Value added tax (VAT) in Poland: Rates, reporting and payment rules

Value added tax (VAT, or Podatek od Towarów i Usług) is one of the main indirect taxes in Poland levied on the sale of goods and services. The Polish VAT system is a part of the pan-European tax system, as Poland is a member of the EU, so it is regulated by both national legislation and EU regulations. In this article, we will consider the main VAT rates, reporting rules, requirements for entrepreneurs, and tax payment deadlines.

Basic VAT rates in Poland

VAT rates in Poland differ depending on the type of goods and services. The following rates apply for 2024:

• 23% – standard rate applicable to most goods and services.
• 8% – a reduced rate applicable to certain goods and services, including construction works, medical goods, hotel and restaurant services, and certain types of fuel.
• 5% – the minimum rate applied to basic foodstuffs, medical products, and certain printed publications and books.
• 0% – applies to exports of goods and certain services that are subject to international exemption, such as transportation services within the EU.

Depending on the type of activity and goods, companies can take advantage of different rates, which allows them to reduce the tax burden on the end consumer.

Who is obliged to pay VAT in Poland?

VAT payers in Poland are companies that sell goods or provide services in the country. The law requires VAT registration for all companies whose annual turnover exceeds PLN 200,000. Small businesses whose annual revenue does not reach this threshold do not have to register as VAT payers, but they lose the right to a VAT refund on purchases of goods and services.

The procedure for registering as a VAT payer

In order to become a VAT payer, companies and entrepreneurs must submit an application form VAT-R to the tax authorities. Registration requires detailed information about the business, type of activity and expected turnover. After registration, the company receives the status of a VAT payer and can use its VAT number (NIP) to conduct transactions in the EU.

VAT reporting

VAT reporting in Poland is mandatory for all registered taxpayers. Businesses have to submit reports on a monthly or quarterly basis, depending on the scope of their activities and the chosen regime. The main VAT report is VAT-7 (monthly) or VAT-7K (quarterly).

JPK_VAT system

In Poland, VAT reporting is done through the electronic system JPK_VAT (Jednolity Plik Kontrolny for VAT), which is mandatory for all businesses. JPK_VAT is a standardized XML file containing detailed information on all VAT transactions that a company has made during the reporting period. The system allows the tax service to automatically check the accuracy of calculations and quickly identify possible violations.

Deadlines for submitting reports

The deadline for submitting VAT reports is the 25th day of each month for monthly reporting and the 25th day of the month following the reporting quarter for quarterly reporting. If the 25th falls on a weekend or holiday, the deadline for submitting the report is extended to the next business day.

VAT payment rules

VAT is payable in the same currency as the reporting (usually in PLN). Payment must also be made by the 25th day of the month following the reporting period. The amount of VAT payable is calculated as the difference between:

• The amount of VAT received from sales (output VAT).
• The amount of VAT paid on purchases (input VAT).

If the amount of sales tax exceeds the amount of purchase tax, the company pays the difference. If the amount of input VAT exceeds the amount of output VAT, the company can claim a refund of the excess or keep it for offsetting in future periods.

VAT refunds

If the calculation shows that the amount of VAT on purchases exceeds the amount of VAT on sales, the taxpayer may apply for a refund. In Poland, there are the following time limits for VAT refunds:

• 60 days – standard refund period.
• 25 days – an accelerated refund period, provided that all documents fully comply with the requirements of the tax office.

Refunds can also be credited to subsequent reporting periods, reducing the amount of future VAT payments.

VAT benefits and exemptions

Some activities and transactions are exempt from VAT in Poland. For example:

• Educational and medical services provided by licensed institutions.
• Financial services such as insurance or investment management.
• Exports of goods and certain international services for which a 0% rate applies.

There are also benefits for businesses in special economic zones, where companies can take advantage of tax holidays or preferential rates.

Liability for late payment of VAT

In case of late payment of VAT or submission of incorrect reports, the tax authorities have the right to impose fines and penalties on the company. The penalty rate depends on the period of delay and can be significant, especially for large companies. Therefore, it is important to submit reports on time and ensure compliance with all reporting rules.

Electronic services for VAT payers

Poland actively uses electronic services to simplify the VAT payment and reporting process. The e-Urząd Skarbowy service allows taxpayers to submit reports, view the status of declarations, receive VAT refunds and monitor tax payments. This service is especially useful for businesses that carry out a large number of transactions.

VAT is a key element of the Polish tax system

The value added tax in Poland is a key element of the tax system, which is regulated by both national and European legislation. Knowing the basic rates, reporting requirements, payment rules, and VAT refund procedures helps businesses avoid misunderstandings and fines. Thanks to electronic reporting and automation of tax processes, the VAT system in Poland has become transparent and convenient for taxpayers, including small and medium-sized businesses.