Introduction

This article provides an in-depth look at when foreign businesses should consider Value Added Tax (VAT) registration in Poland, the benefits of such registration, eligibility criteria, a detailed registration procedure, and the ongoing obligations post-registration. Understanding these elements will facilitate a seamless entry into the Polish market and help you leverage the advantages of holding a local VAT number.

1. When Should You Consider VAT Registration in Poland?

Foreign companies should contemplate VAT registration in Poland under several circumstances:

• Supplying Goods or Services in Poland: If your business sells goods or provides services to Polish customers, VAT registration is mandatory from the first taxable transaction, as there is no registration threshold for foreign entities. VAT registration may not be necessary in certain scenarios, such as:
  • Reverse Charge Mechanism: If the responsibility for accounting for VAT shifts to the Polish customer under the reverse charge mechanism, the foreign supplier may not need to register for VAT in Poland.
  • Specific Exempt Services: Providing services that are exempt from VAT under Polish law may also negate the need for registration.
• Warehousing or Fulfillment Centers: Storing goods in a Polish warehouse, including third-party logistics centers or fulfillment centers, necessitates local VAT registration to account for goods movements and domestic sales.
• Enhancing Business Relationships: Polish business partners often prefer engaging with companies that possess a local VAT number, as it simplifies invoicing and compliance procedures for both parties.

2. Benefits of Registering for VAT in Poland

• Registering for VAT in Poland allows your business to reclaim the VAT paid on eligible business expenses (input VAT), thereby reducing the overall tax burden.
• A local VAT number can expedite the VAT refund process, improving cash flow.
• Possessing a Polish VAT number can bolster your credibility with local partners and clients, indicating a serious commitment to the Polish market.
• Proper registration ensures adherence to EU cross-border VAT rules, helping you avoid penalties or legal complications.
• A Polish VAT registration simplifies invoicing processes and can expedite transactions, especially with Polish clients who prefer dealing with locally VAT-registered suppliers.

3. Eligibility for VAT Registration in Poland

Any foreign (non-Polish) legal entity—such as a limited company, corporation, or partnership—intending to conduct taxable activities in Poland is eligible to apply for VAT registration. The Polish Tax Authorities require sufficient evidence of active business operations or well-founded plans to engage in commercial transactions within Poland.

4. Procedure for VAT Registration

Registering for VAT in Poland as a foreign entity involves several meticulous steps to ensure compliance with local regulations. Sarego Finance will assist you throughout this process, ensuring all requirements and deadlines are met.

4(a). Submission of the Registration Application

• Mandatory Signature: The VAT registration application (VAT-R form) must be personally signed by the company’s CEO or legal representative. Polish law mandates that the application cannot be submitted by a proxy without the direct signature of the owner or CEO.
• Supporting Documents: The following documents are typically required:
  • Original Articles of Association: Translated into Polish by a sworn translator.
  • Current Extract from the Commercial Register: From your home country, confirming the company’s active status, translated into Polish by a sworn translator.
  • Confirmation of VAT Registration in Your Home Country: Translated into Polish by a sworn translator.
  • Agreement with a Polish Bank: Confirming the opening of a business bank account in Poland.
  • Agreement with an Accounting Office: Indicating engagement for handling VAT settlements and related accounting matters.
  • Description of Planned Activities in Poland: Detailing the nature and scope of intended business operations.
  • Powers of Attorney: Authorizing representatives to conduct the VAT registration procedure and submit VAT declarations on your behalf.

All documents must be translated into Polish by a certified translator.

4(b). Opening a Polish Bank Account

Why do you need a Polish bank account:

• VAT Refunds: Polish tax regulations stipulate that any VAT refund can only be transferred to a bank account held with a bank located in Poland.
• Split Payment Mechanism: Participation in Poland’s split payment mechanism requires a local bank account.
• Facilitating Transactions: Clients in Poland often prefer transferring funds to a local bank account, reducing currency conversion fees and delays.
• The Polish tax authorities utilize the White List system to verify the validity of bank accounts used by businesses for VAT transactions.

Opening a Polish bank account necessitates thorough due diligence by the bank’s compliance team, including verification of:

• Corporate registration documents from your home country.
• Details of ultimate beneficial owners (shareholders, directors).
• Official translations of these documents into Polish, if necessary.

4(c). CEO’s On-Site Visit

Typically, a personal visit by the company’s CEO (or an authorized representative listed in the company’s registry) is required to finalize both the VAT registration application and the bank account opening. This visit, often completed in one day, allows for:

• Signing the VAT-R form in person.
• Providing signatures and identification as required by the bank.
• Completing any remaining compliance checks.

4(d). Electronic Access to Bank Accounts

After the account is opened, Polish banks generally provide robust online banking facilities, enabling you to manage your funds remotely from anywhere in the world. This includes making transfers, checking balances, and handling routine transactions without the need to be physically present in Poland.

4(e). Multiple Currencies (PLN & EUR)

To facilitate cross-border operations, it is advisable to open two accounts: one in Polish Złoty (PLN) and one in Euros (EUR).

5. After Submitting the VAT Application

After submitting your VAT-R form to the Polish tax authorities, the application undergoes a review process. This process may involve additional steps and requirements, depending on the specifics of your business operations:

• Additional Documentation Requests: The tax authorities may request further clarifications about your business activities, such as:
  • Contracts with Polish clients or partners.
  • Proof of transactions or planned business activity in Poland.
  • Details of your supply chain and logistics setup.
• Verification of Submitted Documents: The Polish tax office will carefully review all supporting documentation to ensure compliance with legal and procedural requirements.
• Timely Response to Queries: It is crucial to respond promptly and accurately to any requests for additional information. Delayed or incomplete responses may result in rejection of your application.
• How Sarego Finance Assists: Our team will assist you at every stage of this process, ensuring that all queries from the tax office are addressed efficiently and thoroughly to avoid delays or potential rejections.

6. Ongoing Compliance and VAT Management with Sarego Finance

Once your Polish VAT registration process is complete, you can appoint Sarego Finance to handle all your ongoing compliance tasks and ensure adherence to Polish VAT regulations. Under Polish law, our accounting office must register as a VAT intermediary for your company, allowing our team to manage all VAT-related responsibilities efficiently. These include:

6(a). VAT Record-Keeping and Invoicing

• Maintain a VAT Register: Track all taxable transactions, including sales and purchases, to ensure accurate reporting.
• Compliant Invoicing: Polish law requires invoices to include specific details such as:
  • Your Polish VAT number.
  • Correct invoice format and issuance timelines.
  • Currency conversions where necessary.
  • We recommend using Polish accounting software to ensure full compliance with local regulations. It is easy – we will show you how.

6(b). Monthly VAT Declarations and Payments

• Declaration Frequency: VAT returns are typically filed monthly.
• Payment Deadlines: Any VAT due must be remitted to the Polish tax authorities according to the declared amounts.

6(c). VAT Refunds

In certain cases, your business may be eligible to claim VAT refunds, such as when input VAT exceeds output VAT. The process involves:

• Reporting the negative VAT balance in your monthly return.
• Providing supporting documentation as required by the tax office.
• Waiting for the refund to be approved and transferred to your Polish bank account.

How Sarego Finance Assists:

• File VAT Returns: We prepare and submit your monthly VAT returns to the tax office.
• Liaise with the Tax Office: Our team communicates with Polish tax authorities to address any additional documentation requests or compliance queries.
• Ensure Full Compliance: We stay updated with evolving Polish and EU VAT regulations, ensuring your business remains compliant at all times.
• Manage VAT Refunds: Sarego Finance handles the entire VAT refund process on your behalf, ensuring all submissions are compliant and complete.

7. Step-by-Step Process for VAT Registration and Bank Account Opening

7.1 Document Preparation

Sarego Finance will guide you in gathering and preparing the necessary documents for VAT registration and bank account opening. These typically include:

• Articles of Association: Translated into Polish by a sworn translator.
• Extract from the Commercial Register: Confirming your company’s active status, translated into Polish by a sworn translator.
• Confirmation of VAT Registration in Your Home Country: Translated into Polish by a sworn translator.
• Agreement with a Polish Bank: Confirming the opening of a business bank account.
• Agreement with Sarego Finance: Stating that we will handle VAT settlements and related accounting matters.
• Description of Planned Activities in Poland: Detailing the scope and nature of your operations.
• Powers of Attorney: Granting authority to Sarego Finance to act on your behalf for VAT registration and declaration submissions.

7.2 Compliance Review and Bank Procedures

• Submission to Bank Compliance Teams: We will submit your documentation to the bank’s compliance team for preliminary checks.
• Pre-Approval and Visit Scheduling: Once pre-approved, we will coordinate your CEO’s visit to Poland for document signing.

7.3 In-Person Visit

Your CEO (or an authorized representative) will need to:

• Sign the VAT-R form and any additional documents required by the tax office.
• Complete the bank account opening process and sign documents at the bank.
• Authorize Sarego Finance as your VAT intermediary.

7.4 Final Submission and Follow-Up

• Sarego Finance will submit the VAT application to the tax office and manage all follow-up communications until the VAT number is issued.
• We will also ensure that your bank account details are properly registered in the White List system.

7.5 Ongoing VAT Compliance and Filings

• We will file your VAT returns or your behalf
• We will monitor the VAT payments and returns

Conclusion

Registering for VAT in Poland can be challenging due to the multiple steps and extensive documentation required. Sarego Finance offers a seamless, comprehensive service covering legal, tax, administrative, and accounting aspects to ensure full compliance and simplify the process for your business.
If you are exploring VAT registration in Poland or need ongoing tax and accounting support, contact us today to learn how we can assist you.