European Tax Law allows the Union States to introduce up to three VAT rates. Standard VAT rate, reduced VAT rate and super-reduced VAT rate. In Poland the standard VAT rate is 23%, while the reduced rates equal 8% and 5% and those are intended mostly for basic necessities, transportation and certain services. The exhaustive lists of products eligible for reduced rates are presented in an annex to the Polish VAT Act. The assurance of implementing the appropriate VAT rate to be compliant with the Polish VAT Act belongs to the taxpayer.
EU VAT Rules allows also to use 0% VAT rate for exportation of goods out of the European Union as well as intra-Union deliveries. Additionally, taxpayers may use an exemption for deliveries of some goods and services. In Poland two special flat-rate scheme have been introduced – first 7% for the flat-rate farmer, and second 4% – which applies for some taxi drivers.
A foreign company intending to conduct transactions that are subject to VAT, i.e. sales of goods or services or perform intra-Union transactions, within the territory of Poland, must first be registered for VAT purposes in the country. The process of registration, which results in a VAT identification number being assigned to a requesting entity, must be undertaken prior to conducting any kind of VAT taxable activity in Poland.
What is important, in general, the exemption from the obligation of being VAT registered in Poland does not apply to overseas companies. The only exception allowed is that provided by EU VAT rules and concerns distance sales. The EU tax law allows entrepreneurs that are legal entities, registered in another member state, to sell goods with shipment to individuals in Poland without the necessity of registering to VAT, provided that the below requirements are met:
- the goods supplied are not products subject to excise duty,
- the total value, exclusive of VAT, of such goods, does not in any one calendar year exceed PLN 160 000,
- the total value, exclusive of VAT, of the supplies of goods, other than products subject to excise duty, did not in the previous calendar year exceeds PLN 160 000 or the equivalent in national currency.
In any other case, the supplier must be registered to VAT for VAT and fulfil the obligation of filing monthly or quarterly reports to the Tax Authorities.
Businesses intending to conduct intra-Union transactions must also be VAT EU registered. It does not require any additional steps to be taken as the declaration of intention to participate in intra-Union trade can be reported as an element of the standard registration procedure.
You can ready more on the registration rules on our webpage: https://europe-tax.com/services/vat-registration-in-the-eu/
Based on the European tax law, conducting transactions results in achieving a certain turnover which then must be reported to the Tax Authorities in the form of periodical VAT reports. Polish tax authorities allow filing monthly or quarterly reports submitted by 25th of the month following the reporting period in which the taxable transaction took place.
Apart from the report described above, based on the European Tax Rules introduced in some EU states, including Poland, the taxpayers are obliged to file an additional SAF-T (Standard Audit File for Tax) containing crucial information about the transactions carried out, such as amounts and contractors identification data. The SAF-T file shall be submitted whichever procedure of VAT reporting the taxpayer selects. The SAF-T file must be submitted to the Tax Authorities in electronic form on a monthly basis even if the taxpayer has chosen quarterly VAT reporting.
The current EU VAT Rules also predict, that being registered for intra-Union transactions implies additional obligation to report an EC Sales and Purchase Lists (also called as recapitulative statements) as a document containing balances resulting from performing intra-Union deliveries and purchases with identified contractors.
VAT taxpayers neither established nor having a fixed establishment in the European Union which are required to register to VAT in Poland are obliged to appoint a fiscal representative.
Polish Tax law : VAT Act
Art. 18a. A taxpayer … having no registered office or permanent establishment in the territory of a Member State, subject to the obligation to register as an active VAT taxpayer, is obliged to appoint a fiscal representative.
- A taxpayer with a registered office or permanent place of business in a Member State other than that of the country may appoint a fiscal representative.
- The minister competent for public finance may specify, by regulation, cases in which there is no obligation to appoint a tax representative, taking into account the need to ensure the correct settlement of tax by entities without a registered office or permanent establishment in the territory of a Member State.