Poland considers allowing VAT groups and consulted on the issue with the European Union VAT Committee on 16 November 2020. The plan is to introduce the mechanism in two stages: as a pilot programme mainly for large enterprises and as an open model with the scheme available also to small and medium enterprises.

The fundamental concept behind VAT group treatment is that no VAT will be charged on transactions between group members and that all the group members will be subject to joint taxation as regards VAT.

In Poland, the option to create a VAT group will be open to members of a tax group (as defined in CIT law) if they are closely bound to each other by financial, economic and organisational links, with the links to be defined in the amended VAT Act. Consequently, if a VAT group loses its group status for CIT purposes, it will no longer be eligible for VAT group treatment.

VAT group status will be accorded by the relevant tax office, which will register the group as a taxable person and strike off all the group members as taxable persons, provided the VAT group eligibility requirements are met. In the same way, all VAT group members will be jointly and severally liable for each other’s VAT compliance throughout the duration of the group.

In accordance with the consultations report published on European Commission’s website, new VAT regulations introducing VAT groups are supposed to become effective in early 2021. However, no official draft of such new regulations has been published yet.

We will keep you up-to-date with the progress of this legislation.

If these issues pertain to your business and you are interested in our assistance, please contact your WTS&SAJA consultant.

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This Newsletter is provided for general information purposes to keep you up-to-date with changes in tax law, tax rulings by authorities, case law of courts and interesting commentaries. Doradztwo Podatkowe WTS&SAJA shall not be held legally liable for any acts or omissions resulting from reliance on such information.