VAT Tax in Poland

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VAT or Value Added Tax is an indirect tax that is levied on the sale of goods and services. This tax is also known as GST (goods and services tax) in some countries.

The actual official name of the VAT Tax in Poland is “goods and services tax” (PTU — Podatek od Towarów i Usług), however the English term VAT is almost exclusively used both officially and in practice to describe the Polish value-added tax.

Polish goods and services suppliers tax the customer the appropriate tax rate and collect the tax for onward payment to the National Tax Administration — Urząd Skarbowy.

VAT payable is also called output VAT.

As modern Polish regulations on VAT are based on the applicable EU legislation, the general principles of VAT taxation are usually similar to those applied in other EU member states.

In accordance with the current EU legislation value-added tax is generally paid by every citizen of any EU member state, therefore the equivalents of the Polish Goods and Services Tax are also levied in the neighbouring countries:

  • Czech Republic (DPH – Daň z přidané hodnoty) and
  • Germany (MwST (Mehrwertsteuer).

However bear in mind, that the rates are set by EU member countries individually, therefore there is no universal EU VAT rate.

The current standard VAT rate used in Poland is 23%.

Furthermore under current EU legislation member may choose certain services and products to be subject to reduced rates, however those are set by the countries individually as well.

Scope

In Poland general issues of tax law are regulated by the the VAT Act of the 11th of March 2004 (Dziennik Ustaw [Journal of Laws]. of 2004, No. 54, item 535 as amended)  link to the original.

In accordance with the Polish VAT provisions, all entities who have the status of a VAT Taxpayer (Płatnik VAT) are subject to VAT payments.

  • All legal entities registered in Poland, such as Sp. z o.o. (LLC);
  • Persons providing services as individual entrepreneurs/sole traders (działalność gospodarcza);

All VAT taxpayers are required to comply with the current Polish VAT rules and rates, as well as all current accounting procedures.

All VAT taxpayers are required to obtain the so-called EU VAT number if they are planning on conducting transactions with other EU members.

Please remember that all Polish VAT liabilities are calculated in the national currency PLN (Polish Złoty), and cannot be payed or filed in EUR, USD or any other currency.

VAT rates and filing

The standard, basic VAT rate in Poland is 23%. At the same time, as in other countries, Poland also has a number of exceptions for goods and services to which the so-called preferential or reduced VAT rate.

Here are a few examples of reduced VAT tax rates:

  • 8% — some construction works;
  • 8% — pharmaceutical products and medical equipment for disabled;
  • 5% — some agricultural supplies;
  • 5% — certain books (including e-books) and specialist periodicals;
  • 0% — EU import/export related services.

Please remember, that if you’re running an IT company in Poland and provide services to businesses:

  • based in another EU country
  • based in a non-member state

you do not need to charge your customers Polish VAT. However your Polish company may still deduct the VAT you paid on related expenses the so-called input VAT.

The Polish terms for Input and Output VAT that you may encounter are:

  • VAT należny (output VAT);
  • VAT naliczony (input VAT).

When filing VAT reports, we calculate your business’s liability by deducting the so-called input VAT against the output VAT you owed to the Polish Tax authorities for the same period.

Monthly VAT tax reports must be filed by the 25th of the month following the month during which the obligation arose.

Quarterly VAT tax reports must be filed by the 25th of the month following the quarter during which the obligation arose.

All Polish VAT taxpayers are obliged to keep their business’s accounting recorders under the currently applicable national laws, mainly in accordance with the Polish Accounting Act (Dziennik Ustaw [Journal of Laws] 1994, No 121, item 591, as amended).

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