Who is to deduct VAT on importation of somebody else’s goods?

Olga Palczewska-Wielińska, Monika Junyszek
Rzeczpospolita

An importation of goods involves obligatory customs clearance of the goods. Such a clearance is usually dealt with through a customs agency. But in some cases the importer may not have the ownership of the goods. In such cases it may be unclear whether the importer is entitled to deduct the VAT charged on the transaction.

Under the VAT Act, the input tax charged on an importation of goods is allowed to be deducted on two conditions: the taxable person holds customs documents showing the VAT amount and the imported goods are applied in the taxable business of that person.

CJUE ruled on 8 October 2020 in case C-621/19 that VAT on importation of goods is not deductible by anyone other than the owner of the goods unless the cost of the goods directly affects the person’s business.

However, note that Polish law does not impose a restriction that only the owner of imported goods is entitled to deduct the VAT charged on their importation. In accordance with this interpretation, it is important for the goods to be connected with importer’s taxable activities.

Consequently, when somebody else’s goods are being imported, whether or not the right of deduction arises should be verified on a case-by-case basis.