Intra-Community Supply

October 12, 2022

Intra-Community Supply (ICS) is the export of goods from the territory of Poland to the territory of another European Union country, to a taxpayer registered for the purposes of tax on goods, and services in the country other than Poland.

Two elements are therefore of key importance for the purpose of classifying a transaction as ICS:

1. a movement of goods between two countries that are EU members;
2. the transaction takes place between entities registered for tax on goods and services, as part of ICS.

Importantly, the VAT Act indicates cases in which the transfer of goods from Poland to the territory of another European Union country does not constitute intra-Community supplies. As an example, the following transactions can be indicated:

1. goods are installed or assembled (with or without a trial run) if the goods are moved to or on behalf of the taxpayer making the delivery

2. the movement of goods takes place as part of intra-Community distance sales of goods

3. the goods are to be exported by that taxpayer.

In addition, the VAT Act also provides solutions for intra-Community transactions in which more than two taxpayers participate, the so-called tripartite transactions

When is the tax liablity arising in ICS?

At the time of issuing the invoice by the taxpayer, but not later than on the 15th day of the month following the delivery of the goods. The exceptions are continuous deliveries – lasting longer than a month – in this case the tax obligation arises with the end of each month, until the end of deliveries. 

What is the basis for taxation in ICS?

Anything that is a payment that a supplier of a good or service provider has received or will receive for a sale from a buyer, recipient or third party, including subsidies received, subsidy payments and other payments of a similar nature that have a direct impact on the price of the goods or services provided by taxpayer – being the basis for calculating tax in ICS.

The tax base includes:

• taxes,
• custom duties,
• fees and other charges of a similar nature, except for the amount of tax
• additional costs that are charged by the supplier or service provider to the buyer or recipient, including:
  • commisions,
  • packaging costs,
  • transport and insurance costs,

Author: Agnieszka Ryms

Tags intra-community supply transaction, wewnątrzwspólnotowa dostawa towarów