Importing goods from outside the EU – basic procedure: VAT, JPK and documentation
Nowadays, an increasing number of companies decide to purchase goods abroad. This gives entrepreneurs, among other things, the opportunity to adapt production more quickly to the diversifying preferences of customers. However, it is worth remembering that such transactions are accompanied by legal requirements related to the inspection of goods as well as the necessity of holding extensive documentation. What is worth knowing in this regard?
Table of Contents
How does the VAT Act define the import of goods?
The concept of the import of goods is described in Article 2(7) of the VAT Act and is understood as the bringing of goods from the territory of a third country (outside the EU) into the territory of the European Union. The definition of import does not provide for the introduction into the territory of the EU of goods that are not in free circulation within its territory. The place of import is the European Union Member State in whose territory the goods are located at the moment they are introduced into the territory of the EU.
It should be borne in mind that certain territories, despite belonging to a state classified as an EU Member State, may be territorially excluded from the territory of the European Union. For example, the Canary Islands include the following islands:
- Lanzarote,
- Fuerteventura,
- Gran Canaria,
- Tenerife,
- El Hierro,
- La Palma,
- La Gomera.
Who is entitled to deduct VAT on import?
Taxpayers liable for VAT on the import of goods are entities on whom the obligation to pay customs duties rests. Being an active VAT taxpayer, it is possible to deduct input VAT on the import of goods to the extent that these goods are used to carry out VAT-taxable activities. On the other hand, a taxpayer who is not an active VAT taxpayer has no possibility of recovering the VAT paid on imported goods.
What are the rules for taxing imported goods?
As a rule, the taxable base for the import of goods is the customs value increased by the due customs duty. The right to reduce the amount of output tax by the amount of input tax arises in the settlement for the period in which the tax obligation arose with respect to goods and services acquired or imported by the taxpayer. The tax obligation for the import of goods arises at the moment the customs debt is incurred, subject to paragraphs 10a and 11.
A customs debt—if the goods are subject to import customs duties—may also arise in the event of failure to meet certain customs conditions and obligations. If the acceptance of a customs declaration results in the incurrence of a customs debt, the release of goods on which charges are due may take place only after these charges have been paid or secured.
Standard procedure – VAT settlement
The standard procedure consists of settling VAT in the SAD or ZC299 customs declaration. The settlement of VAT due on import means its calculation and reporting:
- in the customs declaration on the SAD form (in the case of a paper customs declaration),
- in the certified customs declaration ZC299 (in the case of an electronic customs declaration).
The importer of the given goods is obliged to calculate and report in the customs declaration the amounts of VAT, taking into account the applicable rates that apply to the given goods in the territory of Poland. Therefore, if, for example, goods related to a car are imported, only 50% of the VAT rate may be deducted.
If the importer has paid the VAT due under the standard procedure, it is no longer reported in the JPK_V7M or JPK_V7K file. However, the importer may report the paid VAT as input tax, and in this way, for an active VAT taxpayer, such a transaction will be tax-neutral. As a rule, VAT paid on the import of goods may be deducted in the JPK_V7M or JPK_V7K submitted for the period in which the tax obligation for output VAT on the import of goods arose, or in the settlement for one of the next two (quarterly settlement) or three (monthly settlement) subsequent settlement periods. Such a transaction should also be marked in the JPK_V7M or JPK_V7K with the code IMP in the VAT procedures field. An importer using the standard procedure, unlike the simplified procedure, does not have to be registered for it. An indicator of this procedure is also the payment method R shown on the customs document, which means security, including a cash deposit.
Importing goods may foster economic development and, for the importer, increase the product range, thereby enhancing market competitiveness. However, documentation related to the import of goods is of crucial importance for importers, including its archiving for the purposes of potential inspections as well as for the possibility of reporting tax in the JPK. Experts from MDDP Outsourcing remain at your disposal in the field of comprehensive accounting services—feel free to contact us!
Author:
Karolina Rostkowska, VAT Specialist, MDDP Outsourcing Katowice
