The requirement for the acquirer to provide its EU VAT number will be a substantive requirement for eligibility to charge VAT at the rate of 0% on intra-Community supplies. It is important to note that such a requirement was provided for in Polish law in the past, i.e. before April 2013. The law at that time was that a taxable person was eligible to charge VAT at the rate of 0% only if the supply was made to an acquirer having a correct and valid EU VAT number and only if that number was shown on the invoice for the supply.

Later, based on decisions of the Court of Justice of the European Union and of Polish courts that considered the provision of an EU member state as a formal requirement for eligibility to apply the rate of 0% (if this requirement was not met, but the substantive requirements (i.e. that the goods must have been transported from one EU member state to another) were met, the taxable person was still eligible to apply that rate), the Polish regulations were modified and the requirement to provide the acquirer's EU VAT number on the invoice as a substantive requirement for eligibility to apply the rate of 0% was removed (the provision of that number is now a formal requirement, i.e. an essential part of the invoice).

The amended EU provisions impose the obligation on the acquirer to provide its EU VAT number as a requirement for eligibility to charge VAT at the rate of 0%. If the acquirer's EU VAT number is not stated on the invoice, the supply will have to be regarded as a domestic supply in Poland. 

However, the provisions do not make it clear how the EU VAT number should be provided by the acquirer. A useful document when interpreting the new provisions may be the Explanatory Notes of the European Commission – "Explanatory Notes on 2020 Quick Fixes” (GFV No. 89), ("European Commission's Explanatory Notes"). According to the draft Explanatory Notes, if the acquirer's EU VAT number is stated on the invoice, it will be sufficient proof that the number has been provided to the vendor.

The European Commission's Explanatory Notes read that if the acquirer is in the process of obtaining an EU VAT number when the invoice is issued by the vendor, the vendor will have to apply a domestic VAT rate. When the acquirer is issued an EU VAT number, the vendor will have the right to correct the invoice.

It should also be remembered that the application of a domestic VAT rate (because the acquirer has no EU VAT number) will not cancel the acquirer's potential obligations to account for the intra-Community acquisition in the member state of destination.

Another substantive requirement for eligibility to apply the VAT rate of 0% for intra-Community supplies is for the vendor to include the transaction in its recapitulative statement. The law as it is today requires intra-Community transactions to be included in the recapitulative statement. However, no errors or deficiencies in this regard affect the vendor's eligibility to apply the rate of 0%. When the law is amended as proposed, if the vendor's recapitulative statement contains an error, the vendor will be subject to the penalty of having to apply a domestic VAT rate. This may be avoided, as an exception, if the taxable person duly explains, in writing, the error to the head of the relevant tax authority.

The document with the reasons for the proposed changes to the VAT Act refers to the following examples of situations where tax authorities will consider the vendor's explanation as due:

• the vendor has included the intra-Community supply in its recapitulative statement for an incorrect period;
• the vendor has erroneously declared the value of the supply and that error was intended;
• the vendor erroneously provided the acquirer's invalid tax identification number, e.g. the acquirer's tax number was changed as a result of the acquirer's restructuring;

The same situations are referred to in the draft Explanatory Notes of the European Commission. 

Agnieszka Smolińska-Wiśnioch, Director in the VAT Team at KPMG in Poland