We understand that tax settlements can be a complex and time-consuming process for many taxpayers. In our firm, our top priority is always to support our clients and make this task easier for them. It is most evident in the context of VAT that the legislator is focusing on electronic and automated solutions. ICS settlements. All taxpayers are left to fend for themselves, forced to grapple with a variety of technical and substantive issues on their own. ICS settlements is a crucial aspect of international business operations. It necessitates meticulous transaction documentation and proper fulfilment of the tax return. Our team of tax experts can guide you through the intricacies of ICS settlements, effectively minimizing the risk of errors and associated tax implications. We are equipped to assist you in resolving challenges arising from both chain transactions and intra-Community supplies or acquisitions of goods. Our day-to-day experience reveals that VAT is the area where clients have the most questions and concerns, which we strive to address by the 25th day of the following month.
Our firm conducts a comprehensive analysis of the taxpayer’s documents related to the international acquisition and supply of goods within the EU. We undertake, among other things, the implementation of appropriate procedures that will allow for the application of the 0% rate in ICS settlements, we represent clients in disputes with tax authorities. We also conduct training on intra-Community and chain transactions.. We carry out internal audits, which allow us to thoroughly analyze all formalities related to ICS settlements and select appropriate procedures taking into account the specifics of the given industry. With us, each client can settle VAT on the most favorable terms.
We would like to present you several solutions that can significantly facilitate the tax settlement process. The first one is the National e-Invoice System. This system has been introduced to streamline and automate the process of issuing and recording invoices. Thanks to the National e-Invoice System, taxpayers have the option to use electronic documents, which eliminates the need to store traditional paper invoices.
Using this system will be mandatory. The National e-Invoice System will make accounting processes more efficient by reducing the amount of paper documentation, making it also an eco-friendly initiative.
Legislative bodies are constantly working on improving the process of settling the goods and services tax. Entrepreneurs submit their comments in the form of proposals to the Ministry of Finance, resulting in Slim VAT changes. Significant improvements are to be introduced from July 1, 2023. The new package of changes is called Slim VAT 3. VAT deduction is expected to be simpler and more efficient thanks to it. The introduced solutions will make managing a business in terms of documentation and settlements less time-consuming. Slim VAT 3 introduces a range of facilitations. These include, among others, raising the small taxpayer sales limit to 2,000,000 euros, consolidating the issuance of binding information, reducing formalities in international trade, and decreasing the number of corrections. Thanks to Slim VAT 3, the deduction of VAT charged on intra-Community acquisitions will not be dependent on the requirement to have an invoice. These simplification proposals will surely please all entrepreneurs. The previous packages of changes in VAT, namely Slim VAT 1 and 2, are the result of an audit of regulations conducted by the Ministry of Finance, aimed at adapting them to the conditions of small and medium-sized businesses.
The most important issue in intra-Community supply of goods (ICS) is the possibility of applying a preferential 0% rate, which is conditioned on having appropriate documentation confirming the export of goods to the territory of another EU country.
Since January 1, 2020, taxpayers can use the “ICS presumption” by collecting specific evidence in specific combinations. By having the appropriate catalog of documents, the taxpayer is protected, as the burden of proof that the goods were not exported lies with the tax authority.
For whom?
The issue of intra-Community supply of goods concerns entities for which transactions with entities within the EU are one of the basic sales processes.
Showing the due tax along with the right to deduct the input tax – this is how the intra-Community acquisition of goods should be settled.
We assist our clients in the correct settlement of intra-Community transactions, including those occurring within chain transactions.
Chain Transactions – How to Approach This?
Chain transactions involve several taxpayers, while the transport of goods is carried out from the first taxpayer to the final buyer. The most important thing is to determine which delivery is the moving one and is subject to the 0% VAT rate (due to intra-Community supply or export) – in this case, the remaining deliveries are taxed according to national regulations.
The regulations regarding intra-Community chain transactions have changed according to the EC guidelines, the so-called Quick Fixes – since July 1, 2020, the moving delivery is, in principle, assigned exclusively to the delivery made to the intermediary. There are exceptions to this rule, but each chain transaction requires careful analysis.
A chain transaction can involve anyone.
Any taxpayer may (even unknowingly) be a participant in a chain transaction. In the case of intra-Community supply or export, the lack of proper identification of one’s role in the transaction can have negative consequences.
A Binding Rate Information is an institution facilitating the classification of specific goods or services according to the Combined Nomenclature (CN) code or the The Polish Classification of Types of Constructions (PKOB) or The Polish Classification of Goods and Services (PKWiU) symbol for the purpose of determining the correct VAT rate applicable in Poland to these goods or services.
For whom?
Binding Rate Information applies to entities facing doubts regarding the correct classification of goods or services, which is necessary to determine the appropriate VAT rate. This also applies to the settlement of intra-Community acquisitions (ICS).
National e-Invoice System – this system has been introduced to streamline and automate the process of issuing and recording invoices. Thanks to the National e-Invoice System, taxpayers have the option to use electronic documents, which eliminates the need to store traditional paper invoices.
Usage of this system will be mandatory. The National e-Invoice System will make accounting processes more efficient by reducing the amount of paper documentation, thus also promoting ecological initiatives.
