Calculation of VAT for services in Poland and invoicing an Offshore Company
Category: Business and Money > Accounting
Asked by: dajb1874-ga
List Price: $100.00
25 Aug 2006 03:32 PDT
Expires: 30 Aug 2006 11:47 PDT
Question ID: 759382
Company X who is registered in Poland as a Travel Agent provides activities (games, sports etc) for foreign clients visiting Poland by subcontracting suppliers in Poland. Company X then invoices the clients. Company X is unclear how to calculate VAT on the invoice for clients, the clients are all tourists but it is unclear whether the activities can be classed as a tourism service or not in Polish law? We understand there are two possible ways of calculating the VAT: 1. COMPANY X adds vat on their margin at 22% and does not reclaim any vat included in the buy price, which could be at 0, 7 or 22%. 2. COMPANY X adds 22% to the to sell price and reclaims the VAT included in the buy price which could be at 0, 7 or 22%. Which is correct? Or is there another way? (The buy price is the price X pays supplier and the sell price is what the client is charged) The next question is, if an offshore company supplies the clients to us then does company X still charge VAT in the invoice they issue to the offshore company (Gibraltar)? (Company X buys the activity from a local supplier and then sells it on to the offshore company for a profit).
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Re: Calculation of VAT for services in Poland and invoicing an Offshore Company
From: myoarin-ga on 25 Aug 2006 10:08 PDT
I think the answer is clear-cut, your alternative no. 2 is correct. Your final question, it seems, would fall under the 0% VAT as an "Intra-Community supply of goods", but I have some doubts about this, as you and the local supplier of the touristic activity remain in Poland, i.e., not a simple export of goods. Even if the Gibraltar entity is selling the activity, there is an actual or implicit contract for the service/goods to be provided in Poland. As you say, "the offshore company supplies the clients to us". As a tourist, I have seen this documented with vouchers issued by the offshore (Gibraltar) entity for the services to be provided locally (in Poland). I have no idea whether this falls under VAT - or maybe escapes the tax authority's notice. Please note that this is a free comment and NOT an official answer to your question, which only a Google Answers Researcher with a blue user name can post. And, of course, anything posted here is not legal or professional advice, as you can read in the disclaimer below.
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