As your business grows, you’ll likely consider selling to the EU from Poland. This is a great step, but it’s also a signal that it’s time to learn about new tax obligations. The rules for international sales are completely different from domestic ones, with key terms like VAT-UE, WDT, and “reverse charge”. In this guide, we will simply explain these important rules to ensure your expansion goes smoothly.
Step 1 for Selling to the EU from Poland: VAT-UE Registration
If you plan to conduct transactions with companies from other European Union countries, your first and most important duty is to register as a VAT-UE taxpayer.
- Who does it apply to? Both active VAT payers and entrepreneurs who are VAT-exempt but plan to provide services or sell/acquire goods from companies within the EU.
- How to register? You submit a VAT-R form to your tax office, checking the appropriate boxes for intra-community transactions.
- What do you get? You receive a European VAT identification number, which is your Polish NIP number preceded by the prefix “PL”. You will use this number on invoices for your EU contractors.
Trading Goods: WNT and WDT in EU Sales
These two acronyms relate exclusively to the trade of goods between companies from different EU countries.
WNT – Intra-Community Acquisition of Goods
- What is it? Simply put, it’s the purchase of goods from a company in another EU country for the needs of your business in Poland.
- How does it work? You purchase the goods with a 0% VAT rate from the EU seller. However, it is your responsibility to calculate and pay the Polish VAT on this purchase in Poland. If you have the right to deduct it, you also show the same tax as input VAT, which makes the transaction tax-neutral for you.
WDT – Intra-Community Supply of Goods
- What is it? This is the sale of goods to a company in another EU country.
- How does it work? You can apply a 0% VAT rate, provided that:
- Both you and your buyer are registered for VAT-UE.
- You have documents confirming that the goods have actually left Poland (e.g., shipping documents).
Selling Services to the EU from Poland: The Reverse Charge Rule
This is the most common scenario for freelancers and small service-based businesses. The key principle here is the reverse charge mechanism.
- What is it? When providing services to a business in another EU country, it is the buyer who is obligated to settle the VAT in their own country, according to their local rate.
- How to issue an invoice?
- You must be registered for VAT-UE.
- You issue an invoice without a VAT amount, using the “NP” (not subject to) annotation.
- The invoice must include the note “reverse charge”.
- You must provide your VAT-UE number and your client’s VAT-UE number.
Example: A Polish programmer (an active VAT-UE payer) provides a service to a German company (also a VAT-UE payer). They issue an invoice for €1,000 with the “NP” rate and the “reverse charge” note. The German company then calculates and settles the German VAT on this transaction itself.
Export of Services Outside the European Union
What if your client is a company from Switzerland, the USA, or the UK? In this case, we are dealing with an export of services.
- What is it? This refers to providing services to a contractor whose headquarters are located outside the territory of the European Union.
- How is it taxed? Similar to intra-community services, the place of taxation is the buyer’s country.
- How to issue an invoice?
- You issue an invoice without Polish VAT, using the “NP” (not subject to) rate.
- You do not need to include the “reverse charge” note, but it is good practice to add information that the place of taxation is the buyer’s country.
- VAT-UE registration is not required for these transactions, but if you are a VAT payer, you will often have it anyway.
Summary
Starting to sell to the EU and beyond opens up huge opportunities but requires knowing a few key rules. Remember:
- Trading with EU companies? Register for VAT-UE.
- Selling goods to the EU? Apply the 0% VAT rate (WDT) but keep your documents in order.
- Providing services to an EU company? Issue an invoice without VAT and with a “reverse charge” note.
- Providing services to a non-EU company? This is an export of services – also invoiced without Polish VAT.
Although it may seem complicated at first, in practice, the process is logical and repetitive. If in doubt, always consult your accounting office.
