as if they were their owner, which is the case when the goods have been transported from one EU country to another.
Items acquired as a result of receiving domestic shipments cannot be included in WNT. Nor do items that were shipped from outside the EU area.
The provisions of the VAT Law indicate the conditions that are required to be met by the purchaser as well as by the supplier in order to consider a given supply as WNT. Article 9(2) of the law in question applies, according to which, when the purchaser is a self-employed VAT taxpayer or a value-added taxpayer, and the purchased goods are to be used for his business. The purchaser may also be a legal entity that is not a taxpayer. On the other hand, the entity making the supply of goods should be a VAT or value-added taxpayer.
Intra-Community acquisition of goods also includes shipments that have been purchased and shipped from a contractor who does not have an EU VAT number.
Intra-Community acquisition of goods and tax issues
Under current law, the fact of acquiring goods is subject to taxation in the destination country. In the situation of intra-Community acquisition of goods, when the shipment is sent from the territory of the European Union to Poland, tax is therefore calculated in accordance with the provisions of Polish law. The entrepreneur is obliged to fulfill the tax obligation by the 15th of the next month after receiving the shipment. If the VAT invoice is issued earlier, the tax procedure must still be performed in the month in which the document was issued.
Failure to meet the deadline for showing a VAT transaction results in the need to file an adjustment to the VAT return. Failure to take this action, on the other hand, may result in a tax-neutral transaction. In the case of a purchase document other than a VAT invoice, the strict deadline for tax liability is not as important.
When is it not necessary to show WNT in settlements?
WNT does not have to be accounted for when the purchase was made by flat-rate farmers for their agricultural activities, as well as taxpayers who are not entitled to a reduction in the amount of tax in a later settlement for the purchase of such products. Intra-Community acquisitions of goods also do not have to be reported if the value of all items purchased in this way during the tax year did not exceed PLN 50,000.
