The VAT-21 form
and the taxation of distance selling
from Poland
When conducting business based on distance selling you should keep in mind the available methods of VAT settlement. If all requirements are met, the seller may choose the country of taxation.
Why is it worth doing? Choosing the right country of taxation may help you save money. As currently the VAT rate in Poland is one of the highest in the EU, choosing a different country of taxation may result in paying lower tax rates.
Distance selling from Poland and the selling thresholds
Distance selling, to put it simply, is the sale of goods from their country of origin by a VAT payer to a consumer located in another intra-Community country.
However, not all goods are regulated by the rules of distance selling. In accordance with the VAT Act, such goods include:
new means of transport
goods which must be installed or assembled, with or without a test run, by the vendor or an entity acting on their behalf
second-hand goods, art, collector’s items and antiques
The country of taxation for goods not mentioned above is determined on the basis of distance selling thresholds specified by each country of the EU individually. You can read about distance selling thresholds here.
If the annual distance selling thresholds for goods shipped from Poland to other countries of the EU have not been exceeded, the country of taxation is Poland, i.e. the country of shipment. The seller may choose the place of destination as the country of taxation, regardless of the turnover obtained from the delivery of goods to that country. However, the decision must be made before the distance selling thresholds are exceeded.
Note that the new place of taxation must be the country where the goods are being delivered – it cannot be any country of the EU.
The VAT-21 form and other formalities
Note that the head of tax office in Poland must be informed about choosing another country of taxation for distance selling. This can be done in two ways: in person or online. The head of tax office is notified via a VAT-21 form, free of charge. The choice of a new country of taxation is valid for two years from the finalisation of the first delivery of goods made after the change.
If you provide the notice online, you will receive an official confirmation of receipt (UPO) which must be appended to the VAT-21 form, and then sent to the tax office in the country of registration. On the other hand, if you provide the notice in person, you will receive an official stamp on the VAT-21 form. The certified document must then be submitted to the appropriate tax authorities in the selected country of taxation.
The notice must be submitted no later than 30 days before the finalisation of the first delivery which is to be settled in the new place of taxation. .
The formalities do not end there. The tax payer has to submit to the Polish tax office a document confirming they notified the appropriate tax authorities in the new country of taxation about the changes made. This document must be submitted no later than 30 days from the first delivery completed after the change had been made.
The deliveries must also be properly documented – such documentation is the basis for an exemption from the Polish VAT. If the appropriate documentation of goods exported from Poland is not provided, the seller may be subject to VAT in both countries.
Our support
If you are already one of our clients, all you need to do is provide us with the confirmation of receipt (UPO) or a paper document certified with an official stamp, and we will take care of all other formalities connected with VAT registration of your company. If you are not working with us and are looking for support, do not hesitate to contact one of our VAT experts. We provide support with VAT registration abroad, as well as with any other tax processes.