New obligation: Fiscal representative in EU countries
After the UK’s withdrawal from the EU on 31 January 2020 and the end of the transition period, from 1 January 2021 entities based in the UK are non-EU entities in the light of Polish VAT regulations (which is same as their treatment by also other EU Member States as well). Pursuant to the Polish VAT regulations, non-EU companies conducting business in Poland are obliged to register for VAT purposes in Poland and to appoint a fiscal representative (tax proxy). Prior to 2021, no such obligation existed as UK-based entities were meeting the condition of having their registered seat or fixed place of business within the territory of EU. One of the most important changes in the area of VAT taxations is that after Brexit UK based entities are required to appoint a tax proxy.
- British taxpayers conducting business activities in Poland before 1 January 2021 and
- British taxpayers planning to commence business activities in Poland after 1 January 2021,
are required to register in Poland for VAT purposes and to appoint a fiscal representative to make a Polish VAT compliance.
The registration should be done indicating the covered period as of January 1, 2021 and the first reporting should be done on February 25, 2021 (most cases).
What should be done
Pursuant to the Polish VAT provisions a fiscal representative is appointed by means of a written agreement and is by law liable for the tax liabilities of the entity which they represent.
A fiscal representative settles tax obligation for and in the name of represented taxpayer. Obligations of a fiscal representative include:
- VAT compliance – drawing up and submitting VAT SAF-T files (as of October 2020 there are no VAT returns in Poland), EC sales and purchase lists, INTRASTAT returns, keeping and storing documentation and records for the VAT purposes in compliance with Polish tax law;
- performing other activities resulting from the Polish VAT regulations, if authorized to do so in the written agreement (this might be e.g. representing the taxpayer in front of the Polish tax authorities during a fiscal control or tax verification activities).
A Polish fiscal representative not only bears a joint and several liability for any tax arrears of the taxpayer, but also in order to become a fiscal representative one has to fulfil a number conditions, including being licenced to provide professional tax advisory services.
Bearing in mind the level of responsibility borne by a fiscal representative, not many entities actively provide such services in Poland. Due to the liability of the fiscal representative for the tax liabilities of the entity which they represent, it is our standard policy to require a bank guarantee from the Client for the amount corresponding to the estimated amount of the Client’s VAT liability in a given tax year.
Arena Group an independent member of CPAAI and MGI associations meets all the criteria necessary to provide fiscal representative services. We can offer you our assistance in the process of VAT registration as well as VAT compliance. We will prepare and submit all the necessary documents and applications to keep all your VAT Polish obligations settled on time. If you would like to receive professional tax support regarding your tax liabilities and obligations in Poland please get in touch with us and find. We can help you to comply with the regulatory changes and at the same time limit their negative impact on the financial situation of your business.