Value Added Tax (VAT) was introduced in Poland in 1993 with major reforms in 2004 to adjust the local legislation to European Union (EU) VAT rules. The country joined the EU that same year.
Tax administration in Poland is based on a hierarchy with local tax offices being primarily responsible for taxpayers’ VAT settlements based on the local jurisdiction (i.e. based on the taxpayer’s place of establishment).
Standard VAT Rate: 23%
Reduced VAT Rates: 5% | 8%
There are two reduced VAT rates of:
8% VAT Rate – agricultural services, restaurant services, maintenance services for residential buildings, etc
5% VAT Rate – books, newspapers, maps, some agricultural products, etc.
Special VAT Rates
There is also a special reduced rate of 7% applicable for flat-scheme farmers, and a rate of 4%, applicable for taxi drivers’ services.
If the turnover of a business in a 12 month period exceeds the turnover of 200,000 PLN, the VAT registration becomes obligatory for this period. Some businesses are obliged to register for VAT purposes regardless of the turnover due to supplying certain goods or services, including:
Local registration is also obligatory in Poland for all foreign entities performing taxable activities regardless of the local turnover. Businesses that do not exceed the threshold can also register for VAT voluntarily.
Some entities may not be obliged to register for VAT purposes due to performing VAT-exempt activity, including for example medical services, social security, sanitary transport, or financial and insurance services. When registering for VAT purposes in Poland, it is necessary to submit a VAT-R registration form to the responsible tax office.
The general and most common filing frequency is monthly, as the quarterly submission is voluntary and limited only to small taxpayers (i.e. with global turnover under €1.2m) after 12 months of monthly filing (i.e. it is not available for new taxpayers). Monthly filing frequency is obligatory for non-established entities registered for VAT purposes in Poland.
Regardless of quarterly VAT return submissions, the list of transactions (SAF-T) and EC Sales and Purchase List needs to be submitted on a monthly basis.
VAT returns are due to be submitted by the 25th day of the month following the reporting period.
If the deadline expires on the weekend or a national holiday, the submission is due on the next business day.
The VAT payment is also due on the same day as the submission.
Since October 2020, when the VAT return was merged with SAF-T, taxpayers in Poland are obliged to electronically submit one XML file each month. If the taxpayer uses quarterly VAT returns, they are still obliged to submit the list of transactions included in each month within the quarter in the form of SAF-T.
Prior to October 2020, the VAT return and SAF-T were submitted separately, with VAT returns in the form of an interactive PDF document being filed on a monthly or quarterly basis and SAF-T in the form of an XML file for every month.
Apart from that, the EC Sales and Purchase List needs to be filed electronically for each calendar month
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The details on a VAT invoice in crucial for establishing VAT liability on the goods or services provided, and it also enables VAT registered customers to reclaim VAT charged. There are certain requirements regarding the content of an invoice, which include in particular:
Businesses registered for VAT in Poland can appoint an agent to act on their behalf regarding their VAT compliance. If the taxpayer wishes to outsource the VAT submission to another entity, it is necessary to submit a relevant authorization form for filing returns in an electronic manner (UPL-1).
Non-EU established businesses are required to appoint a fiscal representative in Poland.
As of April 1st 2021, businesses can submit applications for registration for the Union, non-Union, and import schemes. The main goal of the so-called VAT e-commerce package is to provide an extension of the currently functioning special scheme to account for the VAT under the Mini One Stop Shop (MOSS), the creation of the One Stop Shop (OSS), and the introduction of the Import One Stop Shop (IOSS).
Under these new regulations, taxpayers can register in only one EU Member State for the declaration and payment of all EU VAT due on goods and services supplied within OSS/IOSS scheme.
The National e-Invoice System (known as KSeF) will start operating from 1 January 2022, but it is not until 2024 that its use will become mandatory. Structured invoices (e-invoices) may be issued voluntarily from January 2022, using the National System of e-Invoices with the assigned number identifying the invoice in this system.
The introduced National System of e-Invoices may be used to receive and store structured invoices. After entering invoice data, it will assign a unique identification number to this document and verify the compliance of the data contained in such invoice with the structured invoice template. A structured invoice will be considered as issued and delivered on the date the system assigns an identification number to the document.
Using e-invoices will mean:
It should be noted that the scope of information that will be available on e-invoices is significantly wider than based on the current VAT regulations. Therefore, the Polish Ministry of Finance is still working with the European Commission to ensure that it is granted a derogation to demand more information from the taxpayers than allowed in the EU VAT Directive.
From 2022 it will be possible to create VAT groups. This will allow the taxpayers that are part of one capital group to jointly settle VAT obligations. This means that the transactions conducted within one VAT group will not be subject to VAT and that tax neutrality within the VAT group will remain.
A given taxpayer will be able to be a member of only one VAT group. The VAT group will also not be able to be a member of another VAT group to prevent the creation of multi-level structures.
The solution provided for in the project has voluntary nature, allowing for independent decisions of enterprises as to their will to use from the solution.
As a result of the changes to e-invoicing, the VAT SAF-T structure will also change, allowing the taxpayers to use the newly enforced regulations. The new scheme shall be applied from the submission for reporting period of January 2022.
Another important change is coming with new VAT SAF-T structure is abolishment of the requirement to submit the voluntary disclosure letter in case of self-revised submission of JPK_V7 that involved changing individual records of the file.
In Poland, some tax offices have been specifically assigned to large taxpayers
Furthermore, there is one special tax office dedicated to taxpayers who do not have an establishment in Poland (i.e. local registration of foreign entities) – Second Tax Office Warsaw-Downtown (Drugi Urząd Skarbowy Warszawa-Śródmieście).
Any decision issued by the tax office can be appealed to the tax authority of the second instance, operating as one per region (voivodeship), in accordance with the regional tax rules.
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