Entrepreneurs from the United Kingdom of Great Britain and Northern Ireland and the Kingdom of Norway who settle VAT in Poland are not required to appoint a tax representative despite Brexit. Poland has joined the group of member states that make it easier for taxpayers from certain third countries to settle tax on goods and services in Poland. The new regulations will come into force retroactively from 1 January 2021.
Relief for taxpayers from Great Britain and Northern Ireland and Norway
A regulation of the Minister of Finance, Funds and Regional Policy has been published on 25th February 2021. This regulation exempts from the obligation to appoint a tax representative if the taxpayer has a registered office or permanent establishment in the United Kingdom of Great Britain and Northern Ireland and the Kingdom of Norway. Administrative cooperation, anti-fraud and VAT recovery agreements have been concluded with these countries. Importantly, the Regulation applies retrospectively from 1 January 2021, the date on which the United Kingdom ceased to be a member of the European Union.
General rules for establishing a tax representative
Under the current provisions of the VAT Act, active VAT payers without a registered office or permanent establishment in the European Union must appoint a tax representative to facilitate the fulfilment of their obligations under the VAT Act in Poland. His duties include:
- tax accounting;
- preparation of tax returns
- preparation of recapitulative statements;
- maintaining and preserving documentation and records for tax purposes.
Conditions for the appointment of a tax representative
The VAT Act provides that a tax representative may be a natural person, a legal entity or an organisational unit without legal personality if it meets all the following conditions:
- the seat of business activity on the territory of Poland;
- registration as a VAT taxpayer in Poland;
- no arrears in the payment of taxes representing the income of the state budget for 24 months preceding the establishment of its tax representative;
- in the case of a natural person – no final conviction for the commission of a tax offence;
- authorisation to provide tax advisory services or to keep books of account.
A tax representative is established by a written agreement, which must include:
- details of the parties;
- address of retention and storage of documentation for tax purposes;
- a declaration by the appointed person that he or she meets the legal requirements to act as a tax representative;
- the scope of the representative’s duties.
The scope of duties of a tax representative must be precisely defined, as the representative is jointly liable with the taxpayer for the taxpayer’s tax obligations.
Relief for taxpayers from third countries
The regulation of the Minister of Finance, Funds and Regional Policy represents a significant simplification for taxpayers from the United Kingdom of Great Britain and Northern Ireland and from the Kingdom of Norway. Thanks to it, taxpayers from the United Kingdom will not be affected by Brexit and taxpayers from Norway will no longer have to appoint a tax representative as they do now. The Treasury wants to ensure the greatest possible freedom of action for its closest trading partners.
We encourage you to contact our experts if you have any doubts or need to sign a tax representative appointment agreement.
Aleksandra Philips, LL.B., VAT Specialist