The goods and services tax (VAT) was introduced into Polish tax system in 1993. Regulations in the field of VAT have often been amended in order to harmonise Polish solutions relating to turnover taxes with the current European common system of value added tax. At present, the fundamental legal act in the scope of VAT is the Act of 11 March 2004 on the Goods and Services Tax.
Subject of the tax
In principle, VAT taxpayers are natural or legal persons as well as organizational entities without legal personality carrying out economic activity regardless of the aim or result of that activity.
Economic activity covers all activities of producers, traders or service providers, including entities obtaining natural resources and farmers as well as activities of the professions also when a business activity is performed ones, but in circumstances indicating an intention to perform it regularly.
The exploitation of tangible or intangible property for the purposes of obtaining income on a continuing basis is regarded as an economic activity.
Public authorities and offices providing service for such authorities within the scope of public tasks, excluding activities performed under civil law contracts are not treated as taxpayers.
Object of the tax
The following activities are liable to VAT:
1. supply of goods for consideration and the supply of services for consideration within the territory of the country,
2. exportation and importation of goods,
3. intra-Community acquisition of goods for consideration within the territory of the country,
4. intra-Community supply of goods.
The following activities are not subject to VAT:
• sale of an enterprise or an organised part of an enterprise,
• activities that cannot be the subject of a legally effective contract.
The VAT Act introduces specific procedures that refer to small entrepreneurs, flat-rate farmers, travel agents, supplies of second-hand goods, works of art, collector's items and antiques, investment gold, non-established taxable persons supplying electronic services within the territory of the European Union to non-taxable persons, foreign entities supplying international road transport services involving occasional carriage of passengers (effective as of 1 January 2012), intra-Community triangular transactions and travellers` tax refund system .
Intra – Community transactions
The main rule of levying VAT on trading between Polish taxpayers and VAT taxpayers registered for that purpose in different Member States of the European Union consists in the way VAT is charged, i.e. VAT on goods traded between taxpayers is generally collected in the country where dispatch or transport of the goods to the person acquiring them ends. In Poland (the country of delivery) zero VAT rate is applied ( an exemption with a right to deduction ).
In Poland business entities interested in performing commercial activities with VAT entities registered in other European Union countries (i.e. supplies and acquisitions of goods and services) are obliged to notify the head of the tax office about their intention to start intra-Community transactions.
Polish VAT taxpayers who carry out intra-Community transactions have to use their taxpayers` identification numbers (NIP) for EU transactions. Polish taxpayers' EU identification number is preceded by a prefix (country code) "PL", for instance PL9999999999.
Taxpayers who carry out IC supplies and acquisitions of goods and provide services for VAT taxpayers or for legal persons not being such taxpayers, identified for the purpose of value added tax are obliged to complete and submit recapitulative statements (VAT EU) regarding those transactions.
Recapitulative statements should be submitted on a monthly basis. The VAT Act allows, however, to submit them, under circumstances specified in the VAT Act , quarterly.
The obligation of completing and submitting recapitulative statements refers, as a rule to taxpayers performing activities such as:
• intra-Community supply of goods,
• intra-Community acquisition of goods,
• supplies under intra-Community triangular transaction,
• providing services to taxpayers or legal persons not being such taxpayers identified for the purposes of value added tax, which are liable to tax within the territory of a Member State other then the territory of Poland.