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Monitoring of the transport of goods: update follows update

Monitoring of the transport of goods (called the “transport package” or SENT system) has been in force since April 2017 (over two years), and has already seen many updates. The Ministry of Finance regularly monitors more and more “sensitive goods.” Additional sensitive goods were added to the already quite long catalogue of sensitive goods from 1 September 2019, and further goods will be added from December.

The system for monitoring of the transport of goods: how it works and why it was introduced
The transport monitoring system is regulated by the Monitoring System Act (full name: Act on the System for Monitoring of Road and Rail Freight Transport and Trade in Heating Fuels of 9 March 2017). It contains rules and establishes liability for non-compliance with obligations related to the transport of sensitive goods by road.
Business entities are required to report the transport of sensitive goods on public roads and the rail network to a register maintained in the IT system of the head of the National Tax Administration.
The purpose of this act is to protect the legal trade in sensitive goods and prevent shortfalls in the most profitable taxes, i.e. VAT and excise duty.

Sensitive goods: which goods are affected
Sensitive goods make up a fairly long catalogue, and are tax-sensitive due to the very high risk of transit fraud. These include motor fuels, heating fuels, lubricating oils and lubricating preparations, products containing ethyl and methyl alcohol, completely denatured alcohol, dried tobacco, medicinal products, foodstuff for particular nutritional uses, and medical devices threatened by a shortage in Poland. The full list of tax-sensitive goods and their classification in the CN system is included in Art. 3(2) of the Monitoring System Act and is also posted on the Platform of Electronic Tax and Customs Services (PUESC).


Exceptions to mandatory notification of the transport of sensitive goods
Not surprisingly, there are a number of exemptions from the mandatory notification of the transport of sensitive goods in the SENT system. The full list of exemptions can be found in Art. 3(4)–(10) of the Monitoring System Act. The following, inter alia, are not subject to the mandatory monitoring system:

• Items transported in postal parcels by postal operators
• Internal warehousing moves
• Items subjected to customs procedures of transit, temporary admission, storage, processing, export or re-export
• Items moved as part of the excise duty suspension arrangement using the EMCS system
• Items transported in unit packaging below a certain threshold (e.g. 1.5 l, 5 l, 26 kg)
• Items whose gross mass in delivery does not exceed 500 kg or volume does not exceed 500 litres (with the exception of dried tobacco and completely denatured alcohol, in which case each delivery is monitored)
• Specific items listed in implementing acts.
In the case of medicine, the notification obligation depends on the name, packaging size, form and strength.

Submission method
Notification of the transport of sensitive goods to the electronic declaration register in the SENT system, as well as supplements and updates, is carried out using the e-Transport service. This service is provided via the PUESC platform. To make a notification, an entity must set up an account on the PUESC platform.

Who is obliged to submit reports
The following are required to submit individual notifications:
• The entity sending goods
• The entity collecting the goods
• The carrier of goods.

Sanctions for non-compliance with reporting obligations
If an obligated entity fails to make a notification in the SENT system, or makes the notification incorrectly, the vehicle or goods may be detained or sealed. In addition, there is a financial penalty from PLN 10,000 to PLN 100,000 and a carrier fine from PLN 5,000 to PLN 7,500.

Amendments to the act from 1 September 2019
Although the Monitoring System Act is quite new (in force for just over two years), it has already been amended several times. The latest amendment entered into force on 1 September 2019.

The main change is the extension of the scope of the SENT Act, which, in addition to the transport of heating oils, also regulates their turnover and indirectly their consumption. The parliament also amended the name of the act to add “Trade in Heating Fuels.”

• Prior to the amendment, only transport of heating oil made to undertakings in an amount exceeding 500 litres was subject to mandatory notification. As a result of the changes, the entire trade in heating oil is now monitored, irrespective of the quantity and status of the buyer, i.e. also by natural persons who do not run a business. The Excise Tax Act was also amended by expanding the definition of the recipient to include a “consuming oil entity” not conducting business activity (buyer) and an intermediary oil entity (seller).
• The previous paper statements confirming the use of heating oil for heating purposes have been replaced by an electronic system (PUESC platform or Tax Portal).
• Both consuming and intermediary oil entities, outside the suspension procedure, are required to file a “simplified registration application” before taking the first action using excise goods intended for heating purposes (exception: registration does not have to be done by entities purchasing heating oil at retail outlets in unit packages with a gross mass not exceeding 30 kg or a volume not exceeding 30 litres, in a total quantity not exceeding 100 kg or 100 litres, respectively).
• The seller is required to register in the SENT system all transactions involving heating oil intended for heating purposes, and the buyer is required to confirm receipt, indicating the amount of oil actually received.

The purpose of the amendment to the act is to tighten the tax system in the field of trade in heating oil and diesel fuels intended for heating purposes and other liquid heating fuels.

As mentioned above, the new regulations entered into force on 1 September 2019, but entities have a right to follow the existing regulations until 31 March 2020.

Further amendments planned from December 2019
As if these changes were not enough, more are planned. According to a regulation of the Minister of Finance published in the Journal of Laws on 22 August 2019, from December 2019 the system of monitoring the transport of goods will also cover the transport of LPG (propane, butane and mixtures of propane and butane) regardless of the quantity in the given shipment. There is an exemption intended to cover goods submitted to the customs procedure of transit, storage, temporary admission, processing, export or re-export and moved using the national ICT system, as well as transported in unit packages whose gross weight does not exceed 61 kg or volume does not exceed 85 litres.
The reason for including the transport of LPG gases in the monitoring system is the same as for heating oils: to combat tax fraud.

Driven by the desire to reduce state budget shortfalls of many millions of zloty and to support legal competition, the Treasury regularly imposes new obligations on entities dealing in road transport of sensitive goods and regularly extends the catalogue of goods classified as sensitive from a tax point of view. The Monitoring System Act has been amended several times in its short life. Thus, in the near future, we can probably expect that it will be expanded again to cover further goods, in order to eliminate VAT and excise fraud, and thus also to increase the revenue from these taxes for the state budget.

Paulina Kicińska

Senior VAT Consultant

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