When exporting goods outside the European Union, businesses can apply a 0% VAT rate, provided they meet specific legal requirements. However, proving eligibility for this tax benefit is crucial to avoid disputes with tax authorities. Below, we outline the key conditions and the necessary documentation to justify the application of the 0% VAT rate in export transactions.
Legal Basis for the 0% VAT Rate in Export
Understanding the 0% VAT Rate in Export Transactions
Key Insights on the 0% VAT Rate in Export
Exploring the 0% VAT Rate in Export Processes
The application of the 0% VAT rate in export transactions is regulated by EU and national VAT laws. In Poland, the fundamental legal provisions can be found in the VAT Act and implementing regulations. To qualify for this preferential rate, the exporter must demonstrate that the goods have physically left the European Union.
Essential Documentation to Support a 0% VAT Claim
To substantiate the right to apply the 0% VAT rate, the exporter must collect and retain appropriate documentation, which may include:
- Customs Export Declaration (SAD – Single Administrative Document) – This is the primary proof that the goods have been exported outside the EU.
- Electronic Confirmation of Export (IE-599 document) – Issued by the customs authorities, this document serves as final confirmation of export completion.
- Transport Documents – Depending on the mode of transport, these may include:
- Airway bill (AWB) for air shipments
- Bill of lading (B/L) for sea shipments
- CMR consignment note for road transport
- Invoices and Contracts – Clear and detailed invoices specifying the goods exported, buyer details, and export terms.
- Payment Documentation – Bank statements or payment confirmations proving the transaction took place with a non-EU buyer.
- Other Supporting Evidence – If necessary, businesses should provide any additional proof demonstrating the reality of the export transaction, such as correspondence with the buyer, insurance documents, or proof of delivery.
Key Considerations to Avoid VAT Disputes
- Timely Submission of Documentation – The required export evidence must be collected within the statutory deadlines to secure the 0% VAT rate.
- Consistency of Information – All documents should be consistent regarding key details such as quantity, description of goods, and destination.
- Storage of Records – Export documentation must be retained for audit purposes, as tax authorities may request verification.
- Electronic Documentation – As tax authorities increasingly favor digital formats, businesses should ensure proper digital record-keeping.
Common Mistakes Made by Exporters
Many exporters face difficulties in securing the 0% VAT rate due to avoidable errors. The most frequent mistakes include:
- Incomplete Documentation – Missing export declarations, transport documents, or payment proofs can lead to VAT reclassification.
- Delayed Submission – Submitting documents beyond the statutory deadline can result in losing the right to the 0% rate.
- Inconsistent Information – Discrepancies between invoices, contracts, and transport documents can trigger tax audits.
- Relying on Third Parties Without Verification – Exporters should ensure that logistics partners provide all necessary documents on time.
- Failure to Maintain Records – Losing key documents can make it impossible to prove the export and claim the 0% VAT rate.
Consequences of Failing to Prove Export
If an exporter fails to provide sufficient proof of export, the 0% VAT rate may be denied, and the domestic VAT rate will be applied. This can lead to significant financial consequences, including VAT arrears, penalties, and interest charges.
Penalties Imposed by Polish Tax Authorities
If an exporter fails to comply with VAT regulations, tax authorities may impose penalties, which in 2025 include:
- Fine for a tax offense – Ranging from PLN 466.60 to PLN 23,330, imposed through a tax penalty notice.
- Fine for a tax crime – Imposed by a court, calculated in daily rates, where the minimum daily rate is PLN 155.53, and the maximum is PLN 62,212. The total fine can range from PLN 1,555.30 (10 daily rates) to PLN 41,279,040 (720 daily rates).
Interest on Tax Arrears in 2025 in Poland
In cases of tax arrears, taxpayers must pay late payment interest, which in 2025 are set as follows:
- Standard rate: 14.50% per year.
- Reduced rate: 7.25% per year, applicable in specific cases, such as voluntary correction of a tax return and payment of overdue tax within 7 days.
- Increased rate: 21.75% per year, applied in cases where tax understatement is identified by authorities during an audit.
Interest is not charged if the total amount does not exceed PLN 8.70.
Conclusion
Ensuring compliance with VAT regulations and gathering the necessary documentation is crucial for exporters looking to benefit from the 0% VAT rate. By keeping accurate records and submitting the appropriate evidence, businesses can minimize tax risks and maximize profitability in international trade.
For more information and expert guidance on VAT compliance in Poland, contact our team at PolishTax.com.