Transport is an extremely rapidly developing industry in Poland. It requires knowledge not only in the field of logistics, but also taxes, with particular emphasis on VAT. Therefore, as part of our blog, we offer you a basic compendium of knowledge related to the taxation of transport of goods on international routes.
International or intra-community transport?
Before informing about VAT in transport carried out outside our country, it is first necessary to distinguish between international transport and intra-Community transport.
International transport is defined in Art. 83 sec. 3 point 1 of the VAT Act, which included its definition, stating that international transport is the transport or movement of goods between points located in the European Union and outside the European Union. International transport also includes transit consisting in the carriage of goods between two places located outside the European Union, but on a certain section of the route crossing an EU country. The sphere of international transport activities also includes intermediation and international forwarding. International transport can be carried out by various means of transport, including: trucks, trains, container ships, airplanes, etc.
At the same time, international transport will not be the carriage of goods between points located in one country, but partially transit through the territory of another country.
From the point of view of Poland and other European Union countries, the transport of goods carried out between places located on the territory of the EU is intra-Community transport and is subject to different rules than international transport.
VAT in international transport
International transport is taxed at 0% VAT. The basis for the application of such taxation must be the correctly established nature of the transport service. Otherwise, it may turn out that it has been calculated incorrectly.
Application 0% VAT rate it can only take place if a specific one has been made documentation of the international transport of goods. In this respect, the obligations of the entrepreneur are specified in Art. 83 sec. 5 of the VAT Act, which obliges the carrier or freight forwarder to prepare the relevant documentation, i.e .:
- bills of lading or forwarding documents used only in international transport, or other documents which clearly show that the border with a third country was crossed during transport, along with an invoice issued by the carrier or freight forwarder;
- in the case of transport of imported goods, it will be necessary, in addition to the documents indicated above, also documents from the customs office indicating that the value of the service is included in the tax base for the import of goods;
- if the exporter transports the goods, you will need proof that the goods have been exported.
Failure to meet the above requirements results in the fact that the carrier or freight forwarder cannot apply the 0% VAT rate when issuing an invoice for the transport service.
Additional discounts for carriers and forwarders in the field of international transport
The Ministry of Finance went even more to the hand of people involved in the international transport industry, pointing out additional discounts in the application of the tax on goods and services. In the regulation, which entered into force on December 23, 2013. it was stated that the zero VAT rate may also be applied in the case of:
- transport of goods that is part of an international transport service, even if it is entirely carried out within a given territory of the country;
- intra-Community transport, if it is part of an international transport service.
Place of taxation of international transport
Pursuant to the VAT Act, the service provided to the taxpayer is taxed at the place of business of the service recipient. There are, however, exceptions to this rule. In a situation where the service is provided entirely outside the territory of the European Union, the place where the service is provided becomes the territory of a country outside the EU. On the other hand, if the transport order is performed entirely in the country, but by a taxpayer from outside the EU, the place of service is assumed to be the territory of the country.