It was supposed to be a golden deal. The Polish entrepreneur met a person at the trade fair who claimed to be a representative of an Italian company. After a brief conversation, it quickly moved to business. The result was the shipment of goods produced in Poland to Italy. The problem is that the items went straight into the hands of a criminal.
Fraud in Italian style
The transaction appeared to be well prepared. After checking the counterpart, insuring the transaction, and arranging transport, the Polish company sent the goods to Italy. On the surface everything went well. The shipment reached the specified address, and the senders received documents confirming receipt of the goods. Nothing remained but to wait for the transfer from the Italian counterpart. And here the problem arose, because despite the payment deadline, the money did not reach the Polish company. The insurer then began to investigate why this happened. The answer was surprising. It turned out that the company that was indicated as the transaction party did not participate in it at all. The person with whom the details were negotiated turned out to be a fraudster impersonating a representative of that enterprise.
The case was reported to both Polish and Italian police, but so far there is no positive outcome. The goods were stolen, and the company incurred costs related not only to production but also to shipping the goods. And as it turned out, this was not the only consequence of this Polish‑Italian business.
The treasury is merciless
The entire situation with the loss of goods caused the company to look for a way to stop losing more money on this transaction. This included, among other things, the VAT that should be paid on this goods. To avoid getting into even bigger problems, the company representatives approached the National Tax Information Service (KIS) with a request for an interpretation to check whether in their view the application of a 0% VAT rate is correct. The KIS director stated that it is not. As noted in his interpretation, applying a 0% VAT rate could only occur if the tax were paid by the counterpart in another EU country. Since the goods were taken by a thief, it is known that the tax was not paid, so the tax must be paid by the Polish producer.
The KIS director explained that the regulations allow VAT exemption only in cases of illegal activity, such as drug trafficking. In this case, the production of the goods shipped to Italy is carried out in accordance with the law, so there is no illegal activity on the part of the Polish entrepreneur.
The company that lost the goods can appeal the tax authority's decision to an administrative court. For now there is no information on whether the Polish entrepreneur will take such a step. It is known, however, that the deal that was supposed to bring profit caused huge losses, which include the VAT that the company will have to pay, shipping costs, insurance, and the production of the lost goods.
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