VAT group in Poland

There is currently ongoing consultation on the creation of VAT group in Poland. According to the project, the entities of the group will become a single taxable VAT person. The VAT rights and obligations of the individual members will be automatically transferred to the VAT group.

The VAT group can be created by the entities connected financially, organisationally and economically. The above correlations must exist during the establishment of the VAT group and be continued for the period to which it was established.

In order to set up the VAT group, the members will be obligated to:

– conclude the agreement connected with VAT group,

– indicate the group representative,

– submit the application to register the group with the agreement to tax office appropraite for the representative.

The VAT group creation brings many advantages:

  • Non taxation of the supplies of the goods and provision of the services between the entities belonging to the VAT group,
  • fewer documents for analysis,
  • lack of the analysis of the VAT deductions between the group members,
  • lack of the internal invoices (accounting notes will be enough),
  • exclusion of the SPM (split payment mechanism) for intra group transactions.

On the other hand, the belonging to the VAT group implies the risks, such as:

  • joint and several liability of VAT group members,
  • issue of calculation of proportion in VAT,
  • obligations related to the correct evidence of transactions between the entities in the group.

The VAT group were introduced in many EU countries. This solution is often used by taxpayers. Based on the experience of other countries, the process of implementing a VAT group is a complex process and brings with it both new opportunities and certain risks.

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