VAT in Poland: Complete 2025 Compliance Guide for Businesses

What Is VAT and When Does It Apply in Poland?

Value Added Tax (VAT) is a consumption tax added to the price of goods and services. In Poland, VAT applies to:

• Supply of goods and services for consideration within Poland,
• Export of goods to non-EU countries,
• Import of goods from abroad,
• Intra-Community acquisition of goods,
• Intra-Community supply of goods.

The taxable base includes everything received by the seller, including third-party payments, grants, or subsidies affecting the price.

Who Is a VAT Taxpayer in Poland?

In Poland, anyone conducting business activities independently may be considered a VAT taxpayer:

• Individuals
• Legal entities
• Organizational units without legal personality

Small VAT taxpayer status applies if annual gross turnover did not exceed:

• EUR 2 million (general businesses)
• EUR 45,000 (for brokerage and similar financial service providers)

This classification affects tax treatment and quarterly reporting options.

VAT Rates in Poland (2025)

VAT Exemptions in Poland

Exemptions fall into two main categories:

Subjective Exemption

• For entities with turnover not exceeding PLN 200,000 annually.
• If exceeded, VAT obligations begin with the first transaction over the threshold.

Objective Exemption

Covers specific industries and services including:

• Financial services (loans, currency exchange),
• Residential rental (non-commercial),
• Insurance, education, medical and welfare services,
• Cultural and sport-related

These are detailed in Art. 43(1) of the VAT Act and accompanying regulations.

Step-by-Step Guide to VAT Registration

Who Must Register?

All businesses performing VAT-taxable transactions. Foreign companies must designate a tax representative if they lack an EU establishment.

Documents Required:

• VAT-R form,
• Articles of Association,
• Register excerpts with apostille,
• Translations,
• Proof of business activity and bank accounts (if applicable).

Registrations can be submitted:

• In person,
• By post

There’s no registration fee, but written confirmation costs PLN 170.

Deregistration Conditions for VAT taxpayers

A business can be removed from the VAT register if:

• It ceases to exist,
• Cannot be contacted,
• Fails to file VAT returns for 3 consecutive months,
• Issues fictitious invoices.

Since 2023, companies can form VAT Groups to consolidate VAT responsibilities across affiliated entities.

How to Apply for VAT Refund in Poland?

A refund is possible if input VAT exceeds output VAT.

Key Steps:

• Submit VAT-7 return.
• Indicate bank account for refund (bank account must be held at a Polish bank).
• Choose refund amount (partial or full).

Basic Refund Timelines:

• 60 days: Standard period,
• 180 days: If no taxable activity occurred,
• 25 days: For VAT registered businesses with documented non-cash expenses.

Understanding the Split Payment Mechanism

In split payment, the buyer’s payment is divided:

• Net amount → seller’s account,
• VAT amount → special VAT account (automatically created by bank).

This tool combats fraud and ensures VAT funds are properly handled.

Split Payment: Transactions & Compliance

Mandatory for B2B transactions above PLN 15,000 and selected goods/services:

• Construction materials,
• Metals and scrap,
• Electronics (phones, consoles, parts for printers),
• Automotive fuel and parts.

Split payment increases refund speed and reduces risk of tax penalties.

Filing VAT Returns in Poland

• Monthly (VAT-7): Standard, due by the 25th of the next month.
• Quarterly: For small VAT taxpayers (turnover not exceeding EUR 2M).
• Returns must be filed electronically via SAF-T (JPK_V7).

The VAT White List: Purpose and Structure

The White List is a public register including:

• VAT status (active/exempt),
• Registered bank accounts,
• Company details and representatives,
• Dates of registration, deregistration, reinstatement.

Using a bank account not on this list can lead to penalties or joint liability.

Sanctions for Non-Compliance with VAT Law

Risks include:

• Loss of tax-deductible expense status (for payments over PLN 15,000 to unlisted accounts),
• Joint liability for unpaid VAT,
• Potential denial of VAT refund rights,
• Administrative penalties.

Use of ZAW-NR form within 7 days may mitigate some penalties.

How to Stay VAT Compliant in 2025?

Maintaining VAT compliance in Poland requires a consistent, well-informed approach. Here are the key principles to follow in 2025:

• Understand when VAT applies to your transactions and operations.
• Register before your first taxable activity and keep documents up to date.
• File VAT returns accurately and on time, whether monthly or quarterly.
• Use compliance tools like the VAT White List and split payment mechanism.
• Stay updated on legal changes and applicable exemptions.

With these practices in place, businesses can minimize risks, avoid penalties, and benefit from smoother tax processes.