Poland joins 18 other EU member states with VAT group simplification option
Poland has now introduced the option for related taxpayers to join under a single VAT number for reporting and exempt intra-group invoicing – ‘VAT group’. Thisis based on Article 11 of the EU VAT Directive 2006/112/EC. This simplification and cashflow saving option was originally planned for 1 July 2022.
The terms include intra-group reporting to Polish SAF-T JPK requirements and increased the details of intra-group transactions that must be captured.
The new rules include the option for a single VAT return for related companies, a ‘VAT group, based on EU VAT Directive rules. Read more in our Polish VAT guide.
Related VAT registered resident business are able to consolidate their reporting into a single return and share the same VAT number. This means intra-group transactions would be made without VAT. Intra-group VAT transactions would be zero-rated, thus avoiding cash flow requirements.
Polish VAT Group features
The VAT Group, Podatkowa Grupa Kapitałowa, PGK, will be similar to those in other EU countries:
- VAT groups will be a voluntary option between related businesses;
- businesses within the group will become jointly and severally liable to each others’ VAT
- intra-community transactions will be effectively zero-rated;
- losing the status of a PGK group will have an impact on the status of the VAT group, which in consequence will cease to exist; and
Related VAT registered resident business will be able to consolidate their reporting into a single return and share the same VAT number. This means intra-group transactions would be made without VAT. Intra-group VAT transactions would be zero-rated, thus avoiding cash flow requirements.
Requirements to join a VAT Group
To join, members of a VAT group must be financially and/or organisationally linked. Financial links include:
- holds directly more than 50% of the share capital in;
- holds more than 50% of the voting rights in; or
- holds more than a 50% participation in the profits of
Organisational links include:
- they either legally or actually, directly or indirectly, function under the joint management; or
- their activities are organized, wholly or partly, in agreement with one another (article 15a(5) of the VAT Law).
Single VAT return via SAF-T
For Poland, which replaced the VAT return with JPK_VAT (SAF-T) reporting, this would mean a consolidated submission of the filing each month.
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EU VAT Group rules
Poland has to introduced the scheme under the rules of the EU VAT Directive Article 11 of Directive 2006/112/EC. This stipulates that group members must be closely linked financially, economically and organisationally to be treated as one taxable person. Typically, this means at least 75% share control of companies within the group, shared management or shared business goals or activities. This can include a member of the group providing goods or services that are mostly / wholly consumed by other members of the group.
Poland will be expecting one nominated member of the group to take on responsibility for the consolidated return.