E-Commerce & B2C Services in Poland
Poland’s VAT Act was updated to integrate the principles of the EU VAT e-commerce package into its national VAT law, reflecting significant changes that took effect on 1 July 2021. This EU-wide package replaced the existing distance selling rules and expanded the Mini One Stop Shop (MOSS) framework.
It brought notable changes to VAT rules for business-to-consumer (B2C) supplies of goods and services, affecting both EU imports and intra-EU trade. The package introduced a new, significantly reduced PAN-EU VAT threshold of EUR 10,000 (and EUR 0 for businesses outside the EU), broadening the range of supplies on which VAT must be accounted for.
Beginning 1 July 2021, all business-to-consumer (B2C) sales of goods to EU consumers will be taxed in the destination member state because of this package. Additionally, VAT reporting is done through “One Stop Shop” (OSS) systems, which enables vendors to declare and pay VAT through a single member state’s tax portal. An Import OSS (IOSS) system enables suppliers and electronic interfaces that sell imported goods into the EU to collect, declare, and pay VAT on their behalf to tax authorities, rather than the buyer paying VAT when the goods clear customs.
OSS, however, is an optional procedure. Thus, VAT can be settled on intra-Community distance sales of goods and on all types of cross-borders B2C services with the Member State of consumption as the place of supply (up to now, this was possible solely for electronically supplied services and similar of the kind).
Key changes from 1 July 2021 include:
- All B2C sales of goods to EU consumers are taxed in the destination member state.
- VAT reporting for these transactions is streamlined through the “One Stop Shop” (OSS) system, allowing sellers to declare and pay VAT via a single member state’s tax portal.
- The Import One Stop Shop (IOSS) system facilitates VAT collection, declaration, and payment for suppliers and electronic interfaces selling imported goods into the EU. This system shifts the VAT payment from the buyer at customs to the seller at the point of sale.
The OSS is an optional process, meaning VAT can be settled on intra-Community distance sales of goods and all types of cross-border B2C services with the Member State of consumption as the place of supply. Previously, this was only possible for electronically supplied services and similar types. This approach simplifies VAT compliance for businesses engaged in cross-border B2C transactions within the EU.
The scheme’s main advantages are:
- The possibility of electronic VAT registration in a single Member State (thereby avoiding the requirement to register for VAT in each Member State, where goods or services are sold).
- A single return submitted electronically to the Member State of identification (yet at VAT rates applicable in the consumer’s country).
- Cooperation is needed only with the tax authorities of the Member State of identification (establishment), even in the case of cross-border sales.
Selling in Poland?
Services in Poland
A supply of service (Article 8 of the Polish VAT Act) is considered a transaction that is not a supply of goods and supplies of most types of services are generally taxable under Article 5 of the Polish VAT Act.
The supply of services can be made to a natural person, a legal person or an organization and can include:
- Use of goods part of a taxpayer’s business for purposes other than the taxpayer’s economic activity.
- Food services (restaurants and catering)
- Digital services
- Services about immovable properties
Considered time of Supply.
Place of supply
For Polish VAT purposes, the place of supply rules for services is distinguished between B2B supplies and B2C supplies made to business and end-users respectively.
- In Poland, B2B supplies of services are normally treated as being made where the recipient resides regardless of where the service provider is located.
B2C supplies of services, conversely, are normally treated as being made where the supplier resides. - Articles 28(a) — 28(o) of the VAT Act provide that under certain circumstances, some transactions are indeed subject to taxation at the actual place of consumption under the so-called destination principle.
Digital Services in Poland
Global VAT regulations have undergone significant changes because of the rapid growth of digital services.
The global VAT landscape has been significantly reshaped by the surge in digital services. Under EU law, intangible products and services, also known as e-services or digital goods, include any intangible products or services sold over the internet. These are products that are stored, delivered, and used in an electronic format and encompass a wide range of items, such as:
- E-books, images, movies, and videos, whether bought directly or through third-party services like Netflix, categorized as “Audio, visual, or audio-visual products” for tax purposes.
- Music available for download or streaming, acquired as MP3s or through platforms like SoundCloud or Spotify, typically classified under the audio category.
- Cloud-based software and services, including Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS).
- Websites, web hosting services, and Internet Service Providers (ISPs).
- Internet advertising and affiliate marketing.
In business-to-business (B2B) transactions involving digital services, telecommunications services, or broadcasting services, the place of supply is deemed to be where the recipient is located. Therefore, if both the supplier and customer are not established in Poland, Polish VAT should not be charged on these services. This approach aligns with the broader EU framework for VAT on digital services, emphasizing taxation in the consumer’s location to ensure fairness and reduce tax avoidance in the digital economy.
Last updated: 11/01/2024
Disclaimer
The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at support@gvc.tax
