Poland: Retail sales tax, no further delay expected; effective 1 January 2021

Poland: Retail sales tax, no further delay expected

The Ministry of Finance has confirmed that it does not intend to further delay the effective date of Poland’s retail sales tax.

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Introduction of the new tax (under legislation enacted in 6 July 2016) has already been postponed several times due to the ongoing dispute between Poland and the European Commission over the tax’s compatibility with EU single market regulations. Currently, all indications are that the retail sales tax will be effective beginning 1 January 2021.

Tax base and rates

The new retail sales tax will be imposed on retailers and will apply with regard to revenue from retail sales.

For these purposes, “retail sales” are defined as the sale of goods to consumers, constituting part of the seller's business activity, based on a contract concluded at the business premises or off-premises (within the meaning of law on consumer rights), conducted in Poland, and also in situations when the sale of goods is accompanied by provision of a service that is not registered separately.

The tax liability and obligation arises when the seller's revenue in a given month exceeds the threshold of PLN 17 million (approximately €4 million). The tax is triggered when the threshold amount is reached. The tax base is the surplus of revenues from retail sales over PLN 17 million earned in a given month, and the rates of the retail sales tax are as follows:

  • 0.8% of the tax base, from the excess of revenue not exceeding PLN 170 million
  • 1.4% of the excess of revenue exceeding PLN 170 million

Collection procedure

Taxpayers subject to the retail sales tax are required to: 

  • Submit tax returns, prepared in accordance with a form template, to the head of the competent tax office
  • Calculate and remit the tax to the competent tax office for monthly settlement periods, with remittances due by the 25th day of the month following the month for which the tax is due

Retailers whose monthly revenue from retail sales does not exceed PLN 17 million are not required to submit returns on the tax amount due.

Dispute between Poland and the European Commission

The European Commission found that the retail sales tax was incompatible with the common market because it granted “smaller undertakings” an impermissible advantage and therefore constitute state aid. Poland challenged the EC’s decision before the General Court of the European Union. In 2019, the General Court annulled the EC’s determination, finding no evidence of any selective advantage and therefore no state aid in favor of undertakings with lower turnover. The EC appealed to the Court of Justice of the European Union (CJEU).

The Advocate General of the CJEU in an October 2020 opinion concluded that the Polish tax on retail sales does not infringe the EU law. The CJEU's judgment in this case is expected in early 2021. Read TaxNewsFlash
 

Read a December 2020 report prepared by the KPMG member firm in Poland

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