On the 11th of October 2022 the Supreme Administrative Court (NSA) has issued a ruling with signature I FSK 396/21 on the determination of a fixed establishment for VAT purposes.
The essence of the dispute with the Polish tax authorities
In the facts in question, a German company was selling clothes and footwear online. It shipped products from warehouses located in Europe, including Poland.
The company emphasised that it is an active VAT payer in Poland, but it is not the owner of the indicated warehouses. The company also indicated that it does not employ any staff in Poland. However, it uses the services of several group companies, which – in the indicated warehouses – provided logistic services to it and handled the return of goods.
The company applied to the Polish tax authorities for confirmation that the purchased services were not subject to VAT in Poland. However, the tax authorities considered that the company, with its management in Berlin, also had a fixed establishment in Poland.
Treasury’s opinion challenged
The opinion of the Treasury was not shared by either the Voivodship Administrative Court (WSA) in Gliwice or the Supreme Administrative Court (NSA), which indicated in its judgment that in order to assess the existence of a fixed establishment in the context of personnel or technical facilities, it should be taken into account whether the taxpayer has the right to dispose of them in the same way as it could if it were their owner, which was not the case in the discussed matter.
Fixed establishment from a VAT point of view
The issue of the existence of a fixed establishment in Poland has a significant impact on the taxation of the business conducted.
In order to properly tax transactions in Poland, it is necessary to examine all aspects of the taxpayer’s business.
Should you have any questions regarding the examination of whether you may have a fixed establishment in Poland, please do not hesitate to contact the tax department of our law firm.
Aleksandra Philips, LL.B. VAT-specialist
Maciej Gryka, Junior tax consultant