Mail-order sale

24 July 2020

by Adrian Maczura, Żaneta Niestier

Mail order sale is very popular. More and more people buy online because electronic purchases are fast, convenient and sometimes even cheaper than buying in traditional stores. E-commerce allows you to easily shop abroad so foreign customers can buy goods in Poland without any difficulties. Therefore, many businesses start selling online and some of them offer only online sales.

In mail order sale the ordered goods are shipped by mail or courier. The customer pays for the goods either in advance to the seller’s bank account or on delivery (COD). The seller registered for VAT in an EU Member State may choose the country of taxation of the supply if certain conditions are met, namely, if the goods are sold to a customer in another EU Member State who does not account for intra-Community transactions.

Mail order sale from Poland

The Polish VAT Act defines mail order sale from Poland to another EU Member State as mail order sale from Poland. In mail order sale from Poland goods are supplied from Poland to a foreign enterprise which is not a VAT-registered taxpayer and is not obliged to recognise intra-Community supplies of goods (ICS) or to an individual in another EU Member State. The procedure to account for mail order sale from Poland depends on the seller’s annual turnover from supplies to a given country. Each Member State must set such a limit, which may not be lower than EUR 35,000 and higher than EUR 100,000. Once the seller exceeds the limit, he must register for VAT in the country to which he supplies mail-ordered goods. This means that, from then on, every mail order sale from Poland will be governed by the laws of the country of destination. Before reaching the limit, the taxpayer (seller) has an option to choose the country of destination as the place of taxation of the supply of goods.

To this end, he must notify Polish tax authorities at least 30 days before the date of supply from which the taxpayer wants to use that option.

Moreover, within 30 days of the first supply of goods, the taxpayer is obliged to present to the head of the tax office a document confirming that a competent tax authority in another Member State has been notified of their intention to account for VAT in that State.

The selected option is valid for at least 2 years of the date of the first supply.

Mail order sale to Poland

Foreign businesses selling goods to individuals not running any business activity in Poland and individuals and other entities not entitled to account for intra-Community acquisition of goods may account for VAT in the country of dispatch if the total value of mail order sales to Poland does not exceed PLN 160,000.  Once this limit is exceeded, foreign sellers must register for VAT and account for output VAT in Poland. In such a case, the mail order sale is subject to Polish laws and must be disclosed in Polish VAT records and VAT returns. Just like with mail order sale from Poland, foreign taxpayers may choose Poland as the country of taxation of the supply of goods as long as they have not exceeded the limit of mail order sales. To do it, they must notify the head of the tax office at least 30 days before the date of the supply from which they want to use the option.
The selected option is valid for at least 2 years of the first supply and requires that the seller registers for VAT in Poland.