Stage 1: Before you register for VAT
1. In what situations do I have to register for VAT in Poland? What is the deadline?
You have to register for VAT purposes in Poland if you meet the conditions of being a taxpayer, i.e. you are either a legal person (e.g. a corporation), an organisational unit without a legal personality (e.g. a partnership) or a natural person and you conduct business activity on your own (as a producer, trader or service provider). This activity must involve VAT-taxable activities (see question 2).
You are not required to register for VAT, if you are subject to VAT exemption, i.e. you either sell goods or provide services listed in the catalogue of exempt activities of the Polish VAT Act.
Your VAT registration must be submitted before the date of the first sale of goods or services other than those exempted. However, please remember that you acquire the status of a VAT payer when you carry out taxable activities (by concluding your first transactions), regardless of the formalities, i.e. the registration request!
If you fail to register for VAT despite being required to do so, you run the risk of not only having to pay the outstanding tax along with interest, but also of being prosecuted by the tax authorities (which means a lot of problems with the authorities right from the start).
2. What activities are subject to VAT in Poland?
Activities subject to VAT include the following:
- supply of goods and provision of services for consideration within the territory of Poland,
- export of goods from the territory of Poland outside the EU,
- import of goods from outside the EU into Poland,
- intra-Community acquisition of goods for consideration from the territory of another EU Member State into the territory of Poland,
- intra-Community supply of goods from the territory of Poland into the territory of another EU Member State.
The aforementioned activities are taxed even if they have been performed in breach of the conditions and forms prescribed by law.
Please note that the scope of the aforementioned terms is broad. As a rule, the supply of goods is any paid transfer of the right to dispose of the goods as their owner, whereas the provision of services is any paid service which does not constitute a supply of goods.
3. Can I reclaim VAT paid in Poland without having to register?
Entities registered for VAT purposes in an EU country other than Poland which:
- do not have a registered office,
- do not have a permanent place of business,
- do not have a permanent place of residence or habitual residence in Poland,
- do not conduct sales on the territory of Poland
can reclaim VAT paid in Poland by submitting a VAT-REFUND request by 30 September of the year following the year in which invoices with the Polish VAT were issued.
This request should be submitted via the competent tax authority in the country of residence (there will be an exchange of information with the competent tax authority in the county of refund, i.e. Poland). The taxpayer does not register for VAT in Poland for this purpose. Please remember that the deadline for submitting your VAT-REFUND request is final and absolute.
You will be notified whether your request has been approved or rejected.
Non-EU businesses may apply for a VAT refund provided that a number of conditions are met. What is important: any tax refund hinges upon the principle of reciprocity (which means that your country must ensure the option of a corresponding tax refund to entrepreneurs from Poland).
4. Is there a fee you have to pay for registering for VAT in Poland?
As a rule, registration for VAT purposes in Poland is free of charge. However, there are some costs indirectly involved in the registration procedure, i.e. the costs of a certified translation of the original company documents, a stamp duty if you are acting through a proxy or for issuing an official registration confirmation (however, this confirmation is optional, and the taxpayer themselves can verify their status on the official government website at any time and free of charge).
5. What are VAT rates in Poland?
VAT rates applied in Poland for domestic transactions are as follows:
- standard VAT rate of 23%;
- reduced VAT rate of 8% for the supply of selected medical devices and foodstuffs, catering, hotel and social housing services;
- reduced VAT rate of 5% for the supply of certain foodstuffs and selected types of books and newspapers;
- technical VAT rate of 0% for the intra-Community supply of goods and export of goods, provided that specified statutory requirements are met.
In addition, it may be the case that a transaction is not taxable, e.g. due to the reverse charge mechanism being applied, or may be exempt from tax under the tax legislation.
6. What is the function of a ‘tax agent’ and when do I have to appoint one?
A tax agent is a representative of a foreign taxpayer performing activities subject to VAT in Poland. The tax agent performs tax accounting obligations (e.g. submitting returns) for and on behalf of this taxpayer and, if needed, any other activities required under VAT regulations, provided that they have been authorised to do so under an agreement. The function of a tax agent involves risk: the agent is jointly and severally liable for the taxpayer’s obligations they settle on their behalf. A tax agent is appointed by way of a written agreement.
It is the responsibility of taxpayers who do not have a registered office or a permanent place of business on the territory of any EU Member State to appoint a tax agent.
This obligation does not apply to taxpayers with a registered office or a permanent place of business on the territory of the Kingdom of Norway or the United Kingdom of Great Britain and Northern Ireland (as an exception, regulated by the Regulation of the Minister of Finance).
This obligation also does not apply to (as an exception, governed by a regulation of the Minister of Finance) taxpayers with their registered office or permanent place of business within the territory of the Kingdom of Norway or the United Kingdom of Great Britain and Northern Ireland.
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Stage 2: Registration for VAT purposes (active VAT payer, VAT-UE payer)
1. What documents are required in the registration process?
In order to register for VAT purposes in Poland, the taxpayer is required to have a Polish tax identification number, known as NIP. Therefore, apart from the registration request, the registration process includes an identification request to be submitted on a NIP-2 form. This request must come with documents, i.e. an extract from the business register from the country where the entity requesting VAT registration in Poland is seated or a copy of the articles of association of the company. For the tax authority, it is essential that this document shows the make-up of the management board representing the entity and the scope of authorisation to act for and on behalf of the company (joint or independent representation).
The registration request is submitted on a VAT-R form. A document that must be attached is a confirmation of taxpayer status in the country of the registered office of the entity applying for VAT registration in Poland.
What is important, the identification request (NIP-2) and (VAT-R) may be submitted at the same time, which speeds up the entire registration procedure. Please note that all documents submitted to the tax office must be drawn up in Polish on original forms. Moreover, there is a requirement to hand in a certified translation of documents submitted in a foreign language, e.g. the aforementioned excerpt from a business register.
The entity applying for registration may also act through a proxy on the basis of a power of attorney they were granted.
Taxpayers seated in Poland are also required to submit a document confirming their legal title to the real property used for their business activity (a warehouse, an office).
2. How long does the registration process take?
VAT registration in Poland is not an ‘automatic’ process. Once registration documents have been submitted to the competent office, the credibility of your request is verified. In practice, the entire registration process (from the moment you start completing the documents until you submit them to the office and get your request approved) usually takes from one to two months.
3. Do I have to open a bank account in Poland?
No, as a rule, a foreign entity applying for VAT registration in Poland is not required to have a bank account in Poland. However, this is recommended in the case of any prospective VAT refund request or even necessary for the obligatory split payment mechanism.
It should be noted here that under the Polish tax regulations any VAT refund can be only transferred to a bank account held with a bank seated on the territory of Poland. Thus, it is absolutely impossible for entities registered for VAT purposes to get a VAT refund to a foreign bank account. What is also important is that the bank account for the VAT refund must belong to the taxpayer requesting the refund. It is therefore not possible for another entity to act as an intermediary and receive VAT on behalf of the taxpayer reclaiming VAT. The details of the bank account for VAT refunds must be submitted to the Tax Office together with a bank document confirming who the bank account owner is.
4. Do I get an official (administrative) confirmation of my registration for contractors?
It is possible to obtain an administrative confirmation of your registration (it is not obligatory, though). You have to pay a stamp duty of PLN 170.
Please note that anyone can verify their contractor (free of charge) for VAT purposes using the “white list”.
5. Can I register for VAT retroactively?
The option to register for VAT retroactively has been approved in official tax rulings. Please note that some tax offices deny this option despite the said tax rulings.
Stage 3: After registration (JPK_V7/VAT-UE)
1. What reporting obligations do I have and what are the deadlines?
The basic obligation of any VAT payer is to submit monthly or quarterly online SAF-T reports, i.e. JPK_V7. This document must be submitted not later than on the 25th day of the month following the settlement month in the case of monthly reporting (JPK_V7M) or by the 25th day of the month following the end of a given settlement quarter for quarterly reports.
The first document shall be submitted for the period in which you have commenced your taxable activity. What is important, you can submit your return even if you have not yet been registered for VAT purposes for whatever reason. You are also required to submit a return for any period in which you did not conclude any purchase or sale transactions (it is known as ‘zero return’). The only case in which you do not have to submit your return is when you have formally suspended or totally deregistered your business activity (you stopped operating in Poland).
Any entities registered as VAT-UE payers are also required to submit a VAT-EU recapitulative statement by the 25th day of the month following the settlement month (there is no option of submitting the recapitulative statement on a quarterly basis).
2. Can I account for transactions that have been concluded before my registration?
Yes, you can, and you actually have to. The fact that you are not registered for VAT does not mean you are not required to submit your returns and account for any output VAT. It is a bit more problematic to deduct input VAT: some tax offices deny this option if you are not registered yet.
3. What is JPK_V7 and what does it consist of?
JPK_V7 is an electronic document (SAF-T) in place in Poland since 1 October 2020, to be submitted by VAT payers on a monthly basis (JPK_V7M) or a quarterly basis (JPK_V7K). JPK_V7 is comprised of two parts: the record (with information about purchases and sales from the VAT records for a given period along with additional details needed to verify the correctness of the settlement) and the return (with VAT return items). Both parts are included in a single file. In practice, this file replaces, among others, a standard tax return.
4. What conditions do I have to meet to reclaim VAT?
Firstly, it should be noted that a prerequisite for any VAT refund is having the right to reduce the amount of output VAT by the amount of input VAT to the extent the goods and services are used to perform taxable activities.
The right to deduct VAT arises in the settlement for the period in which a tax liability arose with respect to the acquired or imported goods, not earlier than in the settlement for the period in which the taxpayer received an invoice or a customs document (import of goods) or accounted for the output tax on the intra-Community acquisition of goods or a transaction subject to a reverse charge mechanism in the relevant reporting period.
Once the above conditions are met, in order to reclaim VAT you have to report an excess of input VAT over output VAT in a given period. The taxpayer shall then have the following options:
- carry forward all or part of the excess to the next accounting period in order to, for example, reduce the potential amount of tax to be paid;
- request a refund of all or part of the tax to the taxpayer’s bank account within: 25, 60 or 180 days (depending on the fulfilment of certain statutory conditions, see question 5 below).
5. When will I receive my VAT refund?
The standard period for a VAT refund is 60 days after the date when the taxpayer submitted the VAT return. However, tax authorities may extend this deadline if they find that they need to further verify if the refund is justified.
If the taxpayer did not have any sale transactions in a given accounting period (even untaxed sales) and recorded only purchase transactions, the deadline for a refund shall be extended to 180 days.
A special shorter VAT refund period of 25 days is also possible. However, in this case certain conditions must be met jointly (among others, the amount of input VAT to be refunded cannot exceed PLN 3,000).