Export invoice and its significance in the e-commerce industry

What is an export invoice?

An export invoice is a document issued for an export transaction. It is essential for administrative and tax purposes, such as customs formalities.

Definition of goods export

According to Article 2, Point 8 of the VAT Act:

“The delivery of goods sent or transported from the territory of the country outside the territory of the European Union by:

1. (a) the supplier or on their behalf, or
2. (b) the buyer with a registered office outside the country or on their behalf, excluding goods exported by the buyer themselves for the purposes of equipping or supplying recreational ships, tourist aircraft, or other transport means used for private purposes,— if the export of goods outside the EU is confirmed by the relevant customs authority as defined by customs regulations.”

Direct and indirect goods export

Goods export can also be classified into direct and indirect exports. This distinction determines who ultimately has the obligation to issue the export invoice.

1. Indirect Export – In this type of export, the seller (exporter) assigns the export of goods to another VAT taxpayer within the EU. In this case, the contractor takes responsibility for logistical issues, customs formalities, and the necessary documentation.
2. Direct Export – This occurs when the seller (exporter) is responsible for organizing the transport and final export of goods from the territory of an EU Member State outside the EU. The exporter, in this case, is also responsible for customs formalities and the necessary documentation, including issuing the export invoice.

Export of goods and the 0% VAT rate

Although an export invoice pertains to the export of goods, it is not a document that confirms the goods’ departure from EU territory. Such confirmation is required for the seller to apply the 0% VAT rate on the export invoice.

It is essential to submit this confirmation before the deadline for filing the VAT return for the period in which the goods were exported to apply the 0% VAT rate in the VAT declaration.

Who and when must issue an export invoice?

An export invoice is issued when the documented transaction meets the following conditions:

• The seller is a VAT taxpayer;
• The seller possesses an EORI number;
• Customs clearance of the goods takes place;
• The goods leave the territory of the European Union.

The obligation to issue an export invoice lies with the seller in the case of direct export or with the contractor in the case of indirect export.

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How to issue an export invoice?

Export invoices must be issued within specific deadlines and include particular information. Additionally, an export invoice concerns goods for which customs clearance has already been reported to the customs office.

Moreover, this document must be accompanied by a confirmation of the goods’ export outside the EU, such as the IE-599 message in Poland, enabling the application of the 0% VAT rate.

Mandatory information on an export invoice

Mandatory details that must be included on an export invoice are:

• Unique invoice number;
• Date of issuance;
• Exporter and importer details: company names, addresses, EORI numbers, and VAT numbers (if the seller is a supplier and/or the client is a business);
• Value and description of the goods: quantity, unit of measure, and unit price of the product;
• Currency.

The description of the goods must match the description provided to the customs office.

Optional additional information may include:

• Payment terms;
• Export delivery deadline;
• Reference number;
• Applied Incoterms rule;
• Product HS code.

Export invoices are issued under the same principles and include the same elements as standard VAT invoices. Additional elements like Incoterms conditions can be added but are not mandatory.

Deadlines for issuing an export invoice

The deadline for issuing an export invoice depends on the timing of payment or delivery:

Export invoice issue deadline- Payment after delivery

If payment occurs after the delivery of goods, the export invoice must be issued by the 15th day of the month following the month in which the delivery was made.

Export invoice issue deadline – Payment before delivery

For prepayment (partial or full) before export delivery, the export invoice must be issued by the 15th day of the month following the month in which the payment was made.

Language of the export invoice

An export sales invoice can be issued in any language. It does not have to be Polish and can, for instance, be in English or any other language, such as the official language of the buyer’s country.

Correction of an export invoice

If errors appear on an export invoice, the entrepreneur must issue a correction. However, since the invoice concerns goods export, the issuer is not required to have confirmation of the corrective invoice, and this does not affect the settlement period of such a correction.

Export invoice vs. accounting invoice

It is crucial to note that an export invoice is not the same as an accounting invoice. An export invoice must include specific information required for export, including confirmation of goods export, and is indispensable for customs clearance.

If an export invoice is mistaken for an accounting invoice, exported goods may be detained at customs.

Export invoice in the e-commerce industry

In e-commerce, goods export is becoming increasingly common, especially in international sales to non-EU countries. In such cases, the export invoice plays a crucial role, not only as a document required for customs clearance but also as proof of the transaction necessary for applying the 0% VAT rate.

For online sellers, it is essential to understand that an export invoice must be precise and comply with the applicable regulations, as errors can result in delivery delays and potential tax issues.

Export invoice and its importance in e-commerce – Summary

The export invoice is an integral part of any export transaction in the e-commerce industry, especially for the sale of goods to non-EU countries. Its proper issuance significantly facilitates customs clearance and serves as proof for applying the 0% VAT rate in later VAT settlements. Sellers should ensure that the invoice is complete, complies with regulations, and contains all necessary information, including proof of goods export.

If you operate in the e-commerce industry within the EU or the UK and find VAT, VAT OSS, or accounting issues challenging, we are here to help! Schedule a consultation, outline your concerns, and our specialists will handle the rest!