VAT Guide for Freelancers in Poland

Poland follows the "destination principle" of the European Union's VAT directives, which means that VAT is payable to the country's government where the product or services are consumed, regardless of where you're supplying them from. The VAT is charged to the final consumers of the goods.

The standard VAT rate in Poland is 23%, with reduced VAT rates levied based on the type of products you supply. The registration threshold is set at PLN 200,000, so if your annual turnover exceeds this amount, you must register for VAT. The National Revenue Administration is accountable for the VAT system in Poland. You can check their website for VAT information and updates. 

Trying to understand Poland's VAT system all by yourself can be taxing. So, we created this guide with everything you need to know about the VAT system in Poland. Let's get started!

What are the different VAT rates in Poland?

The Polish government levies four different VAT rates, and you must charge the amount that applies to your products and services.

  • The Standard Rate of 23% - Applied to all goods and services, unless they fall under the reduced rate or zero-rate categories.
  • The Reduced Rate of 8% - Applied on some foodstuffs, medical products, restaurant and hotel services, supplies covered by social housing policy, etc
  • The Reduced Rate of 5% - Applied on some foodstuffs like bread, dairy products and meats, certain kinds of printed books, etc.
  • Zero Rate (0%) - supplies of certain aircraft and vessels, air and sea transport services, intra-community and international transport, import and export of goods, etc., are subject to a zero VAT rate. You should still record zero-rate transactions and create reports based on your returns.

To read more about the different VAT rates in Poland, click here.

When should you register for VAT in Poland?

Self-employed individuals conducting taxable economic activities in Poland are liable to register for VAT when their annual turnover reaches or exceeds PLN 200,000. In contrast, there is no registration threshold if you are an expat freelancer operating in Poland, so you must register for VAT before commencing your taxable economic activities. If you sell goods digitally from another country to Polish consumers, the distance sales VAT registration threshold is PLN 160,000 per annum.

You can also click here for more information on when you must register for VAT in Poland. 

How to register for VAT in Poland

Freelancers In Poland must pay VAT on their income. You first need a tax identification number (NIP) to register for VAT, which can be obtained by submitting an application. Once you have your NIP, you must submit an application for VAT registration to the Polish Revenue Office on a VAT-R form. You can submit this:

  1. In-person at the revenue office,
  2. By post, or
  3. By electronic means.

While the VAT registration itself is free, you need to pay PLN 170 if you wish to receive registration confirmation.

Your VAT registration form must include the following information and supporting documents:

  1. Tax identification number
  2. The location of your business and an original copy of the agreement letter from the Polish bank where the business' account is held
  3. Articles of Association
  4. Description of activities to be carried out in Poland
  5. If you are registered for VAT anywhere else in the EU, a VAT certificate is needed as proof
  6. A power of attorney for the fiscal representative (If you are from a non-EU country sending a fiscal representative on your behalf)

The effective registration date is the day you submit the form; you are liable to report and pay VAT starting from this day.

Freelancers based outside the EU are required to appoint a tax representative for all tax and VAT related affairs. After registration, you must pay VAT to the Polish Revenue office annually.

Freelancers who conduct business in multiple EU countries have access to an easier method of registration for VAT. The Mini One-Stop Shop (MOSS) is an online portal that allows you to simplify your VAT payments by consolidating all your transactions across several EU countries in one place. You can submit all your VAT returns here without having to register in every country individually.

Alternatively, you can hire an accountant (or agency) to handle your VAT returns and dealings with the Polish Fiscal Department. Xolo provides services like Xolo Go and Xolo Leap, which help with precisely this and any other VAT concerns you may have.

Reporting VAT for Freelancers

If your annual turnover is less than EUR 1,200,000, you can file VAT returns every quarter. Otherwise, you must file VAT returns monthly. 

Financial Obligations of VAT Registered Freelancers in Poland

After registering for VAT, you must:

  1. Charge the correct VAT rate from anyone you provide your services to. 
  2. File VAT returns and pay the correct VAT amount owed to the Polish Revenue office every year. 
  3. Maintain detailed VAT records and a VAT account.
  4. Keep records of all your purchase and sales activity and financial transactions.
  5. Ensure that all your VAT invoices include: 
    1. yours and your client’s VAT identification number
    2. sequential invoice number
    3. customer’s data
    4. clear description of the goods or services exchanged
    5. exact amount subjected to VAT
    6. the appropriate VAT rate charged for that amount, and 
    7. the total amount with VAT included
  6. Keep self-billing invoices for purchases from non-resident entities.

These financial records need to be maintained in a clear, complete and legible format for at least ten years, especially if you use the VAT MOSS service. They can be stored electronically or in their physical form. The specific financial records you should maintain are:

  • Printed copies of the invoices you send out,
  • Received invoices
  • Agreements on self-billing
  • The self-billing vendors' names, addresses, and VAT numbers
  • Notes (debit/credit)
  • Records of imports and exports
  • Records of bank statements, check stubs, cash books, till rolls, and paying-in slips in addition to your VAT account

Feeling overwhelmed? Xolo’s got your back! We future-proof your records by automatically generating, sending, and storing all your invoices for you, so you won’t have to worry about missing any steps or misplacing any documents ;)

How Xolo Can Help?

Learning all the Polish tax guidelines can be challenging, especially if you’re a sole proprietor and in charge of several aspects of your business. Luckily, at Xolo, we offer a range of solutions that can handle all the paperwork and legal jargon, allowing you to focus on your core competencies.

Xolo Go is a quick and efficient way for freelancers who may or may not have a registered LLC or sole proprietorship to invoice clients legally. 

  • Signing up takes only 10 minutes, and once you do, taxation, corporate compliance, and all the tricky VAT calculations are all automatically taken care of in the background!
  • We charge a flat rate of 5% from every withdrawal to your personal bank account. No surprise fees, no contracts, and no BS.

 

Xolo Leap is the easiest and most effective way to create your own company through Estonian e-Residency! Reduce time spent on mundane business administration and focus on what you do best!

  • We offer different tiers of service depending on the solopreneur's (or as we call them, Xolopreneur's) individual needs.
  • Once you get your business set up with Xolo Leap, you can run it from anywhere in the world! So whether you’re a freelancer looking to gain access to the EU market or a digital nomad who can’t be tied down - this is the place for you! 

 

Simply put, we do the hefty work for you so that you can enjoy the freedom of freelancing. So connect with us immediately, and we’ll help you get your one-person business up and running in Poland in no time!