Michaela Merz

Poland – Abolition of the reverse charge system as from 1 April 2013

2 Comments

Two years ago Poland introduced the reverse charge system for local supplies of goods by non-established entities. As a consequence foreign companies without permanent establishment in Poland are not allowed to charge VAT on their local supplies. This caused some cash flow difficulties as many of these companies are always in recovery position. 

As from 1 April 2013 this system will be abolished and non-established companies will again have to charge local VAT on domestic supplies (some minor exceptions where the reverse charge will be applicable will remain).

2 thoughts on “Poland – Abolition of the reverse charge system as from 1 April 2013

  1. Dear Ms Merz,
    Irland registered company sell the goods to Poland sending them directly from their main european warehouse located in Belgium, to Poland. They draw invoices for polish distributors with irish VAT. They have also the office registered in Poland with polish VAT but, the invoices are from Ireland. They started to add a VAT Tax on these invoice.
    In my opinion, this is not correct because, we are not a domestic market for this company registered in Ireland..?

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  2. Dear Mr Sajdak,

    Thank you for your comment!

    I take the assumption that a) the Polish distributors are established in Poland, b) are registered for Polish VAT, c) they have a contract with the Irish established company for cross-border supply of goods within the EU and d) they provided their Polish VAT registration number to the Irish supplier. If this is the case, it indeed does not seem to be correct that the Irish company applies Irish VAT to its supplies.

    Rather, the Polish distributors should self-account for Polish VAT in relation to the acquisition of the goods in their periodical Polish VAT returns, based on the invoice received from the Irish company’s Irish (or even Belgian) VAT registration number.

    On the face of it, it does not seem to have anything to do with the abolition of the Polish reverse-charge rules from 1 April, since it would appear to be an intra-Community transaction as opposed to a local sale.

    Of course, this is only my high-level comment based on limited information. I would be pleased to provide you with a more detailed analysis, however I would then need to know the exact facts and circumstances of the transactions.

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