Picture from TAAC's collection "Blue" Jacek Żwiryn 2011

Intra-community supply of goods (IDG) and chain transactions

The EU regulation
Intra-community supply of goods (IDG) and chain transactions

Documentation of intra-community supply of goods (IDG) – what kind of documents should be obtained to avoid a risk of challenging a 0% rate by the tax authorities?

Under council implementing Regulation (EU) 2018/1912 (hereinafter referred to as “EU Regulation”) of 4 December 2018 amending Implementing Regulation (EU) No 282/2011 as regards certain exemptions for intra-Community transactions (OJ L 311, 2018) starting from 01.01.2020, the rules for documentation of IDG have been aligned throughout the European Union. It shall be presumed that goods have been dispatched or transported from a Member State to a destination outside its territory but within the Community, if the precise conditions for documenting transactions are met.

The EU Regulation identifies two categories of documents. The first one (category A) contains documents relating to the dispatch or transport of the goods, such as a signed CMR consignment note, a bill of lading, an airfreight invoice or an invoice from the carrier of the goods. 

The second group of documents (category B) includes:

  1. an insurance policy with regard to the dispatch or transport of the goods, or bank documents proving payment for the dispatch or transport of the goods; 

  2.  official documents issued by a public authority, such as a notary, confirming the arrival of the goods in the Member State of destination; 

  3.  a receipt issued by a warehouse keeper in the Member State of destination, confirming the storage of the goods in that Member State.

  1. Transport is carried out by the vendor or by a third party acting on his behalf

In order to take the presumption vendor is obliged to:

  1. indicate that the goods have been dispatched or transported by him or by a third party acting on his behalf, and

  2. be in possession of:

  1. at least two items of non-contradictory evidence referred in Category A;

  2. any single item referred in Category A together with any single item of non-contradictory evidence referred in Category B confirming the dispatch or transport which were issued by two different parties that are independent of each other, of the vendor and of the acquirer.

  1. Transport is carried out by the acquirer or by a third party acting on his behalf

In order to take the presumption vendor is obliged to be in possession of the following documents:

  1. a written statement from the acquirer, stating that the goods have been dispatched or transported by the acquirer, or by a third party on behalf of the acquirer, and identifying the Member State of destination of the goods; that written statement shall state: the date of issue; the name and address of the acquirer; the quantity and nature of the goods; the date and place of the arrival of the goods; in the case of the supply of means of transport, the identification number of the means of transport; and the identification of the individual accepting the goods on behalf of the acquirer; and

  2. the documents described in point I.2.

  1. Transport is carried out by the vendor using the own means of transport or by the acquirer – the contentious issues

Some difficulties could cause by the collection of the necessary documents required to use the presumption, if case of using the own means of transport by the vendor or the acquirer. In such a situation, the supplying entity – depending on a particular transaction – may not have an invoice from the carrier of the goods or a signed CMR consignment note issued by an independent entity. In the situation described above may be difficult to use the presumption referred to in the EU Regulation.

However, we still have the national’s legislations – art. 42 sec. 1-3 of the goods and services tax act. 

Pursuant to the article 42 sec. 1 of the goods and services tax act one of the conditions of taxation of IDG at a 0% tax rate is to be in possession by the taxpayer – before the deadline for the submission of the tax return for the given settlement period –  in his documentation any proofs, that the goods which are subject of intra-Community supply of goods have been removed from the territory of the Country and delivered to the acquirer in the territory of a Member State other than the territory of the Country.

Also in this case, the polish legislator indicates the need to be in possession any proof of delivery received from the carrier. However, he also indicated a catalogue of documents which may be used to prove that goods were exported, in the situation when the subject of intra-Community supply of goods, is performed directly by the taxpayer who effects such supply or by the acquirer, using the taxpayer’s or the acquirer’s own means of transport. These include: 

  1. specification of individual pieces of the cargo;

  2. other document containing data necessary to identify, in particular, the entities and the subject of the transaction and confirming its delivery to the destination country:

The use of such documents also authorises the taxpayer to apply the 0% VAT rate to an intra-community supply of goods but – in contrast to the EU Regulation, does not create a presumption that the goods have left the territory of Poland.

  1. The new regulations by applying a rate of 0% to IDG

In accordance with the Council Directive (EU) 2018/1910 of 4.12.2018, implemented in the Polish legal system on 1 July 2020, by applying a rate of 0% to IDG:

1) the acquirer is obliged to provide the identification number of the supplier in order for him to apply the 0% rate for intra-Community supply of goods and

2) it is considered necessary to submit a correct recapitulative statement however, the taxpayer will be able to apply the 0% rate if he explains the infringement to the head of the tax office (in writing).

Chain transactions – changes introduced with the quick fix package

Chain transactions are characterized by the fact that at least three entities take part in the supply of goods. These subjects carry out the supply of the same goods in the manner that the first one releases the goods directly to the acquirer who is the last in order. The dispatch or transport of these goods shall be assigned to only one supply (transported goods supply).


From January 1, 2020 Poland was obliged to implement the so-called the quick fix package resulting from the EU Council Directive 2018/1910 of 4.12.2018 amending Directive 2006/112 / EC as regards the harmonization and simplification of certain provisions in the system of value added tax concerning taxation of trade between Member States. This has been done by the Act of May 28, 2020 amending the Act on corporate income tax, the Act on tax on goods and services, the Act on the exchange of tax information with other countries and certain other acts, which comes into force on July 1, 2020. The amendment concerns – among others – Art. 22 of the Act on tax on goods and services.

The entry into force of the amendment results in the introduction of separate transport or dispatch assignment rules for the situation where the goods are transported from the territory of one Member State to the territory of another Member State and for other cases, which are discussed below by way of examples.

  1. The rules for assigning transport in a chain transaction when goods are dispatched or transported from one Member State to another Member State

For the purposes of applying the new rules, the concept of ‘intermediate operator’ has been introduced. An intermediate operator means a supplier within the chain other than the first supplier in the chain who dispatches or transports the goods either himself or through a third party acting on his behalf. The intermediate operator cannot therefore be the first supplier or the last acquirer in the chain transaction. The intermediate operator plays a key role in a chain transaction, because the dispatch or transport shall be ascribed only to the supply made to the intermediary operator (as a rule) or the dispatch or transport shall be ascribed only to the supply of goods by the intermediary operator (exceptionally). If there are more than three entities in a chain transaction, more than only one subject can potentially become the intermediate operator. Then, determining which of them meets the conditions for recognition as an intermediate operator requires the examination of contracts and transaction documentation.

If the dispatch or transport is organized by the first or last subject in the transaction chain, then the general principles referred to in Art. 22 paragraph 2 of the Act on tax on goods and services shall be applied.

  1. An intermediate operator has not been registered for intra-Community transactions in the Member State from which the goods are dispatched or transported and has not communicated to his supplier the VAT identification number issued to him by the Member State from which the goods are dispatched or transported

Where the same goods are supplied successively and those goods are dispatched or transported from one Member State to another Member State directly from the first supplier to the last customer in the chain, the dispatch or transport shall be ascribed only to the supply made to the intermediary operator (Art. 22 paragraph 2a of the Act on tax on goods and services).

  1. An intermediate operator has been registered for intra-Community transactions in the Member State from which the goods are dispatched or transported and has communicated to his supplier the VAT identification number issued to him by the Member State from which the goods are dispatched or transported

  1. In case, where the same goods are supplied successively and those goods are dispatched or transported from one Member State to another Member State directly from the first supplier to the last customer in the chain, and the intermediate operator has communicated to his supplier the VAT identification number issued to him by the Member State from which the goods are dispatched or transported, the dispatch or the transport of goods are assigned to the supply carried out by the intermediate operator. Rules for assigning transport in a chain transaction when goods are dispatched or transported from one Member State to another Member State and the dispatch or transport has been organized by the first supplier or by the last acquirer in the chain

In a situation where the dispatch or transport of goods is organized by the first supplier in the chain of goods, the dispatch or transport of goods shall only be assigned to the transaction in which the first supplier has participated – to the delivery made by the first supplier. Therefore, if, as part of a chain transaction involving entities A, B and C and , A has organized the dispatch or transport to C, then the transport shall be assigned to the transaction between A and B. It will be an intra-Community supply of goods. The transaction between B and C shall be taxed in the country where the transport of goods ends.

The last acquirer in the chain transaction also cannot be the intermediate operator. He never meets the condition to be a supplier in the chain, referred to in the Art.. 22 paragraph 2d of the of the Act on tax on goods and services. Therefore, if the last acquirer organizes the dispatch or transport of goods, the transport or dispatch can only be assigned to the delivery carried out to the last entity in the chain.

  1. Rules for assigning transport in a chain transaction when goods are dispatched or transported from the domestic territory to the territory of a third country
  1. The transport has been organized by the acquirer who also carries out the supply of goods

In the case when goods are dispatched or transported from the domestic territory to the territory of a third country and The transport has been organized by the acquirer who also carries out the supply of goods, it shall be considered that the dispatch or transport is assigned to the supply carried out for that acquirer unless it results from the conditions of the supply that the dispatch or transport of the goods shall be assigned to his supply.

  1. The transport has been organized by the first supplier or the last acquirer in the chain

As a general rule, in the case when several subjects carry out the supply of the same goods in the manner that the first one releases the goods directly to the acquirer who is the last in order, the goods being dispatched or transported, then the dispatch or transport of these goods shall be assigned to only one supply.

In the situation, when the transport has been organized by the first supplier of goods in the chain, the transport of goods shall assigned to the delivery made by the first supplier. It is “the transported goods supply” (export of goods). The place of taxation of the transaction carried out between B and C shall be located outside the EU. The transaction is not subject to VAT.

However, if the transport has been organized by the last acquirer in the chain of goods, then “the transported goods supply” is the supply carried out for that entity. The transaction made between A and B is subject to taxation within the territory of the country as a domestic transaction subject to VAT. The transaction carried out between B and C shall be reported as an export of goods, which implies for entity B the need to register in Poland for VAT purposes.

The lack of proper application of the new regulations may result – in particular – in:

  1. questioning the 0% rate for carried out intra-Community supply of goods,

  2. incorrect identification of the place of taxation and lack of registration for the purposes of VAT,

  3. imposing an additional tax obligation,

  4. the obligation to pay the increased default interest rate equal to 150 per cent of default interest rate.

For more information on the changes described above, please contact us.

*** This information does not constitute a legal advice.***

This newsletter is available as pdf:

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