VAT registrations and simplifications in Poland
When do I need to register for VAT in Poland?
As a general rule, a foreign business must register for VAT in Poland as soon as a taxable supply is made. The following are some usual examples of taxable transactions:
- Domestic supply of goods not reverse charged: A supply of goods located in Poland to a Polish customer where the supply is not subject to reverse charge requires a VAT registration of the supplier. However, where the supplier is not established, this scenario is very unlikely. See Reverse charge rules in Poland for more information.
- Supply of services not reverse charged: Foreign businesses supplying services on which Polish VAT is due must register for VAT. These services are exceptional, as the general B2B rule applies.
- Export: Exporting goods to a non-EU country requires a VAT number before the export is made.
- Intra-Community acquisition: Acquiring goods from another Member State where all conditions for intra-Community movements are met requires the customer to register for VAT.
- Intra-Community supply: Supplying goods another Member State is also a taxable transaction that obliges the supplier to register for VAT.
- Distance sales: When applicable in case the Seller has not joined OSS. See the E-commerce manual for more information.
Foreign businesses that supply certain services in Poland are not obliged to register for Polish VAT when they supply:
- Services and goods where the Polish purchaser accounts for VAT (reverse charge).
- Certain services that are subject to the zero rate, check the list of those services under Regulation of the Minister of Finance on the determination of taxpayers who are not required to submit a registration application. To read more about the conditions to be met to apply the exemption from VAT registration go to the section "When you can (but don't have to) register for VAT".
A backdated registration is possible. In that case, all historic VAT returns must be filed, and potential penalties may be charged by the authorities on late VAT payments. We suggest agreeing the approach beforehand with the responsible tax officer.
There is no registration threshold for foreign non-established companies in Poland. For these businesses, a registration is required prior to the first taxable transaction made in Poland. The VAT registration threshold for established Poland companies is PLN 200,000. This limit does not apply to non-established businesses.
Fiscal representative requirements in Poland
Most non-EU businesses (except Norway and UK) must appoint a Polish fiscal representative when registering for VAT purposes in Poland. Several conditions must be met to act as the fiscal representative. It is important to note that the tax representative has a specific tax liability. In accordance with the provisions of the VAT Act, the representative is jointly and severally liable with the taxpayer for the tax liability, which the tax representative settles on behalf of and for the benefit of that taxpayer.
Businesses from Norway or United Kingdom do not have to appoint a fiscal representative in Poland. These businesses and EU businesses can register directly for VAT purposes. This means that the legal representative of the company can sign the registration form without any local Polish involvement.
Here you can find information from the Polish tax authorities about fiscal representative requirements.
You can check out more information about fiscal representative requirements in our overview of fiscal representative obligations in Europe.
Polish VAT grouping
Where more than one taxable person established in Poland are closely bound by financial, economic and organizational links, these companies can create a VAT group and be treated as a single taxable person for VAT purposes in Poland.
As regards the VAT group criteria, financial links exist when more than 50% of the shares of a member is directly or indirectly held by the same person or business. Organizational links refer to the common management of different members, either directly or indirectly. Economic links exist where the purpose and activity of the members has the same object and goal and benefits the group as a whole. In addition, the following VAT grouping rules apply in Poland:
- Permanent establishments and branches can also be part of a Polish VAT group.
- VAT grouping is optional in Poland. Companies can apply for a VAT group when meeting the requirements or they can choose to remain separated entities for VAT purposes.
- Once the application is approved, a group VAT number is granted to the group.
- Intra-group transactions are disregarded for VAT purposes. Still, they must keep records of these transactions.
- Every member of the group is jointly and severally liable for the VAT debts and penalties of the entire group.
- The minimum time period for a VAT group is three years.
- Members of a VAT group submit one single consolidated VAT return. It is not possible to file separate VAT returns for each entity.
Polish Consignment and call-off stock
Normally, a consignment stock activity between two EU countries will require the supplier to register for VAT in the country of the customer. However, until 2020, most countries had introduced a simplification that allows the supplier to avoid such VAT registration.
In 2020, an EU wide mechanism was introduced as part of the Quick Fixes on VAT. This EU simplification harmonizes the rules in all Member States. You can find more information about this new regime in our dedicated article.
Polish implementation of EU call-off stock simplification
Polish rules fully comply with the wording of the Council Directive 2018/1910.
For goods entering a call-off stock in Poland: where a company moves stock from one EU country into Poland and places the goods in a storage location under the client’s control, the VAT registration of the supplier can be avoided provided the client is VAT registered. Several conditions need to be met jointly in other to apply the simplification:
- The goods are transported by the supplier or a third party acting on his or her behalf (from a Member State other than Poland) and delivered under a call-off stock procedure to one client that is entitled to acquire the right to dispose of the goods as an owner.
- The supplier is neither established nor has a fixed establishment in Poland (the mere VAT registration in the EU Member State of the arrival of the goods should not be a problem in applying the simplification for the call-off stock).
- The customer is registered in Poland for intra-Community transactions (VAT number with PL prefix was issued).
As given in the VAT Directive, it is possible to replace a customer with another one, but there should already be a call-off stock agreement before this replacement takes place. This replacement should be included in the call-off stock register and the recapitulative statement of the supplier.
Bad debt relief in Poland
In order to use the Polish bad debt relief regime, several conditions must be met. There are also formalities for both the supplier and the debtor. Both have been simplified and clarified to a large extent, but still are not the easiest in comparison with other EU countries.
VAT amounts that are not collected from the customer but have been paid as output VAT to the tax authorities can be recovered when the following conditions and formalities are fulfilled:
- 90 days have passed since the lapse of the payment of deadline of the invoice.
- The delivery of goods or the provision of services is made to a customer who is VAT registered (unless the debtor is at that moment in bankruptcy or liquidation proceedings);
- From the date of issuing the invoice documenting the claim, no more than 2 tax years have passed, counting from the end of the year in which the invoice was issued.
- VAT on bad debt can be claimed directly in the next VAT return once the conditions have been met. The creditor and the debtor need to submit corrective returns and for the day preceding the day of submitting the corrective tax return, which includes the correction for bad debt relief. Both the creditor and the debtor are VAT registered (while the debtor is not in the process of restructuring, bankruptcy, or liquidation).
- As from 2015, it is possible to claim VAT deduction on bad debts with related parties (e.g. group entities)
Regarding the completion of the VAT return, the following boxes should be used:
- Supplier: The correction should be indicated by including “1” in the column “Korekta podstawy opodatkowania” and the amount of the correction should be included in the columns “K15” to “K20”.
- Debtor: The amount of the input tax resulting from the input tax adjustment should be included in the column “K46”.
Polish import VAT deferral and postponed import VAT accounting
Normally, companies must pay VAT upon importation and they can deduct this VAT only when the VAT return is filed.
Postponed import VAT accounting is known in Poland as "import of goods" under the simplified procedure. When the regime applies, import VAT is not paid when the goods enter the Poland, but instead it is reverse charged in the next VAT return (with nil cash flow impact).
Polish postponed import VAT accounting is only allowed for businesses on the condition that the importer for more than 6 months has no tax and social contribution arrears and is registered for VAT purposes. The companies that decided to import under this simplification are required to submit monthly JPK_V7M files. When importing on a simplified basis, on both sides of the records - i.e. both the output tax K_25 and K_26, and the input tax K_43-K_46 - the data of the foreign contractor as the actual party to the transaction should be indicated, and the number of the customs document should be indicated in the field "DowódSprzedaż" and "DowódZakupu". For more information, please check the Polish tax authorities page on the simplified import VAT accounting.
Postponed accounting is also possible for authorized economic operators within the meaning of the Community Customs Code. You can find more information under the guidelines on the use of import simplifications.
Import VAT deferral allows import VAT to be paid at a later stage. Some countries allow a period of up to 40 days to make the payment after the importation is made. Poland did not introduce this simplification, import VAT needs to be paid within 10 days from the date of notification by the customs authorities about the amount of tax liability. Therefore, the main simplification to improve cashflow on import obligations in Poland is postponed import VAT accounting.
Polish VAT warehouse and Customs warehouse
The customs warehouse allows for the suspension of the payment of duties and taxes on non-Union goods intended for release for free circulation in the customs territory of the European Union. Read more from the Polish tax authorities on this procedure here.
Poland has two different types of customs warehouses: public customs warehouses and private customs warehouses.
In Poland, zero rating applies to goods supplied within a customs warehouse and under customs warehousing procedure, and goods destined for a free zone.
Goods may also be subject to excise duty suspension. This would be the case when the goods are stored in the customs warehouse. The conditions, formalities, and further information about excise duty suspension in Poland is available on the Polish tax authorities' website.
Those warehouses should not be confused with the Temporary Storage Warehouses, which are similar to customs warehouses but have another function. They allow for the postponement of activities related to customs clearance of imported goods (getting the documentation in order). The maximum storage time in this type of warehouse is 90 days.
Cash accounting scheme
The cash accounting simplification is possible in Poland. Only small businesses with an annual turnover below EUR 1,200,000 can apply to account for VAT on all supplies when part or all the payment is received, but, in any event, not later than 180 days from the time the goods or services were supplied.
Similarly, input VAT is only claimed on an invoice-paid basis rather than invoice-received.
The company loses the right to apply this scheme from the month following the end of the calendar quarter when the thresholds for small taxable persons are exceeded.
More information on eligibility and application process can be found here.