Supreme Administrative Court on Chain Transaction in Trade with Third Countries (Export)

Supreme Court Ruling on Chain Transactions: On January 28, 2025, the Supreme Administrative Court ruled that in chain transactions involving exports, the supply from a Polish company (entity A) to a buyer (entity B) is considered a domestic supply rather than an export. This is because the transfer of ownership occurs in Poland when the goods are received by the carrier arranged by entity B, which is responsible for transportation.
Interpretation of the VAT Act: The Court emphasized that the interpretation of Article 22(2a) of the VAT Act regarding mobile supplies is complex and can lead to different conclusions based on the facts of the case. The judgment clarified that the decisive factor for VAT classification is where the right to dispose of the goods is transferred, not solely the Incoterms used.
Implications for Taxpayers: The ruling highlights the ambiguity surrounding VAT treatment of chain transactions involving exports, particularly when intermediaries handle transportation. Companies must carefully analyze these transactions to avoid misclassification that could lead to tax arrears and ensure compliance with VAT regulations, as incorrect assumptions may result in applying the domestic VAT rate instead of the 0% export rate.