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A Complete Guide on Registering for Polish VAT

December 8, 2022

If you are looking to expand your company inside the European Union, Poland will be one of the most enticing options you can consider. As the sixth-largest economy in the European Union, this Central European member state is a major player on the continent.

Poland adheres to the European Union's VAT compliance as outlined in the VAT Directive. Nonetheless, the state can determine and establish its own VAT rate. The sole stipulation is that it must exceed 15%. Sellers who have a VAT number in Poland are required to charge customers the correct VAT rate and collect the tax on behalf of the Polish government.

In Poland, the VAT identification number is called the NIP (Numer Identyfikacji Podatkowej), and it consists of 10 digits preceded by letters of the country code (PL). The first 3 digits of a VAT number indicate the Tax Office that issued the number.

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When do you need to register for Polish VAT?

For foreign entities storing goods in Poland, there is no VAT registration threshold and you must be registered as a VAT payer before making your first VAT-taxable sale or engaging in your first VAT-taxable activity. If you don't pay your taxes on time, you might face penalties and fines from the government.

For local entities, if the activities are not covered by OSS, a VAT registration threshold does exist. In such scenario the threshold for VAT-taxable activity in Poland is 40 000 EUR or 200 000 PLN (as of 2022), whichever is greater. 

Example activities that are subject to value-added tax in Poland:

  • Selling taxable goods in Poland

  • Importing and warehousing goods in Poland

  • Sales of European Union-made products to countries outside the EU

  • Procuring items from inside one's own community (imports from countries belonging to the European Union).

  • Selling taxable goods from Poland to other EU States (OSS activities).

Foreign Entities

Businesses that do not have a physical presence in Poland must register for value added tax. If the firm has a fixed location for doing business, then it will file the registration with the appropriate tax authorities at that location.

Foreign companies with no physical presence in Poland may avoid having to register for value-added tax if they only engage in B2B activities inside the country's borders and ship their goods directly to a VAT registered company in Poland. In such scenario, as the goods are not stored in Poland, and the customer is a VAT registered business, it would be the customers obligation to report VAT.

Local Companies 

If you have established a business in Poland, or is your business is registered within EU, then a VAT threshold or exemption may apply.

There are two instances in which an entity may not be required to register VAT: 

  1. Based on the sales threshold during a certain period

  2. Based on the specific services or goods

In Poland, businesses are not required to register for VAT if their annual sales do not exceed 200,000 PLN (given their business activities are not covered by OSS). Once the entity reaches the threshold, the entity must complete the registration process with the local tax office in order to get the registration number.

Immediately upon getting the registration certificate from the National Court Register, the process may be initiated. When completing the application, the business management must additionally provide:

  • Registration certificate

  • Extract from the company's founding document

  • standard form that the management must complete.

Fiscal Representation in Poland

For foreign entities based outside of the EU (with exceptions of UK and Norway), a fiscal representative must be appointed in order to register and file VAT returns. It is not uncommon for the fiscal representative to charge a representation fee or in some instances require a bank guarantee (based on annual sales and other risk factors). This is because the fiscal representative is jointly and severally liable with the tax payer for any tax liabilities, as per VAT act. Therefore the fiscal representative has to settle the tax liabilities on behalf of the tax payer.

Businesses registered in United Kingdom or Norway do not have to appoint a fiscal representative or require local polish involvement to register or file VAT in Poland. But they still do need to register for a polish tax identification number, which can be time consuming and somewhat complicated.

What are the Polish VAT rates?

There are many different VAT rates available, including the usual 23% rate, 8%, 5%, 0%, and exemptions:

  • Standard Rates of 23%
     

The supply of goods and services is subject to VAT at the standard rate of 23% unless it falls under specific VAT laws that give additional rates or treatments.

  • reduced rate of 8%
     

The Social Housing Program, pharmaceutical supplies, and passenger transportation services are all examples of supplies that qualify for the lower cost of 8%. (no greater than 150 square meters).

  • reduced rate of 5%
     

Books and periodicals, in addition to raw and minimally processed foods, fall within the category of supplies eligible for a 5% discount.

  • Zero Rate
     

Exports of products to nations outside the European Union are one example of a zero-rated activity.

  • VAT-Exempt
     

Some services in the fields of finance, insurance, and education are exempt from value-added tax.

When Should You File Your VAT Returns?

In Poland, due dates are always on the 25th of the month after the end of the period. All businesses must file their VAT returns monthly, although those with annual sales of less than 1,200,000 Euros have the option of filing quarterly. You may not be eligible to file VAT returns in the following cases:

  • only having been a VAT payer for a few months

  • Delivered products or supplied services with a value in excess of 50,000 PLN (VAT excluded) in a single month during the current or preceding four quarters 

  • No provision is made for making payment through a payment instrument during months of active economic activity.

Polish law establishes when value added tax must be paid based on tax point principles (time of supply). Taxes need to be paid within 7 days of the end of a VAT reporting period. For most products, this is when you deliver or transfer title. For services, this is when you complete or fulfil the service

When Should I File VAT Returns?

In France, VAT returns are generally submitted monthly.  In some instances, quarterly or yearly VAT filings may be permitted. Small firms have the option of submitting returns annually; nevertheless, the scheme's stringent criteria make it exceptional for foreign companies.

In addition, the following circumstances determine whether regular or simplified regimes apply:

  • Simplified Regime

Companies with a turnover of between €85,800 and €818,000 in supplies of accommodation and trading activity and between €34,400 and €247,000 in supplies of services and liberal professions, and a total output VAT in the previous year below €15,000, qualify for the simplified regime (régime du réel simplifié).

  • Normal Regime

Companies having a revenue of more than €818,000 for accommodation and trade activities and more than €247,000 for services, and those whose VAT payable the previous year did exceed €15,000, are considered to be in the normal regime, or régime du réel normal.

Under the regular reporting schedule, the following time frames are used:

  • Frequency of filing VAT returns

  • Standard reporting per month as per industry standards

  • Quarterly, if for the prior four quarters, the total amount of VAT owed did not surpass €4,000. 

  • Annually, when allowed for exceptional circumstances like change of management

French VAT returns must be filed and paid between the 15th and 24th of the month after the reporting period. The specific date is determined by the relevant tax agency, which is based on the location of the business or fiscal representative.

Foreign enterprises without a permanent establishment are required to submit their VAT reports by the 19th day of the month following the reporting period. If the due date falls on a weekend or a holiday, it is moved to the next business day.

A due date will be assigned to established enterprises or non-EU businesses registered through fiscal representatives based on their legal structure and the first letter of their company name.

In France, you must use a direct debit payment system to pay your VAT. Businesses, including those without a physical presence in France, must use this system (known as "telepaiements") to remit VAT payments. It is necessary to have a bank account in France or another SEPA country (other than the UK) to proceed.

The taxpayer must register for an account with the tax authorities' website in order to set up the direct debit. The bank account information may be entered once the account has been established and activated. The last step is to get a direct debit mandate, have the authorized signatory complete it, and then submit it to your bank.

Direct debit eliminates the need to provide the bank with a reference, period, or any other information in order to process payments. The system will automatically direct the VAT payment and attach it to the filed return.

It is possible to pay French VAT by bank transfer in certain circumstances.

How to register for Polish VAT

Contact us for a free consultation if you want help registering for Polish VAT or if you are unsure whether you are required to register.

Polish VAT registration can be somewhat complicated and for a foreign entity will require fiscal representation. A sworn Polish translator is needed for candidates who are not Polish. Translation by a non-sworn translator may result in application rejection, even if this is not clearly mentioned in the rules.

Furthermore, prior registering for a polish VAT number, you must first register and obtain a polish tax identification number. Once the entity has obtained a tax identification number, only then it will be able to communicate with the tax office and apply for a VAT number.

For foreign firms, the registration for VAT is filed with:

  • the tax revenue office where the registered office is located.

  • The Second Revenue Office Warszawa-ródmiecie is used when the foreign company does not have a registered office or fixed location in the country.

The VAT application may be filed in person or electronically; nevertheless, we advise international businesses operating in Poland to contact us for further information. Our team of professionals in VAT compliance can assess your circumstances and give you personalized advice about your requirement to register.

Before we begin the registration process, it is essential that you gather the following documents:

  • Company registration certificate and Articles of association

  • Directors ID (passport copy)

  • Company Bank Letter (or bank statement)

  • Details about planned Polish operations or contracts with Polish customers (amazon.pl merchant code if selling on amazon)

  • Certificate of Value Added Tax Registration from another EU Member State, if applicable.

Once the application has been submitted, it usually takes 4-6 weeks to get a VAT number.

For more information, please contact us.

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