Country-specific updates: Poland

VAT Groups in Poland (the so-called Polish Deal)

Effective 1 January 2022 Poland will allow formation of VAT groups.

This option will be available to taxpayers who: (i) are Polish based entities or Polish branches of foreign companies; (ii) conclude a VAT group agreement for min. three years; (iii) are financially, economically, and organizationally connected, ie:

• one of the members of the VAT group owns directly more than 50% of the shares/voting rights/rights to profit in all other members of the group,
• all group members are under common management, and
• business activity of all group members is either of the same nature, or complementary, or one group member acts mostly for the benefit of other group members.

The key simplification for VAT Group is VAT exemption for intra-group supplies of goods and services. Such transactions are also exempt from invoicing.

Also, the VAT group will be deemed a supplier or purchaser in case of any VAT taxable transactions with non-group members, including transactions with a foreign parent company of a Polish branch being group member.

The group will submit one joint VAT return. Group members should record intra-group transactions in separate records. Such records are submitted to the authorities only on their request.