What does this guide contain?
The guide provides you with practical VAT information for Poland:
- Your VAT registration in Poland
- Your VAT obligations TVA in Poland
- The invoicing rules in Poland
- A VAT credit refund in Poland
VAT REGISTRATION IN POLAND
When do you have to register for VAT?
It is mandatory for your company to apply for VAT registration with the Polish tax authorities before starting your activities. Financial penalties may apply if the application for registration is submitted late.
What documents do I need to provide when I register?
If your company wishes to register for VAT in Poland, it is essential to contact the Polish tax authorities. There is no need to contact the tax authorities in your country of establishment.
In particular, your company will need to submit the following documents:
- The VAT registration form(s) completed in the language of the country
- A copy of the articles of association
- An extract from the trade register
- A certificate of VAT liability
- Power of attorney (if using a fiscal agent)
- Proof of activity on the territory of the country concerned: a contract, an order form, etc.
The Polish tax authorities may require some of these documents to be translated into Polish.
How long does it take to get a VAT number?
If your file is complete, it generally takes one month to obtain the VAT number from the competent Polish tax office.
Is a fiscal representative necessary?
Polish VAT authorities may require non-European companies to appoint a fiscal representative. This is a local company that will represent you to the local VAT authorities. He is responsible for the respect of all your VAT obligations, including those of which he was not aware. For this reason, he may require a deposit (e.g. a bank guarantee) from you before accepting the representation assignment.
European companies are not obliged to appoint a tax representative. However, to facilitate their relations with the local tax authorities, they may appoint a proxyholder to carry out the tax formalities on their behalf. In this case, it is not necessary to issue a bank guarantee. The company remains solely responsible for paying its VAT debts.
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VAT OBLIGATIONS IN POLAND
Is it necessary to keep VAT accounting ledgers?
Your company must keep ledgers sufficiently detailed to enable the application of VAT and its control by the Polish tax authorities.
When do you have to file a VAT return?
Your company has to report its VAT position by filing periodical VAT returns [VAT-7] on a monthly basis (standard tax period). Quarterly reporting period can be opted for under specific conditions.
The VAT return must be filed electronically by the 25th day of the month following the end of the taxable period [month/quarter] to which it relates.
Since 01/07/2015, a sales listing for all sales subject to reverse charge needs to be filed with the Polish tax authorities (specific excel format necessary).
The VAT expert's eye
Member States set the duration of the taxable period at one, two or three months. However, they may set different periods provided they do not exceed one year. The VAT return must be submitted within a period to be determined by the Member States. This deadline may not be more than two months after the end of each taxable period (Art. 250 of the VAT Directive).
Do I have to submit an annual return?
Your company is not required to file an annual recapitulative VAT return.
The VAT expert's eye
Member States may require the taxable person to file a return containing all the data referred to in Articles 250 and 251 and concerning all transactions carried out during the previous year. This return shall include all the information necessary for any adjustments. They authorize, and may require, the return to be made by electronic means under conditions which they determine (Art. 261 of the VAT Directive).
What is the deadline for paying Polish VAT?
The company must pay the VAT due no later than the 25th day of the month following the taxable period. Please note that penalties for late payment of VAT may range from 20%, 30% or 100% of the VAT due, and interest on arrears of 200% of the interest rate applied by the National Bank of Poland.
Since November 1st, 2019, obligatory split payment was introduced in Poland. The obligation to apply the split payment mechanism covers goods and services mentioned in the Annex 15. This list includes in particular: construction work, regardless of the status of the seller.
The VAT expert's eye
Every taxable person who is liable for the tax must pay the net amount of VAT when filing the VAT return. Every taxable person who is liable for the tax must pay the net amount of VAT when submitting the VAT return. However, Member States may set a different deadline for the payment of this amount or collect instalments (Art. 206 of the VAT Directive).
Are interim payments required ?
Taxpayers filing VAT returns on a quarterly basis must process monthly interim payments ["Pre-Payments Option"]. Payment should be filed by the 25th day of the second and third months of the quarter in the amount of 1/3 of the tax due for the previous quarter. A taxpayer may also opt for calculating the interim payments monthly on the basis of transactions actually carried out in a given month [Actual Payments Option].
Payment of VAT to micro accounts
As from January 01, 2020, the VAT due to the Polish State has to be transferred to a specific Polish bank account (so called “micro account”), which is different for each taxpayer. The individual bank account number of foreign taxpayers will in principle include their 10-digit tax number (NIP). The transfer of money to the former bank accounts of the Polish State is no longer possible.
When should the intra-EU statement be filed?
The recapitulative Statement [ESL] must be filed on a monthly basis. Taxpayers can however opt for filing the statement on a quarterly basis under specific conditions.
The Statement must be filed by the 25th of the month following reporting period.
The eye of the VAT expert
A recapitulative statement is drawn up for each calendar quarter within a period and according to procedures to be determined by the Member States. However, Member States may provide for recapitulative statements to be submitted on a monthly basis. Member States may allow, and may require, recapitulative statements to be submitted electronically under the conditions they determine (Art. 263 of the VAT Directive).
INVOICING RULES IN POLAND
Does the invoice have to include VAT? Reverse Charge?
As a supplier of goods or services, your company is normally obliged to issue an invoice with VAT to its customer. This is the general rule. However, there are many derogatory situations which transfer this obligation to pay tax to the customer himself. These situations are known as "reverse charge" situations.
The special reverse charge rules have been introduced in Poland for foreign companies:
For supplies of goods:
Reverse charge mechanism is applicable to all domestic supplies of goods provided that the customer is established and VAT registered in Poland.
In case the foreign supplier is VAT registered in Poland [he has opted for or has other activities for which he needs a VAT number], reverse charge is no more applicable.
For supplies of services:
Reverse charge mechanism is applicable to all domestic supplies of services provided that the customer is VAT registered [regardless established or not] in Poland.
In case the foreign supplier is VAT registered in Poland, reverse charge for services connected with immovable property is no more applicable.
What are the mandatory mentions on an invoice?
The VAT Directive lays down the minimum information that you must include on your invoice. In some cases, countries may add additional compulsory information. Particular attention should be paid to the conversion rates when the currency used on the invoice is not that of the country in which the transaction takes place, and to the specific statements justifying the legal reason why VAT is not charged.
What VAT rate should be mentioned on an invoice?
Poland has 3 different VAT rates :
- Standard rate : 23%
- Intermediary rate : 8%
- Reduce rate: 5%
The eye of the VAT expert
As of July 1st, 2020 a new VAT rates matrix will come into force. It will include the new list of goods and services subject to 8% and 5% VAT (new Annexes No. 3 and 10 to the Act) based on CN codes and PKWiU 2015 (Polish classification of goods and services)
VAT REFUNDS IN POLAND
How can I recover VAT in Poland ?
There are several methods to obtain refunds of Polish VAT. The practical formalities for reclaiming foreign VAT will differ depending on whether or not your company is established in Europe and/or is identified for VAT in Poland:
- If your company has a VAT number in Poland, it will have to submit a refund application in the form and within the timeframe required by local regulations. A VAT credit is in principle automatically carried forward to the next period, unless a tax refund has been applied for.
- If your company is established in a European country and does not have a VAT number in Poland, it will have to apply for a VAT refund electronically from its country of residence, in the form and within the time limits required by Directive 2008/9.
- If your company is established outside Europe and does not have a VAT number in Poland, it will have to appoint a tax representative to submit its refund application in the form and within the time limits required by the 13th Directive.
Is Polish VAT recoverable on all expenses?
VAT incurred on purchases, imports or intra-Community acquisitions of goods and services can be reclaimed by a foreign company provided that these expenses are for taxable activities and provided that the appropriate documentation is available.
However, no input VAT can be recovered on hotel accommodation and catering services.
The eye of the VAT expert
VAT on invoices received before the month preceding the VAT registration in Poland can in principle not be deducted anymore if it relates to taxable activities in Poland (reception stamp could suffice to deny any deduction claim).
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