Commercial Operations Performed When Exporting and Importing Goods from Poland to Other Countries

It doesn’t matter if our goods come from outside the borders of the European Union, or if we bought them during an intra-community acquisition of goods – each such activity is accompanied by commercial operations, such as issuing an invoice. Therefore, numerous models have been created that correspond to the diverse actions and situations of taxpayers. An important piece of information is that according to the VAT Act, everything that has a physical form is considered a good. An example tax rate may be 23%.

Concepts such as import and export have been replaced by other transaction models in the European Union. They have been simplified, all thanks to the implementation of laws that have resulted in trade between member states being subject to a zero tax. This system now operates under the name intra-community acquisition of goods. This means that when we buy a product in one member state and sell it in another, also belonging to the community, once we meet other appropriate conditions, we can levy a zero tax. This mainly involves documenting that an intra-community acquisition took place, not an import or export of goods, and the buyer must have a valid identification number for intra-community transactions. This includes transactions related to maritime or air transport, or the delivery of computer equipment to schools. If any of these conditions are not met, we will be required to settle using the standard rate. Since Poland is a member state of the European Union, it is also subject to the regulations related to intra-community acquisition of goods and possible zero VAT tax. Of course, trading with member states will be different than within Poland.

During trade within the European Union, we may encounter different buying and selling locations: purchasing in Poland and selling to another member state, buying in a neighboring EU state and selling in Poland, as well as transactions conducted by Polish companies entirely outside the country, in other EU states. The entire situation is relatively simple when issuing a VAT invoice by the VAT payer to the buyer, who is also registered in the system. However, the rules change when issuing a different invoice, or when the buyer is not registered or does not pay the tax.

So what happens when an invoice is issued without VAT, but we are dealing with a VAT payer? One solution may be to set the tax rate at 0% (which is still a taxable sale).

What if an invoice with VAT is issued for a VAT-exempt payer? The rules for such exemptions have been strictly defined. We may also encounter a situation where the buyer is not exempt, but simply does not have a VAT-EU number. In both cases, a non-VAT taxpayer can easily receive an invoice. In this case, it is important to remember that if a Polish company is conducting activities for a foreign company, the place of the service is the country where the client is based.

Another example may involve a transaction that takes place outside the EU and the physical goods are also located outside its borders. For example, an item purchased in China or Ukraine is sold in one of the member states. For such goods, it is important to remember to pay the appropriate customs duty and also settle the tax, just like in the case of trade within the European Union. In such situations, invoices without VAT may also be issued, or those that include VAT from the buyer’s country. In the former case, a small amount generated during the transaction may result in a tax exemption. For special goods, the tax may also be reduced. In the latter case, settling as for a domestic purchase is only possible for an active VAT taxpayer. It is most convenient if such an invoice is issued in English. It must include information about both sides of the transaction, details of the goods, document number, and relevant dates.

The next issue is the export of goods purchased in the country or within the EU to countries outside its jurisdiction. This transaction can also benefit from zero taxation after meeting specific legal conditions. For third countries, the place of taxation of products is the destination country, that is, the buyer. Even for a taxpayer who does not pay VAT, we are still required to issue the necessary documentation as export invoices follow the same rules as standard domestic invoices.

What are the tax implications when buying and selling outside the borders of the European Union? The rules of intra-community acquisition of goods do not apply here. Because these transactions take place outside Poland, the taxpayer does not show VAT on them. Such goods are also included in the VAT-7 declaration by the entity, and the invoice issued by the seller originates from the country of the goods. If purchased goods remain at their storage location and do not leave the country, tax must be levied in the country where they are held.

As we can see, commercial operations are diverse and influenced by many factors. Therefore, it is always important to first ensure in which countries the transaction will take place, what type of VAT payer we are dealing with, and whether we meet the conditions to be exempt from fees.