Tax authorities very often carry out controls on taxpayers dealing with scrap metal, stressing that transactions carried out by purchasers and customers are often intended to avoid taxation of sales under the law of 11 March 2004 on tax on goods and services (Journal of Laws of 2004, item 535, hereinafter: VAT Act).
In order to limit this type of action, the current rules indicate that the reverse charge is on the buyer. In practice, this means that the purchaser of the scrap is charging and at the same time deducting VAT from its purchase. The scrap supplier, on the other hand, issues a sales invoice in which it does not show the tax due. Such an invoice should indicate that the taxable person is the purchaser.
This applies only if transactions are carried out between VAT payers. This means that, for example, the sale of scrap to a natural person who does not engage in business is subject to other rules, the taxable person for such a transaction is still the supplier of scrap which must charge VAT due. The supplier should therefore each time ensure that its counterparty is actually an active VAT taxable person.
The tax settlement obligation also arises where the supplier is an active VAT taxable person and the VAT taxable person is exempt from VAT on the basis of Article 113(1)(9) VAT Act. Then the purchaser of the scrap becomes a VAT taxable person liable to settle VAT on the supply of the scrap.
As regards this transaction, it does not benefit from an exemption. Activity of the acquisition of scrap by a taxable person exempt from VAT on the basis of Article 113(1)(9) The VAT Act requires him to issue an internal invoice which will serve to settle the tax due.
It is important, however, that when an invoice is issued without VAT, such sales should be included in the sales records and that the transaction is not subject to VAT at the place of the rate.
It is important in this respect to set the time limit for the imposition of the tax obligation which arises when the goods or services are delivered.
In order to avoid problems during tax checks, it is very important to identify the counterparty to which the delivery is made.