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Business owners’ ambition to increase wealth grows, and with it their activities and businesses. Significant development expands the market and the list of potential customers. But how can you enter a foreign market while meeting legal requirements in Poland and abroad?
The obligation to register for EU VAT
After joining the European Union, accessing EU markets became much easier, encouraging more frequent trade with those countries. We call these exchanges intra-Community transactions.
For these transactions, remember the specific EU VAT settlement rules. They involve tax being settled by the buyer where the buyer has its registered office or residence.
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Who must register for EU VAT?
We must register if we want to:
- Conduct transactions with EU businesses.
- Conduct intra-Community transactions while using VAT exemption because turnover does not exceed PLN 200,000, and:
- The value of intra-Community acquisitions of goods exceeded PLN 50,000 in the tax year.
- We want to supply intra-Community services for which the buyer’s country is the place where transaction tax is settled.
To register, complete and submit the appropriate documents to the tax office. The notification is made on VAT-R. If already registered for VAT, we only need to submit an update on that form.
Once registration is complete, the relevant tax office assigns an EU VAT NIP. We then use our tax identification number in the EU with the PL prefix.
An active VAT taxpayer and EU VAT registration
Active VAT taxpayers must register for EU VAT before the first transaction in the following cases:
- Purchasing goods from EU business partners.
- Selling to an EU buyer who is also required to register.
- Purchasing services where the place of supply is the buyer’s country: the buyer must settle VAT.
- Providing services to EU entities where the place of supply is the country where the buyer conducts business or resides.
EU VAT registration and VAT exemption
Where we are taxpayers exempt because of exceeding PLN 200,000 turnover, the obligation to register for intra-Community transactions still applies. However, it applies only in specified situations:
- Purchasing from EU business partners where the country of supply is the buyer’s country. The buyer must both register for EU VAT and settle VAT on the transaction.
- The value of intra-Community transactions in a tax year exceeded PLN 50,000.
- Providing intra-Community services where the buyer’s country is the place of tax settlement.
Deadlines for submitting EU VAT returns
Both active and exempt taxpayers registered for EU VAT must submit monthly EU VAT recapitulative statements exclusively electronically.
The statement must reach the tax office by the 25th day of the month following the reporting period in which the intra-Community transaction took place.
Removal from the EU VAT taxpayer list
The head of the tax office may remove us from the EU VAT taxpayer list when:
- We fail to submit EU VAT recapitulative statements for three consecutive months.
- For three consecutive months or a quarter, the JPK_V7 section shows no sales or purchases of goods or services with deductible tax amounts.
Remember that only in the second case does the head of the tax office notify us of removal.
VAT registration in non-EU countries
VAT registration outside the EU can be particularly challenging for businesses seeking an international presence. Non-EU countries have different tax systems, and registration may require knowledge of specific tax rules.
Registration requires strict procedures and specified requirements to be followed. Foreign businesses are usually advised to use advisory services or engage a local tax adviser to help navigate the process.
How should you approach it?
First, the company should determine whether it must register in the particular country. Some countries require VAT registration only when a business performs particular activities, such as selling or renting services or products. Our businesses usually also need to register at the local tax office to pay taxes by the required deadlines.
The next step is obtaining a VAT registration number. We must supply specified documents, including identity evidence, contact details and information about business activity. After registering the VAT number, the company must periodically submit returns and pay the appropriate taxes.
Interested in this article? Explore our tax advisory services and see how we can help:
Summary
International trade requires checking registration duties before the first relevant transaction. The article outlines Polish EU VAT registration, reporting and removal rules, then describes the separate assessment needed outside the EU. Registration is followed by ongoing filing and payment obligations.
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