Since 1 July 2020, new rules on chain transaction taxation have been in force in Poland in connection with Council Directive (EU) 2018/1910 of 4 December 2018. The new rules are aimed at harmonising the settlement of chain transactions across the EU.
The assumptions of a chain transaction are fulfilled if:
- the transaction involves at least 3 entities and;
- the good is sold by the first seller to the intermediary operator who sells it to the last transaction participant in the chain and;
- the good is shipped (transported) directly from the first supplier to the last consumer.
Within the supply chain, only one international transaction can be exempted from VAT (in Poland taxed at 0 %). The others will be taxed with the applicable national tax.
Under the new rules, the first sale is exempt unless the intermediary operator in the chain provides the first seller with the VAT number assigned in the country where the dispatch of the goods begins (i.e. the country of the first VAT taxpayer) – in this case the second sale is exempt.
The above new provisions do not apply to trade with non-EU countries, in relation to which the circumstances of the transaction still need to be examined.
Due to the new regulations we recommend that you verify the chain transactions. In case of doubt, please contact our VAT specialists.
Authors: Małgorzata Justyńska, attorney at law and tax consultant; Paulina Kaźmierczak, tax consultant