Retroactive VAT registration in Poland and other European countries – Is it possible?

When is VAT registration in Poland mandatory?

The obligation to register for VAT arises when a business sells goods and services listed in the VAT Act, and the value of sales in the previous year exceeded PLN 200,000. Additionally, the taxpayer should register for VAT before meeting these conditions. However, this does not always happen, and in such cases, retroactive VAT registration may be a solution.

If you are looking for information on the VAT registration process itself, VAT exemptions, obligations that an active VAT taxpayer must fulfill, or the relevant tax office for registration, we invite you to read our article on these topics – VAT Registartion in Poland.

When is retroactive VAT registration possible in Poland?

Retroactive VAT registration can be applied for by businesses that are not registered as active VAT taxpayers but have been fulfilling the obligations associated with being a taxpayer. This means they have been issuing invoices with VAT, submitting VAT-7 declarations, sending JPK_VAT files, or paying the due VAT.

This position is confirmed, among others, by an individual interpretation issued by the Director of the National Revenue Information on May 29, 2023, with the reference number 0114-KDIP1-3.4012.170.2023.1.MPA.

Retroactive VAT registration – The position of the Director of the National Revenue Information

In the case mentioned above, the registration application was submitted in 2023, although the business had been operating as an active VAT taxpayer since October 2018 – issuing VAT invoices, submitting JPK_VAT files, and paying the due VAT. The business owner was under the impression that they were on the white list of VAT taxpayers and registered as an active VAT taxpayer, which, as it turned out, was not true.

As a result, the business owner inquired about the possibility of retroactive VAT registration and the right to deduct VAT on purchases made since the beginning of their operations.

Need help with VAT?

Contact us, tell us what the challenge is, and our specialists will take care of the rest!

Schedule a consultation

Retroactive VAT registration and filing late VAT returns in selected European countries

As mentioned earlier, retroactive VAT registrations are also possible in some European countries, although certain conditions may apply. These may include confirming business activity during the past period, which can be proven by providing invoices or contracts with contractors. Additionally, retroactive VAT registrations often involve penalties and fines for failing to meet obligations on time.

When might retroactive VAT registration be necessary?

Among the inquiries we receive, several common cases related to retroactive VAT registration stand out. Below are a few examples:

I exceeded the WSTO threshold and didn’t register for VAT in the country where I’m selling. What should I do?

In this case, you should register for VAT as soon as possible with a retroactive date (if allowed in the country) or with a current date, and account for your sales in the VAT return for the period in which the sale occurred. An alternative is to register for VAT OSS, where the accounting period is quarterly.

I import goods from China and agreed with the supplier on specific Incoterms, but the delivery didn’t arrive in Poland but in Austria, from where I need to transport the products to a warehouse in Poland. How do I handle this situation in compliance with VAT regulations?

In this situation, the entrepreneur must first register for VAT in Austria in the month of delivery, file a VAT return, pay the due VAT and customs duties, and then, if they no longer need the Austrian VAT number, deregister from VAT in that country.

When is it necessary to file VAT returns for past periods?

In some countries, it is not possible to file a VAT return with a retroactive date. However, it is allowed to file returns for past periods after obtaining a VAT number. Such situations may arise, for example, when:

• An entrepreneur conducts domestic sales in another country or distance sales to private customers from the territory of another state;
• The entrepreneur is registered as a VAT taxpayer in another EU country, stopped conducting transactions requiring local VAT accounting, failed to deregister from VAT, and hasn’t filed zero returns;
• An e-commerce seller missed the deadline to register for VAT OSS. As a result, they must register for VAT in the country where they sent their goods, file VAT returns for that period, and then deregister and handle future sales through VAT OSS.

Pre-registration period and the right to deduct input tax in Poland

The right to deduct input VAT related to taxable activities means that the entrepreneur can reduce the amount of VAT due by the amount of input VAT. Furthermore, it is available to VAT taxpayers, and the input VAT relates to expenses on goods and services used for taxable activities.

It is important to note that in the previously mentioned case, the Director of the National Tax Information confirmed that the entrepreneur requesting the individual interpretation retains the right to deduct VAT for the accounting period that took place before the retroactive VAT registration. Retroactive VAT registration is thus crucial for deducting input tax related to business activities. If an entrepreneur is not registered as an active VAT taxpayer, they are not entitled to deduct VAT until they are registered.

Is retroactive EU VAT registration possible?

Retroactive EU VAT registration is not possible. It must take place before the first intra-community transaction. However, if an entrepreneur fails to register before the first transaction, they should register as soon as possible and file the required returns for past periods.

It’s important to remember that the EU VAT return – also known as a summary declaration – must be submitted monthly. If no intra-community transactions occurred in a given period, there is no obligation to file it.

Is retroactive VAT OSS registration possible?

Many entrepreneurs who have been late with their registration ask the question – Is retroactive registration for VAT OSS possible? Here we hasten to answer – it is not possible to register for VAT OSS with a retroactive date.

Registration for VAT OSS should take place by the 10th day of the month following the quarter in which the seller exceeded the mail order limits of EUR 10,000 or before the beginning of the quarter in which the seller plans to start using this procedure.

However, below you will find answers to frequently asked questions that we receive from interested parties.

On September 2, I realized that in July I had exceeded the WSTO limit and I would like to use VAT OSS. What can I do in this situation?

In such a situation, the seller should register for VAT OSS in order to be able to use it in the future. However, due to the unsettled sales that have already taken place, he must register locally for VAT in the countries in which the transactions took place and then settle the outstanding sales locally. Attention! If the entrepreneur remains registered as a VAT payer in another country, they must remember to file zero returns.

In the last month of the current quarter, I realized that I had exceeded the WSTO limit, can I still register for VAT OSS and settle this quarter in the following month?

Registration for VAT OSS can be done by the 10th day of the month following the month in which the WSTO limit was exceeded – 10,000 Euro. If it occurred later, e.g. on the 11th day, then VAT OSS will not apply to the settlement of transactions made in the month in which the limit was exceeded. Therefore, in the event of a delay, you should register for VAT locally and settle such transactions there as well.

If you want to learn more about the VAT OSS procedure, we encourage you to read our article – What is VAT OSS? Changes to VAT settlements in the EU.

How can Taxology help with VAT registration and filing?

If you’re an entrepreneur, especially in the e-commerce sector, and VAT issues pose a challenge, you’re in the right place! Our specialists can handle VAT registration on your behalf, file overdue returns, and liaise with tax authorities in other countries if necessary. We can also assist with VAT OSS, and if you’re registered as a VAT taxpayer in another country but no longer conduct transactions there, our VAT Compliance team can deregister you.

If you need any support, schedule a consultation and point out what the problem is!

Retroactive VAT registration - Summary

Retroactive VAT registration in Poland is a viable option, but requires meeting certain conditions – including previously behaving as an active VAT payer, i.e. submitting declarations, paying the tax due or issuing VAT invoices – and taking special care to avoid problems with tax authorities. Before taking such a step, it is worth consulting a tax advisor to make sure that all formalities are completed correctly.

However, retroactive registrations in other European countries are not always possible. It all depends on the regulations in force in a given country. What is important, however, is the fact that even despite the lack of retroactive VAT registration in other European countries, the local tax offices allow the submission of overdue VAT returns. However, this often involves the need to pay penalties related to late fulfillment of tax obligations.

If you need support in tax matters, VAT matters or accounting, schedule a consultation and indicate what the problem is, and our specialists will take care of the rest.