Chain transactions are agreements made between several contractors for the sale of the same goods, but the shipment of the goods will take place only once, from the first supplier to the final customer. The sale of the goods is carried out through at least 3 entities. The first entity sells the goods to the second entity, and the second entity sells it to the third. The goods are transported between the first and last entity involved in the transaction.
Chain transactions are either domestic or international. In domestic transactions, those companies involved in the transaction are located in one country, while the goods move only within that country. International transactions take place between companies located in different countries, and the goods move between two or more countries. If your business is involved in such transactions, we offer support with accounting services.
Simplified procedure and general rules
The simplified procedure is regulated by Article 135 of the VAT Law. It specifies that only the final purchaser is obliged to settle VAT (it is the third purchaser if the transaction is between three entities). It is the final purchaser who settles VAT through WNT (intra-Community acquisition of goods), so the first and second entities are not obliged to pay VAT.
It is necessary that the second taxpayer in the transaction has previously made an intra-Community acquisition of goods before the supply reaches the third entity in the transaction. It is important that the second entity is not doing business in the country where the transportation or shipment of the goods ends. In addition, the second taxpayer in the transaction is expected to have the same VAT identification number as the first and third taxpayers, assigned by the other country where the transport begins or ends. The last taxpayer in the transaction uses that VAT number where the transport or shipment of goods ends. The last entity in the transaction is the one obligated to pay VAT.
Chain transactions under the general rules involve each taxpayer in the chain of transactions having to account for VAT in accordance with the laws of their country. The first VAT taxpayer sells goods to the second entity in the transaction, but the goods are shipped to the third entity, which is the ultimate buyer in the transaction. The first entity settles the intra-Community supply of goods (ITA) in its country. The second entity purchases the goods from the third third entity, and therefore accounts for the intra-Community acquisition of goods (ICT) in its country. It is important to note that the second company must be registered for VAT in Poland. After the purchase, the goods are sold to the third taxpayer and the invoice is issued with a Polish VAT number. The final recipient of the goods receives the goods directly from the first entity, but the goods were purchased from the second entity in the transaction. Like the other entities, the recipient of the goods settles VAT in its own country.
Each of the entities involved in the transaction are required to settle VAT according to the regulations in their own country. Each of the entities involved in the transaction are required to settle VAT according to the regulations in their own country.
Movable and unmovable supply
Movable supply is related to the organization of transportation by a specific entity. The supply is then taxed in the country where the goods are located before transportation or shipment. Only one supply can be considered a movable supply, which means that only one supply can be connected to the movement of goods. Between the entities, intra-Community supply of goods (ITA) and intra-Community acquisition of goods (ICT) are distinguished.
Unmovable supply is related to supplies that precede the physical shipment or transportation of goods. Those supplies that precede an intra-Community supply of goods (ITA) in the chain have a point where the shipment or transportation of the goods begins as their place of delivery. For those suppliers that follow an intra-Community acquisition of goods (ITE) in a chain, the place of delivery is the point where the shipment or transportation of the goods ends.
Text based on: https://poradnikprzedsiebiorcy.pl/-transakcje-lancuchowe-wszystko-co-powinienes-wiedziec
