Company registered for VAT abroad

[QF Accounts]

Our client (Ltd company) is registered for VAT in Poland due to sales and deliveries made there.
All management activities are in UK and registered office is here.
Company has also residance certificate in the UK.
Company issue sale invoice as below
net 1000
vat 23% (polish vat) 230
gross 1230
Which one ? Net or Gross should be treated as General Sale ?
I assume that Gross amount should be account as Sale.
The same with purchases - gross amount.
What is your opinion Guys ?

 

[Lavender2306]

Our client (Ltd company) is registered for VAT in Poland due to sales and deliveries made there.
All management activities are in UK and registered office is here.
Company has also residance certificate in the UK.
Company issue sale invoice as below
net 1000
vat 23% (polish vat) 230
gross 1230
Which one ? Net or Gross should be treated as General Sale ?
I assume that Gross amount should be account as Sale.
The same with purchases - gross amount.
What is your opinion Guys ?

Hi,
Could you clarify your query?
This sale you are talking about, is it about transactions that happen in Poland or U.K.? I assume in Poland, because you are charging Polish standard rate.
Is your question about what the turnover is for accounting records purposes? If yes, again, first I would like to determine the place of the supply.
Thanks

 

[QF Accounts]

Place of supply is in Poland.

 

[Lavender2306]

Place of supply is in Poland.

We established that your UK based client has domestic sales in Poland. So what is your question?
Do you want to know how to account those sales in your client's UK accounts? Thanks.

 

[QF Accounts]

Exactly, because we have opinion from polish vat specialist that sale is taxed for vat purposes in Poland but for Corporation Tax in the UK. So now I dont know which net or gross value should be accounted for CT purposes ?

 

[Lavender2306]

Exactly, because we have opinion from polish vat specialist that sale is taxed for vat purposes in Poland but for Corporation Tax in the UK. So now I dont know which net or gross value should be accounted for CT purposes ?

I don't know for sure, but I would expect that the profit on those supplies is taxed in Poland first and then in the U.K. there will be double taxation adjustment of the corporation tax on the foreign income.

P.S. If you are a professional accountant, as it says in your signature, you should really know these things. Otherwise you are misleading your clients. And you can't even formulate a question. Sorry.
When a trader, unfamiliar with tax and accounting, asks for help, then I can't expect them to understand the basics. But you are providing professional services, at least this is your signature say.

 

[QF Accounts]

I fill that you really dont understand things like company taxation with no establishments abroad. Poland is only place of supply for vat purposes. Company hasnt got any branches in Poland. Moreover company hasnt got any employees in Poland. There are no establishment in Poland to be taxed. As state above company has UK residance certificate.
I just have asked technical question to consult how to treat polish vat.
If you dont know answer for the question just dont reply!

 

[Newchodge]

Yay gal, go for it. When accused of not having the faintest idea of how to run your professional business, just accuse those who know what they are doing of being ignorant. That'll work every time.

 

[STDFR33]

Net.

 

[ADC]

When you say the place of supply is Poland. But they don't have a location in Poland, so are you supplying from a fulfillment centre? Or do you mean you are sending items from the UK to Poland?

 

[QF Accounts]

Yes, they supply from fulfillment centre in Poland.

 

[ADC]

OK is there turnover more than PLZ 150,000?

If the answer is yes then you need to register for and pay the VAT to Poland and the corporation tax to the UK. You use the net (ex. VAT) amount to work out your corporation tax.

If the answer is no then don't register for VAT in Poland you just calculate your corporation tax on the whole amount you charge the customer.

You should really know these things being an accountant, not really a good recommendation, I wouldn't have my signature in the post if I were you

 

[ADC]

By the way I should have mentioned corporation tax is only charged on the net profit of the sale, not the turnover.

 

[Lavender2306]

OK is there turnover more than PLZ 150,000?

If the answer is yes then you need to register for and pay the VAT to Poland and the corporation tax to the UK. You use the net (ex. VAT) amount to work out your corporation tax.

If the answer is no then don't register for VAT in Poland you just calculate your corporation tax on the whole amount you charge the customer.

You should really know these things being an accountant, not really a good recommendation, I wouldn't have my signature in the post if I were you

Hi ADC,
So do I understand you right that in Poland there is a VAT registration threshold for non established traders? As far as I am aware in most EU countries there is no such threshold. You have registration obligation as soon as you start trading or intend to trade.
Thank you.

 

[STDFR33]

Hi ADC,
So do I understand you right that in Poland there is a VAT registration threshold for non established traders? As far as I am aware in most EU countries there is no such threshold. You have registration obligation as soon as you start trading or intend to trade.
Thank you.

With the exception of online sellers to consumers?

 

[UK Contractor Accountant]

The threshold is 160K PLZ for distance selling to Poland.

There is no vat threshold for non resident traders operating from Poland.

 

[Lavender2306]

The threshold is 160K PLZ for distance selling to Poland.

There is no vat threshold for non resident traders operating from Poland.

That is what I think normally would expect in respect of non established traders, a threshold for distance selling, acquisitions, but no threshold for standard or reduced rated supplies. But the ADC's posting suggests that there is a threshold for ST supplies. Let's see what ADC has to say.