This is to let you know that the government has published a draft law to amend the VAT Act ("Draft") to implement Council Directive (EU) 2018/1910 of 4 December 2018 providing for a number of quick fixes to VAT rules ("Directive").

The Draft seeks to amend various laws, including the rules on chain transactions, being transactions where several entities supply the same goods but only one of the supplies may be a supply with transport, i.e. intra-Community supply of goods or exportation, depending on where the goods are moved to.

Under the proposed law, what is called the supply with transport is generally that supply which is made to intermediary. However, if the intermediary provides the supplier with his VAT ID for intra-Community transactions as assigned by the Member State of dispatch, then the supply to the intermediary will be treated as a domestic supply while his supply will be considered the supply with transport.

As a result of these changes, it will be the agreement between the entities in the chain that will ultimately control which of the supplies will be treated as a supply with transport and thus subject to a preferential VAT rate.

Note that the Draft is concerned solely with chain transactions within the EU. Chain transactions ending outside the EU (exportation) will continue to be governed by the old rules on which supply is the supply with transport.

According to the Draft, the proposed changes would enter into force on 1 January 2020. We will keep you up-to-date with the progress of this legislation.

If this issue pertains to your business and you are interested in our assistance, please contact your WTS&SAJA consultant or our office.

Doradztwo Podatkowe WTS&SAJA Sp. z o.o.

Bałtyk Building, 13th floor

ul. Roosevelta 22

60-829 Poznań

tel. (+48) 61 643 45 50

Warsaw Office

Central Tower, 22nd floor

Al. Jerozolimskie 81

02-001 Warszawa

This Newsletter is provided for general information purposes to keep you up-to-date with changes in tax law, tax rulings by authorities, case law of courts and interesting commentaries. Doradztwo Podatkowe WTS&SAJA shall not be held legally liable for any acts or omissions resulting from reliance on such information.

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