The Finance Ministry have announced having started efforts to implement the VAT warehouse solution in Polish law. They published an on-line document with preliminary heads of the proposed act to amend the VAT Act. The document is already past tax consultations that lasted until April 3rd. For several years now, the European Union has had regulations on preferential VAT treatment of supplies related to customs warehouses or other warehouses (including VAT warehouses). These regulations, which are based on the VAT Directive, have to a limited extent been implemented also in Poland, see e.g. the zero-rating of goods placed under the customs warehousing arrangement.

The intention behind the VAT warehouse proposal is to introduce an arrangement that simplifies VAT compliance and collection, especially for undertakings engaged in international trade in goods. In accordance with the proposed solution, supplies or intra-Community acquisitions of goods into a VAT warehouse would be covered by a VAT warehousing arrangement allowing the trader to zero-rate those transactions under certain statutory conditions. One practical effect of the new law is that the relevant domestic VAT rate will in fact not apply to the transaction until the arrangement ceases (ends).

The other heads of the new law according to the Finance Ministry:

  • A VAT warehouse may be operated only at a place intended for a customs warehouse so that a VAT warehouse may not be set up unless a customs warehouse is first organised or already exists at the given place.
  • The VAT warehousing arrangement will apply only to non-excise goods.
  • The following operations will be allowed within a VAT warehouse: moving goods into or out of the warehouse, storing goods, supplying services directly related to the stored goods.
  • The zero-rating will apply also to services supplied in a VAT warehouse in relation to goods under the VAT warehousing arrangement, such services to include, without limitation, sorting, transloading, packing, keeping the goods at an appropriate condition or temperature, maintenance.
  • A VAT warehousing arrangement will cease when the taxable persons notifies the cessation and moves the goods out of the VAT warehouse, but also in the case of a supply of goods in the warehouse (sale without movement).
  • A VAT warehouse may be operated if the taxable person satisfies a number of conditions, e.g. has the status of a non-exempt taxable person, no arrears of public levies, and provides a bond to secure the VAT amount.
  • Using the VAT warehousing arrangement will require a special authorisation.

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

If this issue pertains to your business and you are interested in our assistance, please contact us.

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