Fixed establishment for VAT purposes in Poland

Polish VAT regulations do not define a fixed establishment (FE), but only indicate that the place of supply of services in the case of services provided to a taxpayer is the place where the taxpayer who is the recipient of the service has his business seat. However, if the services are provided for the taxpayer’s fixed establishment, which is located in a place other than the registered office of its business, the place of supply of these services is this fixed establishment.

In accordance with Art. 11 of Implementing Regulation No. 282/2011 for the purposes of applying Art. 44 of the VAT Directive, a fixed establishment means any place, other than the taxpayer’s place of establishment, which is characterized by sufficient permanence and an appropriate structure in terms of human and technical resources to enable him to receive and use the services supplied for his own needs of that permanent establishment.

According to the Polish tax authorities a fixed establishment may be described in the following way:

  • the permanent place of business must be characterized by a certain degree of involvement which allows it to be considered that the activity is not carried out there on a transient or periodic basis;
  • technical infrastructure and personal involvement must be closely related to the performance of taxable activities; In order for a place of business to be considered permanent, it must not only use goods and services there, but also carry out taxable activities;
  • if a given entity has staff and structure in a given country, including technical infrastructure characterized by appropriate stability, it also has a permanent place of business there; however, it does not matter whether these are employees employed directly by this entity or whether it is its “own” infrastructure

On June 29, 2023, the Court of Justice of the European Union (CJEU) issued a judgment in the Belgian case of Cabot Plastics Belgium SA (C‑232/22). The Court referred to the judgment in the Berlin Chemie A. Menarini case (C-333/20) and held that only if it is established that a company disposes of the resources of the service provider as if they were its own, it can be considered to have FE in a given country.

The Tribunal emphasized that in order to determine the place of supply of services, it is not important where the goods sold are located, but where the technical and human resources used by the company to produce the goods are located.

The issue of a fixed establishment (FE) is still quite difficult and complex therefore each situation requires detailed analysis and in some cases a request for official ruling to the tax administration.

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