New obligations for importers may arise as of 1 May 2019
The Ministry of Finance published on 3 January 2019 new guidelines concerning customs duty which will lead to a modification in the rules of cooperation between customs agencies and importers. This poses a considerable challenge to them. The guidelines concern simplified VAT settlements as well as the manner of representation.
The guidelines refer to the amended provisions of the Union Customs Code, for which a transition period has been established until 1 May 2019.
The Customs Agency that is a direct representative of a taxpayer will no longer be in a position to offer them cost-free VAT settlements on imports. Such solutions can only be offered by agencies acting as indirect representatives. Hence, they will be required to adopted the responsibility for customs and tax liabilities. The amended provisions will come into force on 1 May 2019. It is then that the transition period for the application of the amended Union Customs Code provisions will expire.
Taxpayer importing goods is required to file a customs declaration, pay the customs duty and VAT within 10 days. Then, they file VAT returns in which import VAT is deducted. Many importers apply the simplified procedure under Art. 33a of the VAT Act. According to the procedure, the tax is not paid and entered on a customs declaration after the import of the goods, but rather only in a relevant VAT return.
In order to be eligible for the procedure, the following conditions must be met:
- One must have the status of the so-called authorised economic operator (AEO) or
- have imported goods under the simplified customs procedure for which one has a permit and/or a signed agreement with a customs agency that holds such a permit. The VAT Act allows a permit to be shared with a client where the agency is their direct or indirect representative. By contrast, under the new guidelines of 3 January 2019, only an agency that is an indirect representative will be entitled to lend the simplified procedure to its clients.
Certain taxpayers who have cooperated with an agency without holding own permits will be forced to change the form of cooperation into indirect representation. However, not every agency may agree to that. A direct representative carries out the import of goods on behalf and for the client, whereas an indirect one - on its own behalf but for the client. An indirect representative is jointly and severally liable with the taxpayer for the import liabilities, including customs and VAT liabilities. Thus, an agency can be held liable for customs-related liabilities.
In practice, the tax authorities often seek payment from an agency first whenever problems arise with enforcement of liabilities. For this reason, may agencies refuse to be jointly and severally liable with clients.
There are three options open to the taxpayers not having permits for the simplified procedures:
- amend their agreements with the agencies and/or
- obtain an own permit for the simplified procedure, and/or
- obtain the status of an authorised economic operator (AEO).
In the two latter cases, the imports can still be carried out by the customs agency acting as a direct representative for the client.
However, the procedure for obtaining an AEO status takes a minimum of half a year, whereas seeking a simplified procedure permit may take approx. 4–6 months.
Given that not much time has been left before 1 May, both the agencies and importers must promptly work out new cooperation rules in the transition period.
Paulina Andrzejczyk, Tax Consultant, ATA Tax Sp. z o.o.
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