The intra-community supply of goods (WDT) is a key element of international trade within the European Union. It is a transaction involving the movement of goods between EU member states in which both the seller and the buyer are VAT payers. You will learn what WDT is, its associated VAT rates, what elements a WDT invoice should contain, and how to correctly issue an intra-community invoice.
WDT, what is it?
Intra-community supply of goods (WDT) refers to the sale of goods between companies from different countries of the European Union. Under WDT, goods are shipped from one member state to another, and both parties are registered for VAT.
Characteristics of WDT:
- Goods are moved between two EU countries.
- Both the seller and the buyer must have active VAT-EU numbers.
- The seller applies a 0% VAT rate, provided specific formal requirements are met, such as having appropriate documentation to confirm the movement of goods.
WDT is an essential element of the unified EU market, eliminating tax barriers and promoting the free movement of goods between member countries.
WDT VAT rate
A preferential VAT rate of 0% is applied to the intra-community supply of goods, an essential incentive for entrepreneurs engaged in international trade. However, the possibility of using this rate is subject to the fulfillment of certain conditions.
Conditions for applying the 0% VAT rate in WDT:
- Both the seller and the buyer must be registered as VAT-EU taxpayers.
- The buyer of the goods must provide a valid VAT-EU number, which the seller must verify in the VIES system.
- The goods must physically leave the seller's national territory and be delivered to the territory of another EU member state.
- The seller must have appropriate documentation confirming the movement of the goods, such as a bill of lading, CMR documents, a sales invoice, or a written receipt.
Failure to meet these requirements may result in the VAT rate applying to the seller’s country.
WDT invoice
The WDT invoice is the essential accounting document that confirms the realization of an intra-community supply of goods. It should contain certain elements that tax law requires to fulfill its function in VAT settlements.
Elements that a WDT invoice should contain:
- Date of issue and invoice number.
- Details of the seller and buyer, including their names, addresses, and VAT-EU numbers.
- Description of the goods, including quantity, type, and unit value.
- The total value of the transaction in the currency agreed between the parties.
- Information on applying the 0% VAT rate and the legal basis (e.g., “Intra-Community supply of goods - Article 42 of the VAT Act”).
- The date the supply was made or completed (if different from the invoice date).
The WDT invoice also serves as evidence in case of a tax audit, so its correctness is crucial for tax settlements.
Intra-Community invoice
An intra-community invoice is a broader term that includes invoices issued for intra-community supply of goods (ICT) and intra-community acquisition (ITP). In both cases, the invoice must meet specific requirements, including details of the parties to the transaction and appropriate VAT designations.
What is the difference between a WDT invoice and an intra-community invoice?
- A WDT invoice is for goods supplied between EU countries and may include a 0% VAT rate.
- An intra-community invoice can refer to both supplies and acquisitions, and its content depends on the nature of the transaction.
The most important rules for intra-community invoices:
- All transactions must be appropriately marked and reported in VAT returns and the VAT-EU summary information.
- For transactions with a 0% VAT rate, documentation requirements must be met to prove the legitimacy of the preferential rate.
Intra-community supply of goods (ITA) is an integral part of the EU market, allowing the free movement of goods between member states. Key aspects such as the 0% VAT rate, a correctly issued WDT invoice, and documentation confirming the transaction’s execution are the foundation for the correct settlement of WDT. With compliance and proper preparation, entrepreneurs can enjoy the benefits of international trade within the EU.
