On 17 February 2020 the Director of the National Revenue Information gave an individual interpretation (ref. 0111-KDIB1-3.4010.621.2019.2.PC) on the issue of correction invoices under the Act on Goods and Services Tax.
As indicated in the application, the Applicant (hereinafter: the Company) provides aircraft engine overhaul services. The remuneration in the transaction in question is calculated on the basis of the costs of providing the services in question, including the costs of materials, spare parts and subcontractor remuneration. The services are performed for foreign entities and therefore for VAT purposes they constitute a supply of services with the place of taxation transferred to the country of the purchaser (according to Article 28b of VAT).
As indicated in Article 106i(1) of VAT, the applicant is required to issue an invoice no later than on the 15th day of the month following the month in which the services were supplied.
In the described facts, it may happen that in some cases the Company will not be able to establish the full cost base for the calculation of remuneration at the time of the invoice, e.g. due to the fact that it will not have all invoices from its subcontractors.
The Company is considering the possibility of issuing an invoice based solely on the costs already agreed and calculated as at the date of invoicing for the services provided, and then issuing a corrective invoice (“in plus”), once all the costs constituting the basis for calculating remuneration for the services provided have been agreed and agreed. At the same time, the Company will exercise the utmost care with regard to meeting and determining the largest possible number of cost components, which will allow for objective calculation of the value of the service at the time of issuing the original invoice.
In view of the above, the Company will be entitled to issue a correcting invoice by making an adjustment increasing the revenue (“in plus”) in the settlement period in which the correcting invoice will be issued, because in the described case there will be no situation indicating incorrect documentation of the actual state of affairs when issuing the original invoice; thus, it will not be possible to define the original invoice issued by the Company as erroneous or obviously mistaken.
In addition, the amount increasing revenue resulting from the issued correction invoice should be converted into PLN using the average exchange rate announced by the National Bank of Poland for the last business day preceding the date of issue of the original invoice due to the fact that the correction invoice strictly refers to the state of affairs in the past. The correcting invoice should, in addition to the corrected elements, reflect the condition in which the original invoice was issued. Thus, the Director of the National Revenue Administration did not agree with the taxpayer’s standpoint that the amount increasing the revenue resulting from the adjusted invoice should be converted into PLN using the average exchange rate announced by the National Bank of Poland for the last business day preceding the date of issue of that invoice.
Autor: Beata Rawa ? Transfer Pricing Manager