The Act of 6 July 2016 on the Retail Sales Tax entered into force on 1 September 2016, however, due to the European Commission Decision 2018/160 of 30 June 2017 on State aid SA.44351 (2016/C) (ex 2016/NN) implemented by Poland with regard to the retail sales tax (notified under document number C(2017) 4449), the Commission ordered Poland to suspend the introduction of the tax and the Act was therefore suspended.
Poland appealed the decision in its entirety. The General Court of the European Union issued a judgment of 16 May 2019 in case numbers T-836/16 and T-624/17, annulling the decision. The judgment is not final. The Commission has filed an appeal with the Court of Justice of the European Union. The written phase of the appeal proceedings is currently underway.
Due to the ongoing proceedings before the General Court of the European Union, the tax's entry into force has been postponed several times. Currently, its entry into force is scheduled for June 1, 2020 (i.e., the tax will apply to retail sales revenues earned from July 1, 2020). However, the entry into force of the act may be postponed again.
Content of the Act:
The Act itself provides that income from retail sales is subject to tax.
Retail sale is the sale of goods for consideration within Poland to consumers, both on and off the business premises, even when the sale is accompanied by the provision of a separately unrecorded service. The sale of goods for consideration has a broader meaning than the civil law definition of sale. The term "sale for consideration" should be understood as any form of transfer of ownership of goods, whether performed in one's own name and on one's own behalf or on behalf of third parties (including those performed under a commission or agency agreement), for consideration. The provision of services is not considered a retail sale. However, if the sale of goods for consideration is accompanied by the provision of a service, for the purposes of the Act, this service is considered a taxable retail sale. For example, the sale of a book including its packaging, or the sale of a washing machine including its delivery. However, if the service provided is recorded separately from the sale of goods, this service will not be subject to taxation.
At this point, it should be assumed that retail sales will result from receipts and invoices issued to natural persons – consumers, without a Tax Identification Number.
For the purposes of retail sales tax, a consumer is understood as a natural person who does not conduct business activity and a natural person conducting business activity who purchases goods without connection with the business activity he conducts, as well as a flat-rate farmer.
The taxpayer in this respect is the retailer, including legal entities, carrying out the retail sales referred to above.
The tax base is the excess of retail sales revenue in a given month over PLN 17,000,000.00, meaning taxation applies to revenue earned from the moment this amount is exceeded until the end of the month. The tax base also includes advance payments, installments, prepayments, and deposits, as well as amounts received before the goods are delivered.
Revenue from retail sales is determined on the basis of the turnover recorded using cash registers and unrecorded turnover in accordance with the exemption specified in the implementing regulations issued under Article 111 paragraph 8 of the Act of 11 March 2004 on Goods and Services Tax.
Retail sales revenue does not include value added tax (VAT). Revenue earned in a given month is reduced by the amounts paid in that month for returned goods, net of value added tax.
Excluded are, among others, diesel fuel intended for heating purposes and heating oil.
The tax rates are:
- 0.8% of the tax base – in the part in which the tax base does not exceed PLN 170,000,000;
- 1.4% of the excess of the tax base over PLN 170,000,000 – in the part in which the tax base exceeds PLN 170,000,000.
Taxpayers are obliged to:
- submitting a tax return on the amount of tax, prepared according to the established template, to the head of the tax office responsible for the taxpayer,
- calculating and paying tax to the account of the tax office, through which the head of the tax office competent for the taxpayer performs his/her tasks – for monthly settlement periods, by the 25th day of the month following the month to which the tax relates.
Taxpayers below this threshold do not file a tax return.
If you have any further questions, please contact us
