B. Scope of the tax
VAT applies to the following transactions:
• The supply of goods and rendering of services in Poland for consideration
• Receipt of reverse-charge services by a taxable person in Poland
• Export and import of goods
• Intra-Community acquisitions of goods from another European Union (EU) Member State by a taxable person (see the EU chapter)
• Intra-Community supply of goods
The following activities are outside the scope of VAT:
• Transactions that cannot be subject to legal agreements (illegal transactions)
• Sales of businesses (transfers of going concerns or part thereof)
Quick Fixes. Pending introduction of a “definitive” system for the VAT treatment of intra-Community supplies of goods to taxable persons, the EU has adopted Quick Fixes for intra-Community trade in goods. For an overview of Quick Fixes rules, see the EU chapter. For documentary requirements, see the Section H. Invoicing, subsection Proof of exports and intra-Community supplies
The Quick Fixes were implemented to the Polish VAT Act on 1 July 2020 and concerned changes in four main areas:
• Call-off stock arrangements (so far, there were regulations on the “consignment store,” but these were replaced with EU provisions on the simplified call-off stock regulations)
• Chain transactions (i.e., introducing the general rule of transport allocation based on the intermediary role)
• Conditions for 0% VAT rate in intra-EU supplies (including an absolute requirement for applying 0% VAT rate of providing a valid VAT number by the buyer and submitting the EC Sales and Purchases List)
• Documentary evidence of proof of intra-EU supplies
Effective use and enjoyment. To avoid instances of non-taxation or double taxation, EU Member States can apply use and enjoyment rules that allow a service that is “used and enjoyed” in the EU to be taxed or prevent a service that is “used and enjoyed” outside the EU from being taxed. If a service is taxed in the EU under the use and enjoyment provisions, a non-EU supplier of the service may be required to register for VAT in every Member State where it has customers that are not taxable persons. For information regarding the rules relating to VAT registration, see the chapters on the respective EU countries.
In Poland, generally no services are subject to the “use and enjoyment” provisions. However, there is a general regulation that VAT is due locally due to the place of supply rules to the following services type (provided certain conditions are met):
• Land and properties services
• Hires of means of transport
• Events
• Ancillary transport services, valuation of and work on goods
• Restaurant and catering
• Passenger and freight transport
• Intermediary services
Transfer of a going concern. A transfer of going concern (TOGC) is understood as the sale of enterprise or an organized part of enterprise (OPE), which is outside the scope of VAT.
OPE is defined as the set of tangible and intangible components organizationally and financially separated from the existing company, including liabilities, intended for fulfillment the specific
economic tasks, which could be treated as an independent entity and could run a business on its own.
Transactions between related parties. For transactions between related parties (“related” being determined through, e.g., the corporate income tax/personal income tax provisions), if one of them or both have limited right to input tax deduction, the remuneration should be at a fair market value (otherwise the tax authorities determine the tax base according to the market value, if it turns out that these relations influenced the determination of the remuneration for the supply of goods or services).
C. Who is liable
A taxable person is a business entity or individual that carries on business activities, regardless of the purpose or result of the business activities. Business activities include all manufacturing, trading and service-providing activities. Business activities also include continuous use of goods and intangible rights with the purpose of obtaining income.
The VAT registration threshold is PLN200,000. The limit may apply in one of the following two ways:
• Retrospectively: the value of supplies of goods or services exceeded PLN200,000 in the preceding tax year.
• Prospectively: at the start of business, the value of supplies of goods or services is expected to exceed PLN200,000. If the business begins after the start of the calendar year, the registration limit applies proportionately to the remainder of the year.
If the value of supplies is not expected to exceed the registration threshold, a new business is exempt from VAT (with some exceptions – see below).
A taxable person may choose to register for VAT. This decision must be reported to the tax office before the first taxable transaction is made when the taxable person starts its activities or before the beginning of the month from which the taxable person chooses to register for VAT. Moreover, taxable persons who perform activities exclusively exempt from VAT do not have to register for VAT (registration is facultative).
Taxable persons who lose the right to be exempt from registration can benefit from the exemption no earlier than one year after they lose the right to be exempt. However, it may waive the exemption. The waiver in writing must be submitted to the appropriate VAT office. If the value of sales exceeds the registration threshold, the exemption is automatically no longer valid and the amount of turnover greater than the threshold is subject to VAT.
The registration threshold is not applied to the importation of goods and services, to intra-Community acquisition of goods and the supply of goods on which the purchaser is liable to account for VAT. In addition, businesses in the following categories must register for VAT at the commencement of activity, regardless of the amount of turnover:
• Businesses that supply products made from precious metals.
• Businesses that supply certain excise products.
• Businesses that supply new means of transport.
• Businesses that supply buildings or building land.
• Businesses that supply certain goods in connection with conclusion of a contract as part of organized system of concluding contracts over a distance, without simultaneous physical presence of the parties, using exclusively one or more means of direct communication over distance until the moment of conclusion of a contract.
• Businesses that provide legal, consulting and professional services.
• Businesses that supply services connected with jewelry.
• Businesses that provide debt recovery, including factoring.
The PLN200,000 registration threshold does not apply to foreign businesses.
Exemption from registration. Foreign businesses (i.e., entities that are not based or that do not have a place of business in Poland) that supply certain services in Poland are not obliged to register for Polish VAT. This exemption is for businesses that supply:
• Services and goods where the Polish purchaser accounts for and pays tax under the reversecharge mechanism
• Certain services that are subject to a zero rate (e.g., services supplied within Polish seaports, connected with international transport, services of air traffic control rendered for foreign providers of air transportation)
Generally, the recipient of goods and services supplied by foreign business is obliged to account for VAT under the reverse-charge mechanism (with some exceptions). However, the reversecharge mechanism cannot be applied if a supplier of goods is registered for VAT in Poland.
Foreign businesses providing intra-EU distance sales of goods are obliged to register for VAT purposes in Poland if they are not reporting these sales under the One-Stop-Shop scheme (OSS) and if the value of their goods sold in Poland exceeded in the previous year EUR10,000 (or its equivalent of PLN42,000).
Voluntary registration and small businesses. Generally, each taxable person may opt for VAT registration in Poland regardless of PLN200,000 threshold. Taxable persons performing only exempt activities may opt for the VAT registration as well. There are no restrictions in this regard in Polish VAT law.
Group registration. Group VAT registration is allowed in Poland from 1 January 2023. VAT groups may be created by taxable persons connected financially, organizationally and economically (this condition shall be in force within the entire period of VAT group existence). In addition, a VAT group may be formed by taxable persons with a registered office in Poland and taxable persons without a registered office in Poland to the extent that they conduct business activity in Poland through a branch located in Poland.
To set up the VAT group, the taxable persons are obliged to conclude an agreement on the VAT group, indicating at least:
• Name of the VAT group with marking in Polish “grupa VAT” or “GV”
• Identification data of the taxable persons forming the VAT group
• Identification of the representative of the VAT group
• Identification of shareholders with the amount of their participation in the share capital of the taxable person within the VAT group with more than 50% in the share capital of these taxable persons
• Identification of the period for which the VAT group is established
The minimum time period required for the duration of a VAT group is three years.
All members of a VAT group in Poland are jointly and severally liable for VAT debts and penalties. In principle, intragroup economic transactions are VAT neutral and are not documented with invoices. The VAT group, as a whole, acts as a singular VAT taxable person, which entails filing obligations.
Holding companies. In Poland, a pure holding company cannot be a member of a VAT group.
Cost-sharing exemption. The VAT cost-sharing exemption (VAT Directive 2006/112/EEC Article 132(1)f) has been implemented in Poland. This provides an option to exempt support services that the cost-sharing group supplies to its members, providing certain conditions are met (in accordance with specific requirements laid out in Polish VAT law, implemented in 2011 to the Polish VAT Act in Article 43(1)21).
but we refer to these rules as e-commerce VAT rules because most of these transactions are conducted via the internet. In general, the place of supply is in the country of consumption, i.e., where the goods are shipped to or where the buyer of the goods or services resides, subject to any “use and enjoyment” provisions that may override this rule (see Section B. Scope of the Tax, Effective use and enjoyment subsection above). Therefore:
• For supplies of services made by a nonresident supplier to a to a business customer (B2B), the business customer is responsible for accounting for the VAT due, using the reverse charge.
• For supplies of goods made by a nonresident supplier to a business customer (B2B), where the goods are transported from another EU Member State, the business purchasing the goods is responsible for accounting for the VAT due, as an intra-Community acquisition. If the goods come from outside the EU, the purchaser may have to report an importation of goods.
• For supplies of goods made by a nonresident supplier to a to a final consumer (B2C), the supplier is generally responsible for charging and accounting for the VAT due at the rate applicable in the customer’s country (unless the supplier’s sales fall beneath the distance selling threshold of EUR10,000 with effect from 1 July 2021). This VAT can be reported using a single VAT registration, using a “One-Stop-Shop” mechanism.
For more details about intra-EU distance sales, see the EU chapter.
Effective 1 July 2021, an e-commerce supplier may have a choice of how to account for VAT on its B2C supplies.
Local VAT registration. A nonresident supplier may choose to register for VAT in each Member State and account for VAT on all supplies made and recover input tax in accordance with local rules (see the Non-established businesses subsection above). Non-EU businesses may be required to appoint a fiscal representative for accounting for the VAT due on these transactions.
In Poland, the standard VAT registration procedure applies (see the subsection Registration procedures below).
One-Stop Shop. Effective 1 July 2021, a supplier can choose to account for the VAT due under the EU One-Stop Shop (OSS), which can be used for intra-EU cross-border supplies of goods and all cross-border supplies of services made to final consumers in the EU. Unlike the previous Mini One-Stop-Shop (MOSS) scheme that applied until 30 June 2021, the OSS is not limited to cross-border supplies of electronic services, telecommunication services and broadcasting services.
The OSS is an electronic portal that allows businesses to:
• Register for VAT electronically in a single Member State for all intra-EU distance sales of goods and for B2C supplies of services.
• Declare and pay VAT due on all supplies of goods and services in a single electronic quarterly return.
The OSS can be used by businesses established in the EU and outside the EU. If a supplier or a deemed supplier decides to register for the OSS, it must declare and pay VAT for all supplies (goods as well as services) that fall under the OSS.
In Poland, where the Member State of identification is Poland, the taxable person is entitled to file an electronic notification to the tax office, II Urzad Skarbowy Warszawa Srodmiescie. The tax authorities shall identify the taxable person for OSS and confirm the notification using the taxable person’s tax identification number. Such notification is published online at podatki.gov. pl in the section “Registration for the Union and non-Union scheme (OSS) and the import scheme (IOSS)” and can be only submitted electronically.
The forms for EU OSS procedure are as follows:
• VIU-R – notification form
• VIU-DO – form of the return for VAT settlements (filed for each quarter by the end of the month following a given quarter
The forms for non-EU OSS procedure are as follows:
• VIN-R – notification form
• VIN-DO – form of the return for VAT settlements (filed for each quarter by the end of the month following a given quarter)
Under the provisions effective 1 July 2023, if a taxable person ceases to use the EU OSS or nonEU OSS procedure or if the Member State of identification changes, a correction to the return can only be submitted outside the EU OSS or non-EU OSS directly to the Łód tax office.
For more details about the operation of the OSS, see the EU chapter.
Import One-Stop Shop. Effective 1 July 2021, the Import One-Stop-Shop (IOSS) scheme applies for B2C distance sales of goods from outside the EU.
Effective 1 July 2021, VAT is due on all commercial goods imported into the EU regardless of their value. The actual supply is subject to VAT in the country where the goods are imported (the country of destination). The IOSS facilitates the declaration and payment of VAT due on the sale of low-value goods (i.e., consignments valued at less than EUR150 per consignment). It allows suppliers selling low-value goods dispatched or transported from a non-EU country to customers in the EU to collect, declare and pay the VAT due. If the IOSS is used, the importation into the EU is exempt from VAT.
In Poland, for the IOSS, the Member State of identification is Poland, and it is applied by taxable persons not having a registered seat in the territory of EU and choosing Poland for IOSS.
The taxable person or the intermediary is entitled to file a notification with the II Urzad Skarbowy Warszawa Srodmiescie by electronic means. The forms for IOSS procedure are as follows:
• VII-R – notification form of taxable person
• VII-RP – notification Form of intermediary
• VII-DO – form of the return for VAT settlements (filed for each month by the end of the month following a given month)
Under the provisions effective 1 July 2023, if a taxable person ceases to use the IOSS procedure or if the Member State of identification changes, a correction to the return can only be submitted outside the IOSS directly to the Łód tax office.
The use of the IOSS special scheme is not mandatory. If VAT is not collected via the IOSS scheme, the importation of goods into the EU is subject to import VAT in the country of final destination, and the Member State can decide freely who is liable to pay the import VAT, which could be the customer or the seller (or an electronic interface). For more details about the IOSS, see the EU chapter.
Postal Services and Couriers Scheme. If the IOSS is not used and the customer is liable for the import VAT due on the supply (and importation) of consignments with a small intrinsic value (i.e., less than EUR150), the VAT can be collected using the special scheme for postal services and couriers.
In Poland, the person responsible for the collection of tax (i.e., postal operator or a taxable person having status of an authorized economic operator) is obliged to file monthly returns with the sum of customs declarations containing the total amount of the tax collected in the month. The collected tax is paid by the 16th day of the following month.
For more details about the special scheme for postal services and couriers, see the EU chapter.
• Handicraft products
• Books, newspapers and magazines
• Hotel services
• Certain entertainment services
• Passenger transport
• Travel services
• Medical products
• Supply of water
• Certain services related to agriculture
• Hard discs
• Certain maintenance services
• Other services related to recreation – solely within the scope of admission
• Supply, construction, repairs and reconstructions of buildings classified as “social housing”
• Provision of the cosmetic services, manicure, pedicure (including the ones provided in home), along with any other cosmetic services
Examples of goods and services taxable at 0%
• Exports
• Intra-Community supplies of goods
• Supplies of certain sailing vessels
• International transport and related services
• Supplies of computer equipment to educational institutions
The term “exempt” refers to supplies of goods and services that are not liable to tax and that do not qualify for input tax deduction.
Examples of exempt supplies of goods and services
• Financial services (with exceptions)
• Supply of real estate (with option to tax)
• Health care services
• Social welfare services
• Public postal services
• Education
• Lease of residential property
• Cultural and sporting events (with exceptions)
• Services connected with science
• Dental engineering
• Betting, gaming and lotteries
Option to tax for exempt supplies. The Polish VAT Act provides option to tax for supply of real estate, which generally benefit from VAT exemption under certain conditions.
The option to tax financial services (only in B2B transactions and except for insurance services) is allowed in Poland. In general, the taxable person may opt to tax financial services provided that:
• It is an active taxable person.
• It submits a written notification to the head of the tax office on choosing such option before beginning of the settlement period from which it ceases from exemption.
The taxable person who waives the exemption is bound by its choice for a period of two years. After this period, the taxable person could apply the exemption again in transactions with other taxable persons or extend the use of the taxation option. Significantly, a taxable person giving up the exemption will be forced to tax all the financial services it provides, without being able to choose which financial services it wants to tax and which it does not.
E. Time of supply
The time when VAT becomes due is called the “time of supply” or “tax point.” The basic time of supply for goods is when the goods are delivered. The basic time of supply for services is when the services are performed.
The tax point for exports of goods is created according to the general rules.
Deposits and prepayments. The receipt of prepayments is considered the tax point. The tax point is created only to the extent of the payment.
Continuous supplies of services. The tax point concerning continuous supplies of services (i.e., those services that are rendered for longer than a year) arises at the end of each year until these services are completed. If services are supplied for a period not exceeding a year – the tax point arises at the moment of services’ completion. Additionally, if parties of the transaction set clearing or payment periods regarding the continuously supplied services, the tax point arises at the end of each period.
Goods sent on approval for sale or return. There are no special time of supply rules in Poland for supplies of goods sent on approval for sale or return. As such, the general time of supply rules apply (as outlined above).
Reverse-charge services. Imported services are subject to a reverse charge, which is a form of self-assessment of VAT. If the reverse charge applies, the recipient of the service accounts for output tax (effectively on behalf of the supplier).
The reverse-charge VAT is deductible as input tax by the recipient of the service (in accordance with the general input tax recovery rules), in the same month (i.e., quarter) when the tax point arises or in one of the two following months (i.e., quarters).
Leased assets. The tax point concerning leased assets arises at the moment of issuance of the invoice documenting leasing services.
Imported goods. The tax point for imported goods arises when a customs debt is incurred. However, for goods imported under certain customs regimes, the tax point arises when the goods enter the customs regime. The following are the relevant customs regime:
• Inward processing
• Temporary customs clearance
• Processing under customs supervision
Intra-Community acquisitions. The tax point for the intra-Community acquisition of goods is the invoice date but not later than the 15th day of the month following the month in which the supply took place. If an invoice is issued before this date, the VAT is due at the time the invoice is issued.
Intra-Community supplies of goods. The same tax point rules apply to intra-Community supplies of goods as those for intra-Community acquisitions (as outlined above).
Distance sales. There are no special time of supply rules in Poland for supplies of distance sales. As such, the general time of supply rules apply (as outlined above).
F. Recovery of VAT by taxable persons
A taxable person may recover input tax, which is charged on goods and services supplied to it for business purposes, if it relates to the person’s taxable supplies. A taxable person generally recovers input tax by deducting it from output tax, which is charged on supplies made.
Input tax includes VAT paid on the purchase of goods and services, VAT paid on imports of goods and intra-Community acquisitions, VAT self-assessed for reverse-charge services received from
In Poland, the VAT refund mechanism for noncash taxable persons is applied. Once a number of the conditions set in the Polish VAT Act are met, a taxable person can receive a VAT refund within 15 days, counting from the day on which the return (or correction of the return) with the amount of VAT to be refunded was submitted.
With effect from 1 July 2023, some of the conditions set in the Polish VAT Act for receiving a VAT refund within 15 days has changed, for example:
• During six consecutive months immediately preceding the period in the settlement for which a taxable person submits an application for refund, the total value of sales, including tax recorded by that taxable person with the use of online cash registers for each settlement period, was no lower than PLN40,000 (previously the threshold was no lower than PLN50,000).
• Six months immediately preceding the period in the settlement for which a taxable person submits an application for a refund and has kept the sales records exclusively with the use of online cash registers (previously the period was 12 months).
Pre-registration costs. It is possible to deduct input tax from expenses incurred prior to VAT registration under certain conditions. The Polish tax authorities allow such deductions, yet such procedure is not regulated within the Polish VAT Act.
In practice, the taxable person should in such cases make a retrospective VAT registration and submit past returns – where the first VAT return is for the month in which the taxable person received the first purchase invoices for expenses incurred. The VAT deduction is possible only if the costs incurred are directly related to the commencement of taxable activities in Poland (e.g., costs for the VAT registration process; notary costs for signing the company agreement, and the taxable person must be ready to present the explanations and proofs if the tax authorities request).
Bad debts. Under certain conditions, a taxable person may adjust a taxable amount and the tax due on goods or services supplied in the case of receivables that cannot be collected has been substantiated. The adjustment also concerns the taxable amount and tax amount attributable to a portion of receivables that cannot be collected and has been substantiated. Receivables that cannot be collected are deemed as substantiated if receivables were not settled or disposed of in any form within 90 days following the lapse of their payment deadline stipulated in an agreement or invoice. On the other hand, if the amount due on the invoice for goods or services supplied is not paid within 90 days from the lapse of payment deadline specified in an agreement or the invoice, a debtor shall adjust a deducted amount of the tax resulting from said invoice in settlement for the period in which the 90th day elapsed from the payment deadline specified in the agreement or the invoice.
The deadline for bad debt relief is three years starting from the end of the year in which the invoice was issued.
Noneconomic activities. Input tax incurred on purchases that are used for noneconomic activities is not recoverable in Poland.
G. Recovery of VAT by non-established businesses
Input tax incurred by non-established businesses that are not registered for VAT in Poland is recoverable. The Polish VAT authorities refund VAT incurred by businesses that are neither established nor registered for VAT in Poland. Non-established business may claim Polish VAT to the same extent as VAT-registered businesses.
EU businesses. For businesses established in the EU, refunds are made under the terms of the EU Directive 2008/09. The VAT refund procedure under the EU Directive 2008/9 may be used only if the business did not perform any taxable supplies in Poland during the refund period (excluding supplies covered by the reverse charge). For full details, see the EU chapter.
Find below specific rules for Poland:
• Refunds are made in Polish zloty (PLN) into a bank account maintained by the claimant either in Poland or in the state where the claimant is resident or has a place of business. If a transfer is made abroad, the tax office does not cover the remittance costs.
Non-EU businesses. For businesses established outside the EU, refunds are made under the terms of the EU 13th Directive. For full details, see the EU chapter.
Poland applies the principle of reciprocity, meaning the country where the claimant is established must provide analogical VAT refunds to Polish businesses.
At the time of preparing this chapter there, is a public list of the countries published on the official government website to which this measure applies available here: https://www.podatki.gov. pl/media/7081/lista-krajow-ubiegajacych-sie-o-zwrot-podatku-vat-w-polsce.docx
The countries to which the principle of reciprocity applies are all EU Member States, Iceland, North Macedonia, Norway, Switzerland and the United Kingdom. In the case of the countries not included on the list, the claimant should gather and present the evidence to establish that the principle of reciprocity applies in a given case.
Find below specific rules for Poland:
• Refund claims by non-EU businesses must be filed with the following tax office in Warsaw: II Urzad Skarbowy Warszawa Srodmiescie
Jagiellonska 15 Warsaw Poland
• Refund claims must be filed in paper. The forms must be completed in Polish.
• The minimum claim period is three months, and the maximum claim period is one calendar year.
• The deadline for submitting the application is 30 September following the claim year.
Late payment interest. EU businesses and non-EU businesses are entitled to receive interest on late refund payments according to the same rules as for domestic businesses in Poland. Interest is calculated from the day following the last day for payment of the refund until the day the refund is actually paid. At the time of preparing this chapter, standard interest rates are equal to 14.5% p.a. (according to local provisions).
H. Invoicing
VAT invoices. A Polish taxable person must generally provide a VAT invoice for the following:
• All taxable supplies made except for exempt transactions
• Exports of goods
• Intra-Community supplies
• Supplies of goods outside the scope of Polish VAT (the reverse-charge mechanism applies)
• Supplies of services outside the scope of Polish VAT (the reverse-charge mechanism applies)
• Triangular transactions (see the EU chapter)
• Distance sales (see the EU chapter)
VAT invoices are not required if a business exclusively supplies exempt goods or services. VAT invoices are not required for sales made to private individuals who do not carry-on business activities, unless requested. Invoices must support claims for VAT refunds claimed by nonestablished businesses.
Credit notes. A credit note (called a “correcting invoice”) must be issued if any of the following circumstances arise after an invoice is issued:
• A rebate or discount is granted.
Foreign currency invoices. The VAT amount on the invoice must be shown in the domestic currency, which is the Polish zloty (PLN), regardless of the currency in which the amount due is expressed in the invoice. If a VAT invoice is issued in a foreign currency, the output value must be converted into Polish zloty, using the official exchange rate published by the National Bank of Poland (NBP) or European Central Bank (ECB) for the last business day preceding the date on which the tax point arises. However, if the invoice is issued before the tax point date, the output value must be converted using the official exchange rate published by NBP or ECB for the last business day preceding the invoice issuance date.
Starting from 1 July 2023, the above rule also applies for corrective invoices, i.e., when the original invoice was issued in a foreign currency, the exchange rate applicable to the original invoice should be used for the corrective invoice (before 1 July 2023 it was also a common practice to apply the exchange rate applicable to the original invoice for the corrective invoice, but there were no binding provisions in this regard at that time).
Supplies to nontaxable persons. A taxable person is required to issue a full VAT invoice for documenting supply of goods or services to natural persons and non-entrepreneurs upon their request (there is no legal requirement to do so without such request).
If the acquirer of goods or receiver of services requests an invoice, the taxable person should issue an invoice:
• No later than on the 15th day of the month following the month in which the goods or services were delivered/performed, provided that the invoice request is made by the end of the month in which the goods are delivered, or the service is performed.
• No later than on the 15th day from the date of submission of the request – provided that the request for an invoice has been made after the expiry of the month referred to in the previous point.
However, if the request for an invoice was made after three months, counting from the end of the month in which the goods were supplied or the services were provided, or the payment was received in full or in part, then the taxable person is not obliged to issue an invoice.
Such an invoice upon request can be issued to the acquirer of goods or the receiver of services, being a taxable person only, if the fiscal receipt confirming a given supply of goods or provision of services includes the tax number of the acquirer.
Distance selling. For intra-Community distance sales made B2C, a full VAT invoice must be issued. However, this only applies where the place of taxation is Poland. If the place of taxation is the destination country (when chosen or above the EUR10,000 threshold), the invoicing rules of a destination country apply. However, if the supplier operates the OSS regime (and its country of identification is Poland), Polish invoicing provisions specify no full VAT invoice is required unless requested.
Records. In Poland, examples of what records must be held for VAT purposes include the following records:
• The invoices, including those reissued, that the taxable persons issued themselves or that were issued in their own name.
• The invoices received, including those reissued – broken down by settlement periods, in a manner allowing the invoices to be easily found and guaranteeing the authenticity of the origin, the integrity of the content and the legibility of the invoices from the moment of issue until the expiry of the tax obligation limitation period.
In Poland, VAT books and records can be held outside of the country. Generally Polish established taxable persons must hold their records in Poland. However, if they are stored in an electronic form enabling online access to those by tax authorities, they can be stored outside Poland
as well. Non-established businesses can keep their records outside Poland but must be able to present them at the request of tax authorities (in practice – in an electronic form).
Record retention period. The tax obligation limitation period is five years from the end of the calendar year in which tax payment was due. As such, records must be kept for five years.
Electronic archiving. Electronic archiving is allowed in Poland but not mandatory. As such, paper invoices issued and received can be archived under their paper format. Therefore, electronic archiving is allowed in Poland provided that electronic archiving does not alter and modify information submitted in the related document and that the business updates its archiving system in order to comply with the regulations.
In addition, with effect from 1 July 2023 it is no longer mandatory to print fiscal receipts or invoices issued instead of receipts for users of online cash registers. Before 1 July 2023, all users of cash registers (so including also taxable persons using online cash registers) were obliged to print the above documents.
I. Returns and payment
Periodic returns. In Poland, VAT returns are submitted by all taxable persons registered for VAT in form of an extended single audit file for tax (SAF-T) return (JPK_V7M).
The SAF-T is made monthly, submitted in electronic form by the 25th day of the month following the month in which the tax point arises. Refer to the Digital tax administration section below for further details.
Periodic payments. The deadline for making the relevant VAT payment is the same as for submitting the SAF-T return, i.e., by the 25th day of the month following the month in which the tax point arises. VAT liabilities must be paid by bank transfer and must be paid in Polish zloty (PLN).
The approved list. The approved list is an electronic list of taxable persons, in which from 1 September 2019 entrepreneurs can verify data on entities that were not registered for VAT purposes (or were deregistered), entities registered as taxable persons (i.e., data on active and exempt taxable persons), including entities whose registration as taxable persons have been restored.
The existing registers were merged into a single list extended by the additional data, such as bank account numbers indicated in the tax identification or update notifications.
The list is made available in the Public Information Bulletin of the Ministry of Finance in a manner enabling checking whether a given entity is on the list on a selected day, not earlier than in the period of five years preceding the year in which the entity is checked.
If the entrepreneur makes a payment to another account (not listed) and the seller does not pay VAT on this transaction to the tax office, the entrepreneur will be jointly and severally liable with the seller up to the amount of tax liability for the transaction.
Split-payment mechanism. Poland introduced a split-payment mechanism, as of 1 July 2018. The mechanism is optional to taxable persons. Each taxable person is allowed to choose whether it would like to pay its purchase invoices with or without the use of split payment.
As of 1 November 2019, new regulations apply as regard the use of the split payment mechanism (hereinafter: the SPM). The SPM is compulsory for transactions of sale or purchase of a specific group of goods – listed in Annex 15 to the Polish VAT Act. The Annex includes goods determined according to specific Polish Classification of Goods and Services (PKWiU) groups.
The obligatory SPM is being used for the supply of goods and services that were covered by the reverse-charge mechanism and the existing scope of joint and several liability of the buyer; therefore, it mainly covers the steel, fuel and construction services.
In the case of the taxable person’s obligation to apply the SPM:
• Payment of the amount corresponding to all or part of the VAT amount resulting from the invoice received is made to the VAT account.
• Payment of the amount corresponding to all or part of the net sales value resulting from the invoice received is made to the bank account or SKOK account of supplier.
It covers payments regarding invoices documenting transactions made between taxable persons whose one-off value, regardless of the number of payments resulting from it, exceeds PLN15,000 or the equivalent of this amount.
To identify the SPM, the invoice needs to include a “split payment mechanism” annotation. Lack of this wording results in high sanctions.
Electronic filing. Electronic filing is mandatory in Poland for all taxable persons. Electronic filing applies to all types of returns. The returns can be signed through the following:
• Qualified signature (Polish or another EU Member State)
• Trusted profile
Later, the returns can be sent via the internet using tools available on the Ministry of Finance Tax Portal (e.g., interactive forms, the e-Deklaracje Desktop application, web applications). However, there are no obstacles to using commercial software adapted for sending tax documents via the internet.
To submit the return electronically to the tax office, taxable persons must appoint a person authorized to sign on their behalf a qualified electronic signature of declarations. Filing a VAT return is made by submitting an UPL-1 Form in paper (to the tax office responsible for the registration of taxable persons and payers) or by ePUAP (to the Head of the National Tax Administration).
After submitting a correct return, the taxable person will be able to download the Official Receipt Certificate (UPO).
A taxable person who, contrary to the obligation, does not provide a declaration or summary information in electronic form, exposes themselves to punishment. The penalty for the fiscal offense is a fine from 1/10 to 20 times the minimum remuneration for work (with effect from 1 January 2023 it ranges from PLN349 to PLN69,800 and with effect from 1 July 2023 it ranges from PLN360 to PLN72,000). However, this is generally dealt with in a mandatory procedure, and a fine imposed by a penal fine cannot exceed double the minimum wage (PLN6,980 and PLN7,200, respectively).
With effect from 1 January 2024, a fine for the fiscal offense will range from PLN42,420 to PLN84,840, and starting from 1 July 2024, a fine for the fiscal offense will range from PLN430 to PLN86,000 (a fine imposed by a penal fine will not be allowed to exceed double the minimum wage [PLN8,484 and PLN8,600, respectively]).
Payments on account. Payments on account are not required in Poland.
Special schemes. Small businesses. “Small businesses” include taxable persons whose total value of supplies in the preceding VAT year did not exceed the Polish zloty equivalent of EUR2 million. The EUR2 million threshold also applies to commission sales. The threshold for brokerage houses is EUR45,000 of income from brokerage and other forms of remuneration. A business that meets the small-business conditions may opt for a special VAT scheme, but this treatment is not compulsory.
The status of a small business is entitled to submit SAF-T returns on a quarterly basis or a “specific tax point.” The specific tax point for a supply is the receipt of payment. The appropriate VAT office must be notified of the decision to choose this tax point.
Nevertheless, small businesses should pay monthly advance payments for VAT liabilities until the 25th day of the month following the settlement period.
Cash accounting. A cash accounting scheme is possible for small taxable persons, provided they notify the appropriate tax office of the decision to apply this. Notification should be made until the end of the month preceding the period for which it will use this method. A small taxable person may resign from the cash method, but not earlier than after 12 months. The tax office must be notified about the resignation.
Applying this scheme results in the “specific tax point.” The specific tax point for a supply is the receipt of payment (however, not later than 180 days after a supply for supplies to nontaxable persons). The specific tax point does not apply to the supply of SPVs and intra-Community supply.
Flat-rate farmers (RR). A flat rate system is available for farmers exempt from issuing invoices, keeping sales and purchase registers, filing VAT returns and being VAT registered.
Flat-rate farmers are entitled to receive the refund from the agricultural supplies at a 7% rate of the amount due in respect of the supply.
The purchaser of the products should be VAT registered, should issue the invoice marked as “Faktura VAT RR” (in two copies) to the flat-rate farmer with an additional statement on the invoice, i.e., “I hereby declare that I am a flat-rate farmer exempt from VAT under Article 43, paragraph 1, subparagraph 3 of the VAT Act,” and obliged to pay the amount of the refund to the flat-rate farmer.
Tour operators. The taxable base is the amount of margin reduced by the amount of output VAT. An invoice documenting services of tourism should include additional statement “margin procedure for tour operators.” The tour operator is not entitled to deduct input tax on purchased goods or services.
Secondhand goods, works of art, collectors’ items or antiques. The taxable base is the amount of margin constituting the difference between the sales amount and the acquisition amount, reduced by VAT amount. The supplier is not entitled to deduct input tax on purchased goods or services.
An invoice documenting supplies of secondhand goods, works of art, collectors’ items or antiques should include additional statements, such as “margin procedure for secondhand goods,” “margin procedure for works of art,” or “margin procedure for collectors’ items or antiques.”
Annual returns. Annual returns are not required in Poland.
Supplementary filings. Intrastat. A Polish taxable person that trades in goods with businesses elsewhere in the EU must submit Intrastat forms if its turnover exceeds the following amounts:
• Intra-Community acquisitions: PLN6.2 million
• Intra-Community supplies: PLN2.8 million
If the taxable person’s turnover does not exceed certain thresholds, it is not required to complete all items of the Intrastat Report Form (numbers 12, 15 and 20 may be excluded). The following are the thresholds:
• Intra-Community acquisitions: PLN103 million
• Intra-Community supplies: PLN150 million
Intrastat returns are filed with the Polish customs authorities monthly. They must be filed by the 10th of the month following the month in which the transactions occurred.
Intrastat returns must be submitted in electronic form. Intrastat returns must be filed in PLN.
• Indication of invoices documenting particular types of supplies (examples):
– Alcohol drinks
– Tobacco products
– Waste – Electronical goods
– Motor vehicles
– Metals
– Medicines and medical devices
– Buildings
– Immaterial services (e.g., accounting, advisory, legal, management, training, marketing, provided by head offices, advertisement, market research, scientific research)
– Transportation and warehousing
• Separate markings concerning types of deliveries:
– Intra-EU distance sales and of goods and telecommunication services
– Electronic interface
– Between related parties
– Being subject to special import procedures
– SPVs
– MPVs
• Indication of type of document confirming the transaction:
– Internal document
– Invoice
– Collective internal document for sales from cash registers
• Part of the above information is required with respect to purchase transactions as well. Just to indicate some differences, at the purchase transactions’ side it is required to mark invoices issued by a taxable person settling their VAT on cash basis.
J. Penalties
Penalties for late registration. For late VAT registration in Poland, a taxable person may be penalized based on the Penal Fiscal Code (e.g., for not meeting the identification requirement; see the subsection Changes to VAT registration details above). In addition, penalties are also assessed if, as a result of late registration, a taxable person pays VAT late or submits VAT returns late. Penalties may include fines and criminal penalties.
Penalties for late payment and filings. For a VAT return that is submitted late, the individual responsible for the delay may be fined if the tax court determines that it is at fault. The fine is imposed on the basis of the Penal Fiscal Code which determines the penal liability of natural persons for fiscal crimes.
The interest rate applied to delayed payments of VAT is the sum of 200% of the National Bank of Poland “Lombard rate” and 2%. The standard interest rate shall not be less than 8% per year. In the specific cases, the lowered interest rate (4%) and increased interest rate (12%) may apply. The interests are not charged if their amount does not exceed PLN8.70.
At the time of preparing this chapter, standard interest rates are equal to 14.5% p.a. (according to local provisions).
Penalties for errors. A penalty of up to 30% can be charged for the understatement of tax liability, if it is shown in the tax return that the amount of tax is lower than the amount payable or the overstatement of the amount of input tax.
A penalty of up to 20% can be charged for the understatement of a tax liability (or overstatement of the amount of input tax), in the case of a taxable person correcting their settlement after the completion of a tax audit or in the course of the audit procedure. No sanction shall be determined