Changes in the operation of the warehouses – a warehouse called-off stock in the territory of the country from 1 January 2020

To 31 December 2019 All EU Member States are obliged to implement their legislation Directive 2018/1910 to 4 December 2018 1 , that changes Directive 2006/112 2 with regard to the harmonisation and simplification of certain provisions in the value added tax system concerning the taxation of trade between Member States.

one from changes to the EU system of this tax is the procedure for call-off stock warehouses. This solution is intended to simplify and harmonise the use of such storage facilities in cross-border trade across the European Union.

Currently, at the stage of the agreement is the bill of 7 October 2019 on the amendment of the Tax on Goods and Services Act and the Act - Tax Penal Code 3 , implementing provisions Directive 2018/1910.

The purpose of this study is to approximate the changes proposed by the legislator and to identify significant differences in relation to the law on 11 March 2004 on tax on goods and services 4 Consignment warehouse procedures.

The current provisions on the Consignment Warehouse

Until then, Directive 2006/112 had contained no provisions directly addressing consignment warehouses. For this reason, the Union States applied different rules for the taxation of transactions using bill-off stock. In the documents of the EU's VAT Working Groups, Member States' approaches were grouped in four basic models[5].

Model first, for countries such as Germany, Greece or Malta, there is no provision for specific simplifications. The supplier, when moving his own goods to a consigning warehouse in another country, must demonstrate the WDT in his country and WNT in the country of storage.

Collection of goods from the warehouse by the purchaser is treated as a domestic transaction. Therefore, the supplier must demonstrate two transactions in the buyer's country, which entails the obligation to register for VAT purposes.

second The model used in countries such as Belgium and Portugal differs from first the fact that, following an intra-Community transaction (non-transactional shipment of goods), the local supply is made on a ‘reverse charge’ basis.

third the model assumes that the intra-Community transaction takes place as soon as the goods are delivered to the consigning warehouse. At this point, the supplier shall demonstrate the intra-Community supply of the goods and the buyer of the intra-Community acquisition of the goods. There is no need to show local delivery in this model.

This solution is applied, inter alia, in Bulgaria, Cyprus or the Czech Republic. fourth Model is used in 11 European Union countries, including France, Italy, Austria and Poland. It assumes that an intra-Community transaction takes place only when the buyer collects the goods from the consigning warehouse.

The transfer of goods to the warehouse itself does not have any tax consequences. At the same time four It was accepted that the non-collection of goods from storage within a certain time period would require the identification of intra-Community transactions.

In Poland, the provisions on consigning warehouses apply in the VAT Act from 1 December 2008 The adopted design refers to call-off stock warehouses where goods are stored on order of a specific, individualised buyer.

The essence of the Polish solution is that the supplier who introduces the goods to a consigning warehouse located in the territory of Poland is not obliged to register in Poland as a VAT taxable person or to settle intra-Community acquisitions of goods, and then tax on domestic sales. The transfer of goods by the taxable person of value added tax or on his behalf, to a consigning warehouse operated by the purchaser in the territory of Poland for the purpose of their delivery and their delivery shall be considered as intra-Community acquisition of goods with the warehouse owner.

Therefore, the foreign supplier does not need to register in Poland for VAT purposes. It shall show only the intra-Community supply of goods in its country. The intra-Community acquisition of goods in Poland will be demonstrated by the Polish buyer. Of course, the institution of the Consignment Magazine will also be used in reverse situations, in which the Polish entrepreneur supplies goods to a warehouse corresponding to the Consignment Magazine in another Member State of the European Union.

second an important advantage of applying the consigning warehouse procedure is the postponement of the tax obligation at the time when the goods are taken from the warehouse by the purchaser, unless the FV has previously been issued[6]. Indeed, the transfer of goods alone does not create a tax obligation on the buyer. The Polish construction of the warehouse was based on the following assumptions:

• 1) the goods are sent to one, the known buyer;
• 2) the goods located in Poland remain the property of a foreign company;
• 3) the cost of storage and the risk of loss of goods shall remain with the foreign company;
• 4) the Polish purchaser collects the goods from the warehouse as necessary;
• 5) the ownership of the goods passes to the Polish buyer when the goods are removed from the warehouse[7].

However, the applicability of this simplification is subject to the requirements indicated under Article 12a(1) the VAT Act 8 .

Changes in the operation of the warehouses 1 January 2020

In particular, the proposal under discussion envisages changes in the VAT Act, to implement Directive 2018/1910 and provides for adaptation of the provisions the VAT Act amendments resulting from Council Implementing Regulation (EU) Directive 2018/1912 to 4 December 2018 amending Implementing Regulation (EU) No Regulation (EU) 282/2011 for certain exemptions relating to intra-Community transactions[9]. Directive 2018/1910 to be implemented in the national legal order to 31 December 2019

Implementing Regulation Directive 2018/1912 is applied directly from 1 January 2020 It is therefore proposed to repeal the regulations on consigning warehouses currently contained under Article 2(27c) and 27d, Article 12a, Article 20a and Article 20b the VAT Act At the same time in Chapter II after Chapter II 3 Chapter 3a ‘Relocation of goods in the call off stock storage procedure into the territory of the country’ and 3b ‘Relocation of goods in the call off stock storage procedure into the territory of a Member State other than the territory of the country’ are inserted.

The conditions for applying the call-off stock storage procedure in the country have been modified[10]. first of significant changes to the VAT Act in a call off stock storage procedure within the territory of the country, the procedure for goods intended not only for production or service activities but also for commercial use.

Conditions for the destination of goods contained in the repealed Article 12a(1)(2) Not in the new Article 13a(2) a revised bill. This provision lays down new conditions which are necessary to comply with the call-off stock storage procedure. This is undoubtedly a good change.

The restriction on the destination of goods exclusively for production and service activities was one from obstacles to wider use of the institution of the Consignment Magazine.

‘Meanwhile one from the basic purposes for which call-off warehouses are used outside the production activity, it is precisely the creation of local distribution centres where the distributor (and therefore the entity for which the goods are moved) has access to goods which it distributes to the local (although not necessarily exclusively domestic) market without bearing the costs and risks of storing them.

The introduction of the possibility of a simplified procedure is undoubtedly an incentive to create such centres – this procedure significantly reduces administrative responsibilities without creating any risk to the budget." 11 .

second a significant change is the departure from the model in which the entity operating the call-off stock warehouse is the taxpayer who is also the buyer of the goods. This means that from 1 January 2020 Call-off stock warehouses will be able to be entities third, professionally engaged in such activities. This is an important change, because at present not every magazine is considered a consignive magazine.

Definition of consigning warehouse included under Article 2(27d) the VAT Act provides that this warehouse means the taxable person registered as an EU VAT taxable person in question under Article 97(4), the place of storage in the territory of the country of goods belonging to the taxable person of value added tax transferred by him or on his behalf from the territory of a Member State other than the territory of the country to the place where the taxable person registered as an EU VAT taxable person who holds the goods collects them and the transfer of the right to dispose of those goods as the owner takes place at the time of collection.

When analysing this legal definition, it must be concluded that the Consignment Magazine has the following characteristics:

• – the goods moved to that warehouse are intended for a particular buyer;
• – the goods belonging to the taxable person are transferred from a Member State other than the territory of the country to the territory of the country;
• – postponement at the time of transfer of the right to dispose of the goods like the owner – the tax obligation does not arise when the goods are moved to the warehouse, but when the goods are removed from the warehouse.

The above definition is completed by the definition of the consigning warehouse owner, contained under Article 2(27d) the VAT Act That provision provides that the holder of the warehouse is a taxable person who stores the goods in it and takes them from the warehouse. This means that one from the conditions under which the warehouse is considered a warehouse, it is the taxable person's tax on goods and services registered as an EU VAT taxable person.

This condition is most controversial. It follows that, in order to be able to apply the simplified procedure, the warehouse understood as a separate storage place must be in the possession of that taxable person. Thus it is impossible to use storage facilities of persons third. The entity which operates the warehouse must be at the same time the purchaser of the goods stored in it.

This condition is an important obstacle to the use of the institution of the warehouse of consignation, especially by Polish taxpayers who move goods to warehouses in other countries of the European Union. It turns out that intra-Community movements of goods must go to a place corresponding to the Consignment Magazine.

Therefore, the assessment of the criteria necessary to consider the place of storage of goods as a storage warehouse should always be carried out on the basis of Polish legislation. the VAT Act, Not the rules of the country of storage.

This position is consistently maintained by tax authorities.

In the personal interpretation of the Director of the Tax Chamber in Katowice from 17 March 2016 12 indicated that: ‘the warehouse must not be operated by the seller or entity third, but only by the final buyer of the goods. Consignment warehouse operator is also the buyer of goods stored in the warehouse’ 13 .

The bill no longer provides for such a reservation. Thanks. Directive 2018/1910 the rules on call-off stock warehouses will be harmonised throughout the European Union.

This will make it significantly easier for both taxpayers to supply value added tax to call-off stock warehouses in the territory of the country and Polish taxpayers wishing to use the call-off stock warehouse procedure in the territory of another Member State.

Another condition which is explicitly included in the draft law is that the purchaser should be registered as an EU VAT taxable person at the time of commencement of dispatch or transport of goods. At this point, the value added tax taxable person must also know his/her name and NIP number preceded by the PL code[14].

The condition for the identification of a particular buyer has been combined with the supplier's registration obligations. Any movement of goods to a warehouse in Poland will have to be recorded in the relevant records 15 , a the NIP number of the Polish buyer reported in the summary information[16]. The above two conditions will allow for greater transparency and control of goods sent under the call-off stock storage procedure.

A significant change will also take place when the tax obligation for intra-Community acquisition of goods transferred to the call-off stock warehouse is recognised. They now regulate Article 20b the VAT Act, which by day 1 January 2020 will be repealed.

Consequently, the tax liability for WNT to call-off stock warehouse will be based on general, defined principles under Article 20(5) the VAT Act, and therefore, when the taxable person issues the invoice, the value added tax, no later than 15. the day of the month following the month in which delivery was made to the buyer.

Certain modifications have been made to the provisions governing specific situations of tax liability.

New Article 13d(1) The draft law provides that if during the period 12 months after the arrival of the goods in the call-off stock warehouse any of the conditions entitling the use of the simplified procedure (referred to in the added to the Act) shall cease to be fulfilled Article 13a(2) or Article 13c) it is considered that the non-transactional transfer of the taxpayer's own goods of value added tax in line with the WNT as soon as this condition is no longer fulfilled.

Article 13d(2) the VAT Act provides that in the case of a supply to another entity other than the purchaser or the taxable person replacing it, the conditions for the application of the call -off stock storage procedure shall be deemed to cease to be fulfilled immediately before such operation.

This means that, on the date of delivery by the taxable person of the value added tax for that other entity, the call-off stock procedure does not apply.

In turn Article 13d(3) provides that when goods are moved from call-off stock warehouse located in the territory of Poland in the territory of the State third or the territory of a Member State other than the Member State from which the goods were originally moved, immediately before the commencement of that shipment or transport, the conditions for the call-off stock storage procedure are no longer met.

This provision concerns a situation in which no delivery was made to the buyer or the taxable person replacing it in Poland and the goods from the Polish warehouse were sent or transported to the State third or a Member State other than the Member State from which they were originally moved.

An identical effect will be when goods in storage are destroyed, lost or stolen (Article 13d(4)).

The conditions for the use of the call-off stock procedure shall then cease to be fulfilled on the date on which the goods were destroyed, lost or stolen, or if such a date is not possible, on the date on which they were found to be destroyed or missing.

Currently in a situation where the goods have not been removed from storage for a period 24 months, a legal fiction shall be adopted to consider that the following day after that period the goods were collected by the purchaser. This makes it necessary for him to recognise WNT in the territory of Poland.

The supplier will in turn be required to demonstrate WDT in his country[17]. On the other hand, if there is a re-location of goods entered into the warehouse during this period, there will be no tax obligation in both WNT and WDT[18].

The bill provides for a reduction from 24 to 12 months of the maximum deferred tax obligation in case the purchaser does not take the goods out of storage (Article 13e(1)).

At the same time, the expiry of this deadline will result in the obligation for the taxpayer to indicate a value added tax on the non-transactional movement of goods into the territory of the Republic of Poland and, consequently, to register.

On the other hand, where the value added taxable person relocates the goods from the warehouse to the Member State from which they were originally moved, there will be no non-transactional movement of the goods in the territory of Poland.

An additional condition in the form of registration of the return of these goods in the records in question is also an important change in this respect. Under Article 54a(1) implementing Regulations Regulation (EU) 282/2011 in the version applicable from 1 January 2020 19 .

An important novelty is the possibility of another taxpayer replacing the original buyer.

This is a situation in which 12 months from the date of entry of the goods into the warehouse in place of the previous buyer, the taxable person to whom the goods were originally moved and for whom the delivery was to be made, another taxable person is to ‘enter’, and this is to be delivered to him[20].

In order for such a replacement to take place, the taxable person entering the place of the buyer must be registered as an EU VAT taxable person and his data, including NIP, must be known to the supplier at the time of the replacement.

In addition, the value added tax taxable person must indicate in the summary information the VAT number of the Polish taxpayer and register the replacement in the records of goods moved in the call-off stock warehouse procedure. So far, legislation the VAT Act did not foresee this possibility.

The bill also systematized the deadlines for the registration obligations of taxpayers operating call-off stock warehouses. The legislator introduces one 14-day period for:

• – notification to the head of the tax office of running a call-off stock warehouse (14 days from day first entry of goods into storage),
• – call on the head of the tax office to supplement this notice where it contains deficiencies (14 days from the date of receipt of the notification),
• – notice to the head of the tax office of the change of data contained in the notice (14 days from the date of the change).

Notifications shall be made by electronic means of communication in accordance with the model laid down by the Finance Minister Regulation. Chapter 3b of the Act includes the provisions of the procedure for the movement of goods to a call-off stock warehouse in the territory of a Member State other than the territory of the country.[21]. They are a mirror reflection of the procedure of the warehouse located in the territory of Poland and are therefore not analysed in detail.

Summary

The design of the changes in the VAT Act, implementing Directive 2018/1910. The codification of the rules on consigning warehouses throughout the European Union will eliminate the discrepancies in the legislation of the Member States in this field.

This will considerably simplify the clearing system and administrative obligations related to the need to register suppliers in the countries where the warehouses are located.

The main benefit of the amendment the VAT Act The obligation to maintain a call-off stock warehouse is waived directly by the purchaser and the application of the consigning warehouse procedure to goods intended for production or service purposes is restricted.

Both conditions significantly hampered the possibility of using more widely consigned warehouses. An important novelty is also the introduction of an appropriate control mechanism by Member States' tax administrations.

The supplier will have to keep a detailed record of the goods moved in the consigning warehouse procedure to which those provisions apply.

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Source note 8: The movement of goods from the Consignment Warehouse and their subsequent delivery shall be considered as intra-Community acquisition of goods with the Consignment Storekeeper under the following conditions: 1.

the supplier cannot be established as well as a permanent place of business in the territory of Poland and cannot be registered for VAT purposes in Poland; 2. the goods stored in a warehouse must be intended for production or service activities of a consigning warehouse, excluding commercial activities; 3.

leading the consigning warehouse before first the introduction of goods into this warehouse by the taxable person of value added tax, shall be obliged to notify in writing to the head of the tax office of the intention to maintain a warehouse containing: the supplier's data on the shipment of goods to the warehouse of the Consignment and the applicant, the supplier's statement that he intends to carry out the shipment to the warehouse of the goods in question under Article 11(1) the VAT Act; 4.

the Consignment Storer must keep a record of the date and list of the goods entering the warehouse, the date of their collection and the data relating to the return movement of goods not taken from the warehouse.