Conditions for applying the 0% VAT rate on the export of goods

The export of goods is subject to a 0% VAT rate, provided that the taxpayer possesses a document that the goods have been dispatched outside the territory of the European Union prior to the deadline for filing the VAT return for the relevant accounting period. According to the VAT Act, such a document may be:

• an electronic document from the export declaration handling system or its printout confirmed by the customs authority.
• an electronic document from the export declaration system received outside the system, provided its authenticity is ensured.
• a written export declaration submitted outside the IT system or a copy confirmed by the customs authority.

A valid export confirmation document also includes the CC599C message generated by the AES (Automated Export System), which enables message exchange between customs offices and businesses within the EU.

In the case of indirect export, the export documentation must also confirm the identity of the goods. If the taxpayer does not have such confirmation in the given period, they may report the sale with the 0% rate in the following period, provided that the document is obtained before the deadline for submitting the return for that period. Otherwise, domestic VAT rates must be applied.

The Act allows for postponing the declaration of export to the next period if the taxpayer holds a customs document confirming the export procedure, recognized as the CC529C message.

Receiving documents after the statutory deadline entitles the taxpayer to adjust the output VAT in the period in which the documents were received. This adjustment involves decreasing the value of domestic sales and the related tax and increasing the value of export sales. The taxpayer does not need to amend the previously submitted return but should make a specific correction in the current tax declaration for the period in which the required documents were received.

Example 1:
Let’s assume the delivery took place on 20 June. Therefore, the taxpayer should declare the export in the SAF-T VAT filefor June.

• If the export confirmation document (CC599C) is not received by  25 July (the deadline for the June return), the export may be reported with the 0% VAT rate in the July return, provided that the document is obtained by 25 August  (the deadline for the July return).
• If CC599C is not received by 25 August, the taxpayer must apply the domestic VAT rate to the delivery.

The option to defer the export declaration to the subsequent period applies only if the taxpayer holds customs documentation confirming that the goods were placed under the export procedure, i.e., the CC529C message. Receiving the CC599C document at a later date allows the taxpayer to correct the VAT in the current period, i.e., reduce previously reported domestic sales by 23% and report the export with the 0% preferential rate (based on Art. 41(9) of the VAT Act).

In summary:

1. Receiving CC599C by 25 July → declare export with 0% in the June return.
2. No CC599C by 25 July, but has CC529C → declare with 0% in July, if CC599C is received by 25 August.
3. No CC599C by 25 August → declare in July with domestic VAT rate.
4. Receiving CC599C later → adjust VAT in the current period, reduce domestic sale (-23%) and report export with 0%.

0% VAT rate on advance payments for exports

As mentioned earlier, the 0% VAT rate applies to the export of goods, provided the exporter holds a document confirming the movement of goods outside the EU. A frequently raised question concerns the VAT treatment of advance payments for goods intended for export. Although the physical export of goods has not yet occurred, the advance payment gives rise to a VAT liability. Therefore, a compromise was introduced: the advance payment may be subject to the 0% VAT rate, provided the export of goods occurs within 6 months following the end of the month in which the payment was received.

Even if the export occurs after this six-month period , the 0% rate can still applied, if justified by the nature of the supply. Examples include complex manufacturing processes, the use of subcontractors, or specific contract conditions that determine the shipping date.

Example 2:
An exporter makes custom, high-tech equipment and starts production only after receiving an advance. The process can take several months and may be delayed. The exporter issues advance invoices with the 0% rate and includes them in the records in the month the advance was received.
If the export happens more than 6 months later, the 0% rate is still applicable if the relevant conditions are met.

“Tax-Inclusive” or “Tax-Exclusive” calculation method?

If the taxpayer does not possess valid export documents that justify applying the 0% VAT rate, the domestic VAT rate must be applied. This raises the question: should the invoice amount be treated as gross (including VAT) or net?

It is assumed that the tax base is the amount on the invoice minus VAT, calculated using the “tax-inclusive” method. This base includes duties, taxes, and charges – except VAT – meaning the invoice amount is treated as gross.

The VAT amount on the goods or services provided is calculated using the following formula:

VA = GV × TR / (100 + TR)

Where:
VA – VAT amount
GV – gross value (including VAT)
TR – tax rate