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Changing a business location requires appropriate action under current law, including submitting the necessary notifications. The move may have tax and accounting consequences. Read on for an explanation of relocating a business to another town!
Where should a business relocation be reported? CEIDG and KRS notifications
Every business relocation must be reported.
For activity entered in the Central Register and Information on Economic Activity (CEIDG), the entry must be updated. The application wizard on Biznes.gov.pl lets you do this electronically in a few minutes. Postal submission or an in-person visit to the office remains possible if you do not want to use the official website.
Regardless of submission method, updating CEIDG simply requires completing form CEIDG-1, the same one used to register the business.
Under Article 15(1)(1) of the Act of 6 March 2018 on CEIDG and the Business Information Point, you have only seven days from the change to update the CEIDG entry!
For companies, the company's address and registered-office location are considered separately. Both are entered in the National Court Register (KRS), under Article 34(1)(3) of the Act of 20 August 1997 on the National Court Register. Every legally operating company in Poland, except civil-law partnerships, appears there. Changes to the address or registered office must therefore be reported to KRS, again within seven days.
The only available method for notifying KRS is electronically, via the S24 portal or Court Registers Portal.
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Tax consequences of moving a business: competent tax authorities
After making the necessary notifications, consider the principal tax consequences of a move.
Article 17 §1 of the Tax Ordinance Act of 29 August 1997 says: “Unless tax laws provide otherwise, the territorial jurisdiction of tax authorities is determined by the taxpayer's place of residence or registered-office address […]”.
The general rule, absent special provisions, is that tax jurisdiction depends on:
- Place of residence for individuals;
- Registered-office address for companies.
Changing either detail, often part of a relocation, may therefore change the tax authority responsible for you.
For personal income tax, or PIT, your place of residence is decisive in practice. If it changes during the tax year, settle with the authority competent on the day the tax return is submitted.
For corporate income tax, or CIT, territorial jurisdiction follows the legal entity's registered-office address, recorded in the register or possibly in its articles or company agreement.
Value added tax, or VAT, is settled with the tax office competent for:
- Place of residence of an individual;
- Registered office of a legal person or organisation without legal personality.
Can relocation expenses be deducted? What about VAT?
When discussing tax and accounting consequences, consider relocation expenses, their tax deductibility and deduction of the associated input VAT.
Expenses related to changing business location, such as moving, adapting premises or buying equipment, can generally be deducted if actually incurred to earn revenue or maintain or secure its source.
On purchase invoices related to the move, you generally may also deduct input VAT from output VAT, provided all conditions in Article 86 of the Value Added Tax Act of 11 March 2004 are met, particularly that the purchased goods and services are used for taxable activities.
If you found this article interesting, explore our tax advisory services and read how we can help you:
Summary
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