VAT Registration in Poland
If you’re looking at expanding your business within the European Union, Poland will surely be on your radar as one of the most appealing possibilities. Well before you get your business established, it is crucial to understand the various types of legal taxes that are applied to Poland businesses, one of them being VAT tax.
In this article, we will be briefing you about the process of VAT registration in Poland & the various document expected for VAT registration in Poland.
Overview of VAT
VAT identification numbers (VATIN) are used widely across the world, but in various countries, under different names and in Poland it is known as the NIP ( Numer Identyfikacji Podatkowej) & is composed of 10 digits, foregone by the letters of the country code (PL).
For those who are looking to identify specifics, the initial 3 numbers indicate that it was the Tax Office which issued the VAT number. The following VATIN could be an example of what a NIP could be such as PLU2563237087.
The Vat number for a foreign country is essential to keep goods safe & when thresholds are exceeded. The threshold for transactions in the EU of 10000 EUR annually in sales to various countries, & beyond that the person is expected to be registered in each country where transactions occurred.
The process of VAT registration in Poland must be completed before an organization is allowed to conduct the first tax-deductible transaction.
Process of VAT registration in Poland
If you have already begun your business or thinking of opening a firm in Poland, though it is a must you should be aware that, some of the registrations are compulsory, & VAT registration in Poland is not imposed. Some of the businesses may be eligible to be exempt from registration.
As there are two scenarios where a company is not required to register depending on the volume of sales during the time frame and the other following the particular products or services provided by the business. Investors must first decide which of these two categories they fall into.
Businesses are not required to be registered for VAT purposes in Poland if the sales made during the tax year are not more than 200,000 in Polish PLN. In this instance, business owners must complete the registration process at their Local Tax Office to get their registration numbers.
The process can begin right away after receiving a certification of registration at the National Court Register.
While filling out the application the manager of the company must provide:
- The registration certificate
- Extract from the deed to the company’s foundation
- The form is a standard one to be completed by the supervisor.
It is important to distinguish between businesses that are registered as well as those that are still being formed and are hoping that sales will be more than the limits.
Investors can determine the days remaining until the close of the year, and then multiply it by 200,000 and then divide it by 365 to calculate a number which will allow them to determine which firm will be registered.
The most important steps to take in the process of VAT registration in Poland are these:
To register an investment company:- Investors have to first sign up for the company in Poland through Poland’s National Court Register (KRS) as well as it must be registered with the Central Register and Information on Economic Activity (CEDIG).
Prepare the documents:- they will differ depending on the fact that the firm is incorporated in Poland Foreign firms are required to supply the Articles of Association of the foreign entity, among other things.
Pay the fee to pay the charges:- this is an optional step since the VAT registration process within Poland is free. However, investors who need confirmation of registration must pay 170 PLN.
To register as a VAT payer:- the VAT-R form must be made electronically or on paper to an office of the municipality.
Meet the conditions:- Once registered the taxpayer must adhere to the regulatory obligations to keep meticulous records of VAT.
If the company has not applied for registration and over the VAT exemption, every subsequent sale following the 200,000 Polish PLN will be taxed at VAT. It is believed that in this situation the exemption is not applicable anymore and the company should be registered as a taxpayer for VAT in Poland.
Read More: Taxes In Poland
Documents for VAT registration in Poland
It is the Polish tax office requires companies to submit the forms NIP-2 (tax identification number form) and VAT-R (the VAT registration form) together with the following documents.
Here is the list of all the essential document that is expected at the time of VAT registration in Poland.
- VAT certificate to verify that the company is registered for VAT outside of the EU where applicable.
- Articles for Association.
- An excerpt from the national trade register of the company.
- Original copy of the letter of agreement of the Polish bank in which the account of the business is kept.
- A statement regarding the company’s established position in Poland to be VAT-compliant
- Description of the tasks to be conducted in Poland.
- The power of attorney when the use of a fiscal representative.
- If a VAT compliance service is employed it is necessary to sign an agreement with the entity that is providing the service must be provided.
All copies of documents should be translated into Polish by a licensed translator and verified by an official notary.
When to sign up for VAT registration within Poland?
In general, an international business has to be registered for VAT in Poland when the taxable supply has been made.
These are the most common examples of taxable transactions:
- Supply of domestic goods that are not reverse-charged: The delivery of goods from Poland to a Polish client whose purchase does not fall under reverse charging is a requirement for VAT registration for the provider.
- Export: Shipping products to countries outside of the EU will require a VAT number before the export is completed.
- Acquisitions within the EU: Purchasing goods from a different Member State that meet the requirements for intra-community transactions are met, and the buyer is required to sign up for VAT.
- In-Community supply: The supply of goods from a different member state is a taxable transaction, which requires the seller to register for VAT.
- Distance sales: If they are appropriate if the Seller is not part of OSS. Check out the E-commerce handbook for further details.
Foreign businesses that offer particular services within Poland are not required to be registered for Polish tax when they offer:
- Goods and services for which the Polish buyer is liable for the VAT (reverse cost).
- Certain services are covered by the zero rates, look up the list of the services that are covered by the Regulations by the Minister of Finance on the selection of taxpayers not required to apply for registration.
The possibility of a backdated registration exists. Look below for backdated registrations and regularizations for further details.
The threshold for registration of VAT for established Poland businesses is PLN200,000. This threshold does not apply to companies that aren’t established.
When is it compulsory for VAT registration in Poland?
When a company is obliged to obtain a Polish sales tax number regardless of the amount of the sales:
- Selling and buying items in Poland.
- Importing products to Poland from outside of the European Union.
- Acquiring products in Poland from an EU member (Intra-community purchases).
- Selling products from Poland that are shipped to customers who are not from Poland (private clients or businesses).
- Online retail sales of goods to consumers are subject to VAT Distance Selling registration thresholds.
- Stock held in Poland for distribution, sale or consignment.
- Organising events in Poland in which attendees or delegates have to pay for admission.
Keep in mind that the above examples can be used as an overall guideline. It is strongly recommended to speak with an Odint Consultancy expert. Once you start or plan to establish a business within Poland by 2021 determine if the commercial activities you conduct require you to sign up for VAT purposes.
Polish VAT grouping
In cases where more than one tax-paying person in Poland is closely linked to each other by financial, economic or organisational links, these businesses may form VAT groups and be considered to be one taxable individual to be treated as a VAT-paying entity in Poland.
In terms of the VAT group’s criteria, financial links can be found if more than fifty per cent of the shares owned by an individual member are directly or indirectly owned by the same individual or company.
Organizational links are the management of the group’s members, whether directly or indirectly. Economic links are created when the activity and purpose of members are based on the same objective and aim and benefit the entire group.
Additionally, the following VAT grouping rules are in effect in Poland:
- Permanent establishments and branches may also be part of the Polish VAT collection.
- VAT grouping is an option VAT grouping is not mandatory in Poland. Companies can apply for VAT grouping if they meet the conditions or remain as separate entities to avoid VAT.
- When the application is accepted the VAT group number is issued to an organization.
- In-group transactions are not considered to calculate VAT. However, they are required to keep track of the transactions.
- Each participant in the group will be jointly and separately accountable for the penalty and VAT debts of the whole group.
- The minimum period for VAT groups can be three years.
- The members of a VAT group file the same VAT return. It isn’t possible to submit separate VAT returns for each entity.
VAT Refund in Poland
To receive a tax refund for VAT in Poland residents, a business must apply to the Director of the Second Tax Office in Warsaw. Foreign entities are not required to submit a return of VAT within the Member State where they paid VAT.
To collect VAT that was retained on local purchases of services and goods, companies are now able to apply to Polish tax authorities via the tax authorities in their home country.
The application has to be submitted by September 30, the calendar year that follows the period of refund. Alongside an application for tax relief, the tax-liable entity is required to submit supporting documents like invoices, and customs duty papers as well as the tax certificate of residency from the country of the applicant.
It generally takes four months for tax authorities to consider the application. If the refund isn’t given within the deadline, the company is liable to penalties and interest. There are also specific times that need to be considered.
It is, for instance, not possible to claim a tax refund for VAT in Poland for periods shorter than three months, or more than one calendar year. Once the Polish authorities have completed the verification of the claim and the papers and the tax amount is verified, it will be paid to the person who submitted the claim.
The VAT Act prohibits the tax deduction for input VAT on hotel services as well as the purchasing of fuel for cars. Tax refunds are usually paid to the account of the bank indicated by the taxpayer, however, they may also serve as the security to a loan.
Important conditions to file and report VAT in Poland
Polish businesses that are registered taxpayers must complete quarterly or monthly tax returns and keep books of the transactions and sales that are VAT-exempt. Businesses that register as VAT and conduct their business at an intra-community level are required to file the “EC sales and purchase list” which is a form which is filed each month.
VAT returns are filed through an electronic system & the surplus of VAT on output over the input VAT has to be paid within 25 days of the close of the month when the tax obligation occurred. Refunds are possible when the VAT input is greater than that of the outgoing VAT.
Taxpayers who pay VAT in Poland who do not meet their obligations face penalties under the Criminal Fiscal Code.
When a VAT debt arises, the business is required to pay the amount due along with any penalty interest. The team at our disposal of corporate formation specialists in Poland can provide more details on the laws and penalties that apply.
taxpayers in Poland who are VAT-exempt must document their transactions. This is accomplished with the aid of invoices. As per the laws, each of these documents should contain specific details to be recognized as evidence of payment.
The basic specifications for invoices stipulate that they must contain the following information regarding the transaction:
o Name of the seller as well as the address of the seller;
o Name of the buyer, as well as the address of the buyer;
o Their Polish Tax identification number;
o the invoice number, which is a sequential number;
o the date of issue, also known as the date that the merchandise was delivered and received
o the name and type of products in addition to the unit of measurement for the number of goods sold;
o The unit price of the product, minus the applicable VAT;
o The value of the products or services, minus the VAT applied (the total value);
o the rate of VAT calculated;
o the value net of the products and the services (total);
o the total amount due which includes VAT.
If the value of the invoice is not more than 450 dollars or around 100 euros, the company can issue invoices that are simplified (these may not include aspects like the net value or measuring unit, and an estimate of the unit cost).
In all instances, the invoice should contain the required information to calculate what amount of VAT follows the specific rate that applies to the product or services that an invoice has been issued.
Intra-community VAT works in Poland
To perform intra-community transactions with or from a distinct firm within one of the Member States of the EU, the tax-paying entity must inform, the tax officer in charge of the Tax Office.
It should be by making a formal notification before the time of the first purchase or supply of goods occurs. In this manner, the business is legally registered in the EU as an EU taxpayer and its status is verified, making it capable of carrying out the transaction.
The purchase of items is subject to taxation by Poland however, when the goods are shipped to an EU country, the VAT will need to be paid in that state.
The VAT number for the foreign country is essential to keep goods safe & when thresholds are exceeded. The process of VAT registration in Poland must be completed before an organization is allowed to conduct the first tax-deductible transaction.
Odint Consultancy is ready to offer a variety of business formation services or VAT registration in Poland. Contact us for more information and a customized quote.
In Poland, the standard VAT rate for goods and services is 23%. A lower amount of 8.8% covers for instance sweet pepper, mustard (spice) certain refined and non-processed spice. The other type rates are 5%, and taxes like citrus and tropical fruits or hygiene-related items. Transports within the community have a tax rate of 0%
The typical VAT return time is every month. However, you can select between quarterly and monthly when filling out this VAT-R-form. Tax returns can be made online or manually.
For both quarterly and monthly returns, the due date is the 25 day of the month. The 25th calendar day follows the tax time.
Once all the documentation has been provided to officials and registration complete, it can take up to two weeks before you get your Polish VAT number.