In accordance with the ruling of the Supreme Administrative Court (NSA) of 15 November 2022 (ref. I FSK 95/19), the indication of the date on which taxable activities commenced in the past does not make the obligation to register for VAT purposes in Poland retroactive and does not give rise to an obligation to correct settlements in connection with transactions settled in accordance with the reverse charge mechanism (reverse charge).
The essence of the matter
The case concerned a German company registered for VAT purposes in Germany, which provided assembly supervision services to its Polish branch in 2015-2016. For the services provided, the company issued invoices using the reverse chargé mechanism.
Due to new circumstances coming to light, which the company was not aware of at the time of the earlier transactions, it became apparent that the company was obliged to register for VAT in Poland during the period when it provided services to the Polish branch.
However, the registration obligation concerned a separate project unrelated to the provision of assembly supervision services. The company filed a registration declaration in 2017 on a VAT-R form, indicating that it had performed its first taxable activity in 2015.
Request for an individual interpretation by the Director of National Fiscal Information
Due to the company’s doubts regarding a possible obligation to adjust its settlements with the payment of interest, the company addressed this issue in a request for an individual tax law interpretation to the Director of the National Fiscal Information.
In the interpretation issued, the Director of the National Fiscal Information held that the company had to correct its settlements as it did not meet the prerequisites for the application of the reverse charge under the Act.
Complaint to Voivodship Administrative Court, position of Supreme Administrative Court
The company disagreed with the interpretation issued and filed a complaint with the Voivodship Administrative Court (WSA). The court dismissed the complaint against the individual interpretation submitted by the company.
It was not until the Supreme Administrative Court (NSA) that a different position was presented. According to the justification to the ruling, if the company, at the time of taxation, fulfilled the conditions for a reverse charge and the buyer became obliged to settle VAT, this frees the supplier and service provider from the obligation to settle the tax. The court emphasised that registering the seller after the transaction has already been settled, even with a retroactive date covering the date on which the tax obligation for that transaction arose, does not shift the burden of the obligation back to the supplier.
Conclusions for VAT payers
This ruling of the NSA is definitely positive for taxpayers and should influence the line of rulings of administrative courts and individual interpretations issued.
Should you have any questions regarding your obligation to register for VAT purposes in Poland, we are at your disposal.
Aleksandra Philips, LL.M., VAT-specialist
Maciej Gryka, Junior tax consultant