Poland VAT & Tax Briefing: Key Updates and Developments (July – August 2025)
This briefing summarizes the main themes, key ideas, and important facts regarding recent VAT and tax developments in Poland, drawing from various sources published between July and August 2025.
I. National e-Invoicing System (KSeF) Implementation and Updates
Poland is undergoing a significant digital transformation with the phased implementation of its mandatory National e-Invoicing System (KSeF). This system aims to centralize e-invoicing, enhance compliance, and improve financial liquidity for businesses.
- Phased Rollout Schedule:
- February 1, 2026: Mandatory for large taxpayers (companies with annual sales over PLN 200 million or monthly revenue exceeding PLN 200 million).
- April 1, 2026: Extends to all other entrepreneurs, including VAT-exempt entities.
- January 1, 2027: Deferred implementation for small businesses with monthly invoices not exceeding PLN 10,000 gross.
- All taxpayers must be able to receive e-invoices via KSeF from February 2026.
- “Act introducing the KSeF – Senate amendments – VATupdate”, “Poland Introduces National e-Invoicing System, Mandates Compliance for Large and Small Businesses by 2026”, “Poland to Implement Mandatory Electronic Invoicing for Businesses by 2026”, “Poland’s Mandatory B2B E-Invoicing: Key Updates and Deadlines for 2025-2026 Implementation”, “Poland’s Senate Approves KSeF Implementation and Tax Code Amendments, Awaits Final Sejm Approval”, “Polish Parliament Approves KSeF 2.0 Act, Awaiting Presidential Signature for Implementation”, “Polish Parliament Finalizes e-Invoice System Law, Raises Concerns Among Tax Advisors”, “eInvoicing in Poland – VATupdate”
- Key Features and Technical Aspects of KSeF:
- Centralized Platform: KSeF will be the primary platform for processing e-invoices, integrating with the existing Platforma Elektronicznego Fakturowania (PEF) for B2G transactions.
- Structured Invoices: KSeF relies on structured XML invoices (FA3 schema), which are virtual entities stored in the system after authorization. Paper versions are not considered valid VAT invoices for tax deduction purposes.
- Authentication: Various options for authentication include electronic identification (ePUAP for individuals, qualified electronic signatures/seals for businesses), and alphanumeric tokens as a transitional solution. Registration of foreign certificates via ZAW-FA form is possible.
- Offline Mode & QR Codes: KSeF 2.0 includes an “offline24 mode” for e-invoice submission by the next business day during system failures, and the use of QR codes.
- Attachments: New regulations for structured invoice attachments will take effect on January 1, 2026, requiring registration and approval from the Head of the National Tax Administration.
- Archiving: KSeF will provide 10-year archiving of invoices.
- “Authentication in KSeF 2026: Tokens, Certificates, and Electronic Signatures Revolutionize Polish Business – VATupdate”, “July 2025 VAT Updates: Key Legal Changes and Events in Tax Regulations – VATupdate”, “Poland’s MoF Releases Technical Documentation for KSeF Implementation and VAT Schema Changes – VATupdate”, “Polish Parliament Approves KSeF 2.0 Act, Awaiting Presidential Signature for Implementation”, “Structured Invoice Attachments in KSeF: New Regulations and Implementation from January 2026”, “What is a Structured Invoice? Is Its Paper Version Recognized as a VAT Invoice? – VATupdate”, “eInvoicing in Poland – VATupdate”
- Transitional Provisions & Penalties:
- A transitional period until the end of 2026 will allow businesses to use cash registers for invoicing and postpone penalties for invoicing errors, providing a buffer for compliance.
- “Act introducing the KSeF – Senate amendments – VATupdate”, “Poland Introduces National e-Invoicing System, Mandates Compliance for Large and Small Businesses by 2026”
- Despite extensive consultations, some aspects, particularly the definition of the invoice issuance date, remain unclear. Taxpayers are advised to send invoices to KSeF on the same day they are created to avoid confusion.
- “Polish Parliament Finalizes e-Invoice System Law, Raises Concerns Among Tax Advisors”
- KSeF Criticisms and Concerns:
- The Supreme Audit Office (NIK) has warned of “ongoing issues with the National e-Invoicing System (KSeF), including repeated delays in mandatory e-invoicing implementation.”
- “VAT and excise duty: NIK warns – KSeF is delayed, audits are losing their effectivenes – VATupdate”
II. VAT Rates, Refunds, and Compliance
Poland’s VAT system, known as “Podatek od towarow i uslug,” features a standard rate of 23%, with reduced rates of 8% and 5% for specific goods and services, and exemptions for certain activities and exports.
- VAT Refund Efficiency: The Senate has emphasized a reduction in the basic VAT refund period from 60 days to 40 days to improve financial liquidity for businesses.
- “Act introducing the KSeF – Senate amendments – VATupdate”, “Poland’s MoF Releases Technical Documentation for KSeF Implementation and VAT Schema Changes – VATupdate”
- VAT Registration Threshold Increase: Effective January 1, 2026, Poland will raise its annual VAT registration threshold from PLN 200,000 to PLN 240,000 (approximately €56,000) to align with EU VAT Directive revisions for small enterprises. Non-resident companies must register from their first taxable transaction.
- “Poland Raises VAT Registration Threshold to PLN 240,000 – Key Information for Businesses – VATupdate”
- VDEK Reporting (JPK_V7): Poland combined VAT returns and SAF-T reporting into the JPK_V7 (VDEK) in 2022, requiring monthly or quarterly electronic submissions of detailed VAT data.
- “From pierogi to Paperwork: A guide to Polish VAT and VDEK Compliance – VATupdate”
- Cash Registers: From July 1, 2025, certain goods (electronic cigarettes, high-alcohol products not for human consumption, coal products for heating) require cash registers regardless of turnover.
- “Polish Businesses Must Use Cash Registers for Specific Goods from July 2025 – VATupdate”
III. Significant Court Rulings and Tax Interpretations
Recent court decisions and tax authority revisions highlight evolving interpretations and applications of VAT law in Poland, often aligning with EU principles.
- Spouses as a Single VAT Taxpayer: Recent EU and Polish court rulings suggest that spouses can be treated as a single VAT taxpayer in certain situations, particularly concerning joint property sales. This marks a “breakthrough in VAT” and signals a potential “new era in Polish tax law,” though urgent legal changes to NIP and VAT regulations are necessary to implement this.
- “Breakthrough in VAT: Spouses Can Be a Single Taxpayer, Legal Change Needed – VATupdate”, “Marital VAT: Legal Challenges in Recognizing Spouses as a Single Taxpayer – VATupdate”, “Married Couples as Single VAT Taxpayers: A New Era in Polish Tax Law – VATupdate”
- VAT Deduction on Auxiliary Transactions: The Regional Administrative Court in Gdańsk ruled that auxiliary transactions, such as the sale of a property acquired as an investment (not for business purposes), do not affect the VAT deduction proportion. This ensures these transactions do not distort the turnover and core activities of an entity.
- “Auxiliary Transactions Do Not Affect VAT Deduction Proportion, Court Rules – VATupdate”
- VAT Deduction on Public Infrastructure:A city can partially deduct VAT on expenses for accompanying infrastructure (e.g., driveways, sidewalks) when these are part of a main investment project also used for business activities, as ruled by the Supreme Administrative Court.
- Conversely, a city cannot deduct VAT for constructing public roads and infrastructure in an economic activity zone if it does not act as a VAT taxpayer, as public infrastructure is generally not subject to VAT. An exception applies if expenses are used for taxable activities (e.g., water and sewage network costs transferred to a municipal company).
- “City Can Partially Deduct VAT on Infrastructure Expenses, Court Rules – VATupdate”, “City Cannot Deduct VAT for Road Construction in Economic Zone, Court Rules – VATupdate”
- Early Invoices with Delayed Payment: The Polish Tax Authority has revised its position, now allowing “early invoices with payment after the legal deadline to be taxed under general rules.” This means such invoices can be corrected, aligning with EU VAT principles prioritizing the substance of the transaction. Recipients can deduct tax once the obligation arises.
- “Polish Tax Authority Revises Position on Early Invoices – VATupdate”, “Tax Authority Allows General Tax Rules for Early Issued Invoices with Delayed Payment – VATupdate”
- VAT on Car Sales from Leasing: Selling a car purchased from an operating lease requires paying VAT if the input tax was initially deducted. Exemption applies only if the car was used exclusively for tax-exempt activities where no input tax deduction was possible.
- “VAT Obligations on Selling a Car Purchased from Leasing: Key Considerations for Taxpayers – VATupdate”
- VAT on Contribution in Share Acquisition Costs: The Supreme Administrative Court ruled that VAT paid on a contribution (e.g., real estate) can be included as an expense for acquiring shares, allowing it to reduce income from a partner leaving a company.
- “VAT on Contribution Considered in Share Acquisition Costs, Court Rules – VATupdate”
- VAT Penalties and Fraud Investigation: Tax authorities must investigate if fraud occurred before imposing VAT sanctions, especially post-COVID-19. VAT sanctions are not for mistakes but to prevent abuse.
- “Tax Authority Must Investigate Fraud Before Imposing VAT Penalties, Especially Post-COVID-19 – VATupdate”
- Individual VAT Coefficients: The Supreme Administrative Court allowed a foundation to use different coefficients for VAT deduction based on the type of expenses and their relation to economic activities, overturning an earlier ruling.
- “Ruling on Individual VAT Coefficients: Implications Beyond Local Government Units – VATupdate”
- VAT Exemption for Non-Commercial Shipments: The Polish Supreme Administrative Court confirmed VAT exemption for import of non-commercial shipments even if the recipient is in another EU country, implementing a recent EU Court of Justice decision.
- “Court Confirms VAT Exemption for Non-Commercial Shipments to Other EU Countries – VATupdate”
- VAT Exemption for Public Authority Activities:Providing geological information for a fee by a province is exempt from VAT, as the province acts as a public authority under Geological and Mining Law, not a business.
- Municipal waste management by neighboring municipalities is also exempt, as it’s considered a public authority task, not a business activity.
- “Geological Information Provision Exempt from VAT, Ruled as Public Authority Activity – VATupdate”, “Municipal Waste Management by Neighboring Municipalities Exempt from VAT, Court Rules – VATupdate”
- Compensation for Demolition: Compensation for the necessary demolition of a building due to road investment is not subject to VAT, as it’s ruled not a payment for a service.
- “Compensation for Demolition Not Subject to VAT, Rules Supreme Administrative Court – VATupdate”
- Composite Supplies: The Supreme Administrative Court upheld a ruling that inappropriately applied reduced VAT rates to bundled services (alcoholic beverages and erotic dance services), classifying them as composite supplies subject to higher tax rates due to attempts to artificially separate them for tax advantages.
- “Are alcoholic beverages and erotic dance services composite supplies? – VATupdate”
- Private Apartment Rental Income: Income from private apartment rental, if regular and for profit, must be included in the VAT limit for exemption (PLN 200,000), even if not formally linked to a business.
- “When to Include Private Apartment Rental Income in the VAT Limit? – VATupdate”
IV. Other Key Tax Developments
Beyond VAT, Poland is seeing legislative activity and policy discussions in other tax areas.
- Digital Services Tax (DST): Poland is considering a 3% digital services tax targeting large multinational tech companies with global revenues exceeding €750 million. The tax aims to support Polish technology, innovation, and media content, ensuring fair contributions from international corporations.
- “Poland Proposes 3% Digital Services Tax Targeting Multinational Tech Giants – VATupdate”, “Poland Proposes 3% Digital Tax on Global Tech Companies – VATupdate”, “Poland Proposes Digital Services Tax on Major Tech Firms with Global Revenues Over EUR 750 Million – VATupdate”, “Poland to Implement New Tax on Digital Services – VATupdate”
- VAT Deduction on Cars for Mixed Use: The EU has approved a three-year extension until the end of 2028 for Poland’s 50% VAT deduction rule on cars used for both business and private purposes. Full deduction is only possible if the car is used exclusively for business.
- “EU Approves 50% VAT Deduction on Cars for Mixed Use Until 2028 – VATupdate”, “Poland Seeks Three-Year Extension for 50% VAT Deduction on Vehicle-Related Costs – VATupdate”
- New VAT Import Settlement Rules: A draft amendment to the VAT Act (Article 33a) on July 18, 2025, proposes extending the declaration correction period for authorized traders with simplified procedure permits, allowing corrections later than four months after the tax obligation arises, linked to the new AIS/IMPORT PLUS customs system.
- “New VAT Import Settlement Rules: Extended Declaration Correction Period for Authorized Traders – VATupdate”
- Deposit System for Beverage Containers: A new deposit system for beverage containers will be implemented from October 1, 2025. Deposits collected under this system will generally not be subject to VAT at any sales stage, and refunds will be VAT-exempt. However, deposits not included in the new system (e.g., private schemes) will follow existing VAT regulations.
- “Deposit system – which deposits without VAT in the new way and which with VAT in the old way? – VATupdate”, “Poland’s New VAT Guidelines for Deposit System: Key Changes and Business Implications – VATupdate”
- EU and OECD Tax Rules Implementation (DAC7, DAC8, DAC9): Poland’s Ministry of Finance launched a public consultation on July 25, 2025, for a new law to implement EU directives DAC7, DAC8, and DAC9, introducing automatic exchange of information and reporting requirements for digital platforms and crypto-assets. The proposed effective date is January 1, 2026.
- “Poland to Implement DAC7, DAC8, DAC9 Tax Rules for Enhanced International Tax Compliance – VATupdate”
- Changes to VAT Rules for Tourism and Transport Services: The European Commission plans to revise VAT taxation rules for tourism and transport services, focusing on the VAT margin procedure in tourism and potentially changing the place of taxation to allow for VAT deduction.
- “European Commission Proposes Changes to VAT Rules for Tourism and Transport Services – VATupdate”
- Presidential VAT Cut Proposal: Polish President Duda is expected to propose a 1% VAT reduction, though its political support in Parliament is uncertain.
- “Polish President Duda to Propose 1% VAT Cut Amidst Parliamentary Opposition – VATupdate”
- e-Tax Office Mobile App: From July 25, 2025, organizations can fully utilize the e-Urząd Skarbowy mobile app for tax matters, offering 24/7 access, time/cost savings, and secure document submission without qualified signatures.
- “Practical Guide to e-Tax Office and National e-Invoice System for Organizations – VATupdate”
Link to the Newsitems on www.VATupdate.com
