Guide · VAT
Updated: · 8 min read · By Agnieszka Saladra, Certified Accountant
Issuing an invoice for a client abroad and not sure whether to add VAT or apply the 0% rate? We explain how a B2B service for an EU company (reverse charge) differs from a supply of goods (ICS and export), how to settle the import of services, and why you need VAT-EU registration and verification of the client in VIES. We also show how Luno-Group handles these settlements for you.
In short
There is no single 'foreign invoice' - how it is issued depends on three things: whether you are selling goods or a service, whether the client is a company (B2B) or a consumer (B2C), and whether the recipient is in the European Union or outside it. These answers determine who settles the VAT and what rate you put on the invoice.
This guide concerns B2B transactions - sales to companies - as well as supplies of goods and export. This is a completely different area from the VAT OSS procedure, which covers the sale of goods to consumers (B2C) in other EU countries. If you sell to private individuals abroad, read our separate guide on VAT OSS.
Misclassifying a transaction is one of the more common errors - it leads to the wrong VAT rate and corrections. That is why it is worth establishing these elements before you issue the invoice.
When you provide a service for a company from another EU country, the general rule from Article 28b of the VAT Act usually applies: the place of taxation is the country where the buyer is established. This means the service is not subject to VAT in Poland, and the tax is settled by the buyer in their own country - this is precisely the reverse charge mechanism.
To apply this mechanism, the buyer must be a taxable person - a company carrying out business activity, not a consumer. That is why it is worth confirming the client's status and their VAT-EU number before issuing the invoice. The Article 28b rule has many exceptions (e.g. services connected with immovable property), which have to be considered individually.
ICS is the sale of goods dispatched from Poland to a company in another EU country. Such a supply may be taxed at the 0% VAT rate - you issue an invoice without a tax amount while retaining the right to deduct VAT on related purchases. The 0% rate is not automatic, however: the conditions in the VAT Act have to be met.
Note: if you do not file the VAT-EU recapitulative statement, or report incorrect data on intra-Community supplies in it, the 0% rate for ICS does not apply - unless you properly explain the failure in writing to the head of the tax office (Article 42(1a) of the VAT Act). Simply filling the gap later does not automatically restore the right to the 0% rate, which is why proof and timeliness matter here as much as the invoice itself.
The sale of goods taken outside the European Union is export, which may also benefit from the 0% VAT rate. Here the key is confirmation that the goods actually left the EU customs area - that is, the appropriate customs document.
An export invoice does not contain foreign VAT - the customs settlement and any taxes in the country of destination are on the importer's side. Because of the varying times for receiving customs documents, it is worth establishing in advance when and how you will report the transaction.
The reverse situation: you buy a service from a foreign company (e.g. online advertising, software on a SaaS model, an IT service). Then you usually recognise an import of services and it is you - as the buyer - who settles the VAT in Poland, also under the reverse charge mechanism.
For many companies the import of services is cash-neutral (output VAT equals input VAT), but it still has to be reported correctly. Omitting the import of services in JPK is a common error, especially with small subscriptions to foreign tools.
Before you settle an intra-Community transaction (ICS, Article 28b services, acquisitions from the EU), you must be registered as a VAT-EU taxpayer. You do this by filing or updating the VAT-R form. After registration your NIP gains the PL prefix and becomes a VAT-EU number.
You report intra-Community transactions in the VAT-EU recapitulative statement, filed as a rule monthly, by the 25th day of the month following the month of the transaction. A mistake in the client's number or a lack of verification can call into question the 0% rate - which is why this step is so important.
You can issue an invoice in a foreign currency, but for VAT purposes you convert the amounts into złoty at a strictly defined rate. The general rule (Article 31a of the VAT Act): you apply the average NBP rate from the last business day preceding the day the tax obligation arises.
In practice, most mistakes come from applying the rate from the wrong day - e.g. from the day of payment instead of the day preceding the tax obligation. Good accounting software and an accountant's oversight reduce this risk.
Invoices for EU and non-EU clients bring together several areas at once: classifying the transaction, the right rate, proof, currency rates and timely VAT-EU reports. An error in any of these can mean a correction or the loss of the right to the 0% rate.
At Luno-Group an experienced accountant oversees your settlements, not the app alone. We combine the convenience of online accounting with the real support of a person who knows the rules and will answer your questions - in Polish or in English. We present how the individual procedures work, and the decisions on your sales model remain on your side.
Sources and legal basis
Most often no. For B2B services for a company from another EU country, you usually apply the reverse charge - you issue the invoice without VAT, with the note 'reverse charge' / 'odwrotne obciążenie', and the tax is settled by the buyer in their own country. The conditions include a valid VAT-EU number of the buyer and your own VAT-EU registration.
ICS (intra-Community supply of goods) is the sale of goods to a company in another European Union country. Export is the dispatch of goods outside the EU. Both transactions may carry a 0% VAT rate, but they require different documents: for ICS - proof of delivery to the buyer in the EU; for export - customs confirmation of dispatch outside the EU (the IE-599 / CC599C message).
Import of services is the purchase of a service from a foreign company, e.g. online advertising or software. As the buyer you settle the VAT in Poland under the reverse charge mechanism: in JPK_V7 you report output VAT, and if the purchase serves taxed activity, you simultaneously deduct that same VAT as input VAT. This applies to suppliers in the EU and outside it.
You verify the client's VAT-EU number in the free VIES system of the European Commission. The system confirms the status only as at the day of the check, so it is best to carry out the verification on the day of the transaction and keep the confirmation. An 'active' result is a condition for safely applying 0% to ICS and the reverse charge to services.
For VAT, as a rule you apply the average NBP rate from the last business day preceding the day the tax obligation arises. If you issue the invoice before that obligation, you may use the rate from the business day preceding the invoice date. Alternatively, you may choose the ECB rate, applying it consistently.
No. VAT OSS concerns the sale of goods and some services to consumers (B2C) in other EU countries once the EUR 10,000 threshold is exceeded. B2B invoices for EU and non-EU companies, ICS and export are settled under different rules - through reverse charge and 0% rates - and you report intra-Community transactions in the VAT-EU recapitulative statement.