The dispute over VAT on storage services

The EU Court of Justice will judge where should be taxed comprehensive storage services – VAT on storage services.

The Supreme Administrative Court decided to address the preliminary question in the case concerning the VAT Act. Polish Court of Cassation inquired about place of taxation of storage services. The point is, how to interpret art. 44 and 47 of 112th Directive.

The NSA concerns relate to comprehensive services of the storage of products including many activities i.e. acceptance of goods to the warehouse, placing them on appropriate shelves, storage, issuance, loading and unloading, and in some cases, re-packaging materials supplied in bulk packages to the individual sets. The EU Court of Justice will have to answer whether those are services connected with immovable property, which are taxed at the site of the warehouse. Or it should be assumed that these services are taxed at the place where the recipient of services has established his business (or has its fixed establishment, or fixed residence).

Regarding the issue of the place of VAT taxation of comprehensive storage services, there are disagreements in the jurisprudence of administrative courts of both instances. NSA question concerns a specific case. In the request for an interpretation a Polish company explained that they provide a wide range of logistics services, including acquisition of materials, product quality control, packaging components in the sets, distribution. Within their business activities they provide entities conducting economic activity established in other EU countries and in third countries a comprehensive service of the storage of goods. Contractors do not have a seat nor a fixed establishment on the Polish territory. According to the company their services are not subject to VAT in Poland. A nature of the service does not allow to recognize it as service connected with immovable property.

Tax Authorities emphasized that from January 1st 2010 came into effect a VAT Act amendment with an article 28e. According to that article the place of services connected with immovable property shall be the place where the property is located. Therefore tax authorities ruled that services of storage of goods are inseparably connected with immovable property. The ruling is binding.