As from 1 April 2013, the rules of taxation will change with regard to deliveries of goods in the territory of Poland by foreign taxable persons without a registered seat or a permanent business location in Poland. Such delivery is deemed to take place e.g. upon a sale of goods by a foreign company, if such sale is connected with issuance of goods from a warehouse located in Poland, and if the goods are not exported outside of Polish borders in connection with such transaction. Currently, regulations impose an obligation to settle the VAT on such transactions on the buyer of goods (Article 17 Section 1 (5) in connection with Section 2 and 5 of the VAT Act). The foreign entity, even if registered in Poland for VAT purposes, is not entitled to issue invoices including the VAT for local sale, and to settle such VAT in the submitted VAT declaration.

New regulations will allow foreign entities, which do not have a permanent business location in Poland, to settle the VAT on local goods supplies, if the non-resident registers for Polish VAT purposes. Therefore, if a foreign company registers for VAT purposes, then the obligation to settle the VAT will be imposed on this company, not on the buyer of goods. This obligation is also connected with the right to deduct or return input VAT included in invoices received by a registered foreign taxable persons on general terms, i.e. in VAT declarations. Currently the foreign entities registered in Poland for VAT purposes have right to deduct the VAT on general terms. However, such entities which do not dot disclose any taxable turnover in Poland, have to apply for the input VAT refund (which takes generally up to 60 days from the date of VAT return filing). As from the 1 April 2013 such entrepreneurs will be able to deduct the input VAT from the Polish output VAT resulting from the supplies in Poland. Only the difference between the output and the input VAT will be paid by the taxpayer to the tax authorities or reimbursed to him. The described change of regulations is therefore, as a rule, beneficial for foreign entities. The new VAT provisions can worsen the liquidity of Polish buyers of goods supplied by foreign entities registered for VAT purposes in Poland as the buyers will have to finance the VAT disclosed in the invoices of the suppliers.

Additionally it is to point out that the principles of the taxation of services rendered in Poland by foreign entities, which do not have any permanent business location in Poland, remain unchanged. If the recipient of such services is a VAT payer the recipient will be obliged to settle the VAT on these services even if the service provider is registered in Poland for VAT purposes (Article 17 Section 1 (4) of the VAT Act). This principle does not apply to services connected with immovable property. If such services are rendered by a foreign entity registered for VAT purposes in Poland, the foreign entity is obliged to settle the VAT on these services.

It should be noted that entities from outside the European Union are obliged to establish a tax representative in Poland before they commence sales taxed with the Polish VAT.