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VAT warehouse – a new concept in the Polish legal order

The Ministry of Finance has announced the concept of the VAT warehouse, as well as consultations on the implementation of this institution into the Polish legal order.

Opinions on the proposed provisions concerning the operation of VAT warehouses can be submitted until 3 April 2023.


What will the simplification of settlements in a VAT warehouse consist of?

The concept of VAT warehouse was introduced to support international trade. The taxpayer who sells goods that will be placed in the warehouse as part of this transaction will apply the 0% VAT rate, provided that the buyer confirms the application of the VAT warehouse procedure to the goods, and the supplier issues an invoice in the KSEF system. 


The benefit of improved liquidity will be felt primarily by exporters and those making intra-Community deliveries. At present, when they buy goods in the country, they pay VAT as part of their price and then deduct it in returns. When the goods are intended mainly for sale outside Poland, which is subject to a 0% VAT rate, they are unable to declare and subsequently reduce output tax. The only way to effectively recover the VAT paid as part of the price of a product is to regularly request the excess input tax to be refunded, and to wait for the refund to be made, which can take a longer or shorter time. The purchase of goods for VAT warehousing will eliminate the excess input VAT and the freeze of funds during the time of waiting for the refund to be made.


Once the goods are in the VAT warehouse, it will be possible to perform services on them. However, these have to be activities directly related to the goods, such as sorting, reloading, packaging, or maintenance. These services, like the delivery of the goods to the warehouse, will be subject to the 0% tax rate. The 0% VAT rate will also be applied by the taxpayer who will introduce goods to a VAT warehouse as part of an intra-Community acquisition. 


VAT warehouse permit

According to preliminary assumptions, a VAT warehouse must be located in a place that is a customs warehouse at the same time. For those who currently operate customs warehouses, this implies the possibility of extending the permits they currently hold.


Meanwhile, other businessmen who would like to start operating a VAT warehouse, for their own purposes, or as a service, should first obtain a customs warehouse permit. Customs authorities usually expect the entity that operates a customs warehouse to provide a comprehensive guarantee, which also requires prior authorisation. This implies that, before applying for a VAT warehouse permit, the entity is required to obtain at least one, and more likely two permits on the basis of customs proceedings.


These steps are worth taking well in advance. As the introduction of VAT warehousing comes into effect, more interest in setting up VAT warehouses should be expected, which would mean greater workloads for customs and tax authorities and longer decision times.


Who will be eligible to benefit from it?

The entity that places goods under a VAT warehouse procedure does not have to hold a VAT warehouse permit at the same time. It can acquire goods at a 0% VAT rate, using a VAT warehouse run by another entity, however, then it needs to be prepared for higher costs of storage and logistics, as well as customs and tax services (the warehouse keeper will have additional obligations and be subject to joint and several responsibility for the settlement of VAT for losses arising during storage).


However, an entity benefiting from VAT warehouses run by another entity has to obtain a permit for accessing a VAT warehouse procedure (separate from the permit for operating a VAT warehouse), which will involve meeting specific requirements, i.a. with regard to solvency and having a clean criminal record.


What will not be subject to the VAT warehouse procedure?

For the time being, the Ministry of Finance assumes that the VAT warehousing procedure is not addressed to buyers of excise goods. The procedure will also not apply to goods consumed in the warehouse or delivered to the warehouse as part of retail sales. The provisions also do not involve the possibility of selling goods in a VAT warehouse (as opposed to a customs warehouse, where B2B deliveries are possible). Such a sale would imply the termination of a VAT warehousing procedure and the taxing of the delivery according to the general rules.


Termination of VAT warehousing procedure

As the goods are removed from the warehouse, the taxpayer will recognise and pay VAT directly to the tax authority. The tax will constitute input VAT, subject to deduction in JPK_V7M. The tax base will be the same as the base subject to the 0% rate at the time of placement of the goods in the warehouse, enlarged by the value of any services that may be performed on the goods in the warehouse. 


The Ministry of Finance points out that, once certain conditions are met, it will also be possible to simplify the process by not paying the tax and settling VAT in the return only – presumably, analogous to the mechanism set out in art. 33a of the VAT act. However, no further details have been outlined so far. 


Should you be interested in participating in the consultation or are considering the application of VAT warehousing procedure in your business, do not hesitate to contact us.