Companies operating in the offshore sector – engaged, among other things, in the installation and maintenance of offshore wind farms and drilling platforms – are accustomed to working in unusual conditions. However, a non-standard working environment is not their only challenge. Offshore projects are highly international undertakings, carried out at the intersection of multiple jurisdictions and within specific legal frameworks, which makes the related tax issues particularly complex.

The need to take into account the specifics of the offshore industry means that tax matters require not only specialist knowledge but also the ability to navigate a diverse regulatory environment. So, what specific challenges might entities operating in this sector face? Below, we present a case study illustrating how our tax advisers supported a company in addressing the tax aspects of its operations.

Client:

In the case we present, the client of RSM Poland was a Polish company specialising in offshore services, including logistical support for units and equipment, transport of personnel and cargo to offshore platforms, and assembly of prefabricated structures related to the construction and maintenance of marine infrastructure. As part of its projects, this company cooperated with qualified B2B subcontractors, carrying out complex undertakings for domestic and foreign contractors.

Challenge facing the offshore company:

The company was executing a contract for a foreign contractor concerning the servicing of an offshore wind farm located in the Baltic Sea, within Poland’s exclusive economic zone.

Due to the cross-border nature of the project, the company approached RSM Poland for assistance with VAT settlement, specifically requesting:

• expert support in accurately determining the country in which the services provided by the company and its subcontractors should be subject to taxation,
• establishing the correct VAT rate,
• guidance on proper invoicing and transaction documentation.

For this particular project, the key element was determining the place of supply of services in the context of VAT regulations. Our team’s determination of this point dictated the company’s and its subcontractors’ subsequent tax obligations.

How RSM Poland’s tax advisers provided support:

Drawing on experience gained in delivering comprehensive tax advisory services for enterprises implementing complex technical and investment projects, the RSM Poland team thoroughly analysed the scope and nature of offshore services and the provisions of the agreement concluded between the client and the foreign principal. As a result:

• we identified the place of supply of services in the context of VAT regulations,
• we indicated the rules for correct invoicing and application of appropriate tax rates,
• we advised on how to maintain transaction documentation in compliance with applicable regulations.

Outcome:

Thanks to RSM Poland’s support, the company obtained a clear position regarding the place of supply of services and the principles of their VAT settlement. This enabled the correct determination of tax obligations, application of appropriate tax rates, and maintenance of documentation in line with the regulations. The client was able to continue the project on the Baltic Sea with full tax security.

The approach of our team providing advisory services to companies:

At RSM Poland, we are always eager and proactive in supporting entities operating in the offshore and nearshore sectors, helping our clients navigate the complex tax environment, which includes cross-border elements, multiple jurisdictions, and the specifics of exclusive economic zones. 

The development of modern marine technologies brings unique challenges and requires a combination of specialist knowledge and practical experience. We are therefore delighted to meet clients who invite us to participate in such exceptional projects and grateful for the opportunity to contribute to these ambitious undertakings.