Poland: Summaries of recent Supreme Administrative Court decisions
Meaning of “turnover” under VAT margin scheme; VAT on free-of-charge transfer of real estate; remote work does not create PE; cooperation agreement does not create related entities
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november 4,, 2025
The Supreme Administrative Court recently held that:
- The term “turnover” used in Article 90(3) of the Value Added Tax (VAT) Act means the value forming the basis for calculating output tax (i.e., the taxable base). Because under the VAT margin scheme rules, only the margin constitutes the taxable amount and the tax due is calculated solely on that basis, the margin must be used when determining the proportion (case file I FSK 1498/22).
- In the case of a free-of-charge transfer of real estate (land with a building) to the individual property of spouses, only the building is subject to VAT as goods produced by the taxpayer, for which the taxpayer has exercised the right to deduct input tax. The land itself, however, is not subject to VAT at the time of its free-of-charge transfer (case file I FSK 1762/22).
- Remote work activities in which the employer provides employees with computers do not give rise to a permanent establishment (PE) under Article 4a(11) of the CIT Act and Articles 5(1) and 5(5) of the Poland-Germany income tax treaty, because the mere transfer of laptops to employees does not constitute the allocation of space by the company for its own use (case file II FSK 163/23).
- Mere entry into a cooperation (consortium) agreement does not render the contracting companies related entities within the meaning of the CIT Act (case file II FSK 1164/24).
Read a November 2025 report prepared by the KPMG member firm in Poland