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A single or multiple ICS? The Supreme Administrative Court takes the side of VAT payers.


Transloading at European logistic centres should no longer pose a problem to VAT payers.

The case involved a company making deliveries to, inter alia, a business partner in the UK as part of its business. The company had undertaken to its recipient to maintain a specified stock levels at its warehouse (a logistics centre) located in Belgium, which is operated by a local logistics company. The goods are stored in the logistics centre for a maximum of 3 months and are not subject to any processing whatsoever. They can only be taped, labelled or packaged. The Polish company organises and carries out the shipping of the goods to Belgium as well as covering the costs of storage. The Belgian company releases the goods to the UK recipient based on the data from an electronic system used by the recipient to communicate its intention to collect a specific quantity of goods from the warehouse. The system is also accessible to the Polish company. On the same day, the British company organises shipping from Belgium to the UK, charging the Polish company for its costs and with the latter subsequently issuing an invoice for the goods sold to the UK recipient.

The company has also obtained a decision from a Belgian tax authority whereby there is no obligation to register as a VAT payer in Belgium on account of the nature of the supply.

Under such circumstances, the company asked whether the transaction in question constituted a single intracommunity supply of goods to the UK recipient, and thus – whether it would be taxed at the 0% rate. In its private tax ruling, the Polish tax authority held that such a transaction could not be deemed a single ICS as it consists of two independent transactions, viz.: a non-transactional transfer of own goods from Poland to Belgium (which in the circumstances at issue were to be taxed at the local rate), and subsequently, shipment of goods from Belgium to the UK, which – according to the authority – is taxed under Belgian law. This position was subsequently affirmed by a Voivodship Administrative Court.

However, the Supreme Administrative Court was of a different opinion. According to the NSA, the mere fact that the course of the supply is untypical, i.e. extended in time, does not deprive it of the ICS status.  The NSA indicated that the UK recipient of the goods is identified already at the moment the goods are leaving Poland. A transaction so structured constitutes a single, organised whole and dividing it for tax purposes would be artificial.

In a transaction of this kind, the purchaser acquires the right to manage the goods as an owner (in the economic sense) at the moment the goods are moved to the warehouse, and as a result, the interpretation adopted by the authorities at the lower instances in the proceedings leads to excessive formalism. Both the first-instance authority issuing the ruling and the WSA (Voivodship Administrative Court) were not justified in disregarding the decision of the Belgian administration stating a lack of obligation to register for VAT purposes in Belgium. For according to the NSA, the decision expresses an approval of a simplified approach allowing for the transaction in question to be deemed a single ICS from Poland to the UK.

In economic terms, a transaction so structured constitutes a single, organised whole. At the same time, it utilises a modern supply form using the services of a logistics centre. The NSA’s judgment attests to a profound understanding of the need for simplified VAT settlements that take into account the developing economic life, and as such merits wide support.


Wojciech Jasiński, Tax Consultant, ATA Tax Sp. z o.o.

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