Foreign Companies Fixed-Establishments in Poland

We can observe a gradual change of authorities approach regarding the concept of fixed-establishment in Poland for VAT purposes.


Fixed-establishment in Poland is getting new interpretation


Polish tax authorities and courts are taking an expanding the term regarding those activities of foreign companies which give rise to a fixed establishment.

As a general rule, a ‘fixed- establishment’ shall be any establishment characterised by a sufficient degree of permanence and a suitable structure in terms of human and technical resources to enable a company to provide the services or goods supplied as part of its activity.

However, Polish Tax Authorities in connection with Welmory Sp z.o.o.’ case (C-605/12) of the ECJ, have extended this concept declaring that the resources do not need to belong to the company, so that a fixed establishment may be also created by using third party’s resources.

How do I know if my company has a fixed-establishment in Poland?

To know if a company has a fixed-establishment one must ask himself following questions:

  • Has the company sent a delegation of its employees to Poland in order to supervise services rendered there?
  • Does the company require services rendered by related entity employees in Poland?
  • Are the company’s tangible assets located in Poland?
  • Does the company have employees or plans to have them in Poland?
  • Does the company acquire certain services, especially: rent of storage space, production (especially from related entities), transportation, logistics trade-related and research and technical development in Poland?

In case that the answer to any of them is yes, then you could have a fixed-establishment.

How is this affecting your VAT?

Having a fixed-establishment may deviate the VAT treatment of your transactions in Poland. For certain suppliers, reverse charge sales would not apply. In case the authorities consider that VAT should have been charged due to a fixed establishment in Poland, they would assess penalties in the amounts not paid to the tax authorities.

Furthermore, in case the concept is extended to permanent establishment for corporate tax purposes, the foreign company would be subject to Polish corporate tax on the revenue connected to their activity in Poland.

Fixed establishment Poland

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