Poland: Clarifications regarding VAT grouping; criteria for identifying a fixed establishment for VAT purposes

Recent tax developments in Poland

Criteria for identifying a fixed establishment for VAT purposes

The KPMG member firm in Poland prepared a report concerning the following value added tax (VAT) developments:

  • The Ministry of Finance on 14 October 2022 issued tax clarifications on VAT groups, which allow the taxpayers forming them to settle VAT as a single entity. The provisions are scheduled to be effective on 1 January 2023, and the clarifications concentrate on (1) prerequisites (conditions) for forming VAT groups, and (2) rules of making VAT settlements in the course of group operation and issues related to the termination of group activities.

    A lot of focus was placed on the rights and obligations in force in the transitional period. Importantly, according to the Minister of Finance, a VAT group is to be treated as a new taxpayer and, consequently, may enjoy subjective or objective exemption from the use of cash registers under general principles, while the formation of a VAT group will not be perceived as a tax scheme reportable to the Head of the National Revenue Administration.

  • The Supreme Administrative Court issued a decision (case file I FSK 396/21, 11 October 2022) in the case of an EU company, whose activities included moving its own goods from Poland to warehouses located in other EU countries (and vice versa). The company was registered as an active VAT payer in Poland, was not the owner of or party to any contract in relation to commercial real estate located in Poland, did not employ any staff domestically, and purchased logistics services from service providers. The company was not sure whether it would be treated as having a fixed establishment within the territory of Poland. In the opinion of the court, the emphasis should be on whether, in addition to using resources, the taxpayer had any rights to dispose of the resources as if they belonged to the company. In the case at hand, the use of resources under contracts with service providers did not translate into the company’s right to dispose of such fixed resources.

Read an October 2022 report prepared by the KPMG member firm in Poland

Other developments included in the report concern:

  • Minister of Finance’s reply to the inquiry on obligations of partners in real estate companies
  • Gas grids are structures
  • Costs of transport of posted workers in individual (personal) income tax
  • Definition of debt financing costs
  • Remitter’s obligations in case of voluntary redemption of shares in a limited liability company
  • New personal allowances and tax scales in inheritance and donation tax from 13 October 2022


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