VAT Deregistration for Foreign Companies – When Can the Polish Tax Office Remove You from the Register?

Increasingly, foreign companies are opting for VAT registration in Poland, even if they don’t have a permanent establishment or office in the country. This allows them to sell goods online to the Polish market or use the OSS system for cross-border sales within the EU. However, registering for VAT alone does not guarantee that the Polish tax office will not initiate VAT deregistration. It’s essential to understand when this can occur and how to prevent potential issues.

When Can the Tax Office Deregister a Foreign Company from VAT?

The Polish tax authorities have the authority to remove a foreign company from the VAT register if they determine that the company does not meet the legal requirements or is not actually conducting business in Poland. The most common reasons include:

• No business activity in Poland – the company is not selling goods or providing services in the country.
• Incorrect VAT registration – the information provided during registration was incomplete or incorrect.
• Failure to submit VAT returns – if the company fails to submit returns for an extended period (usually 12 months) or reports no transactions, the tax office may start a deregistration procedure.
• Submitting “zero” VAT returns – if zero-activity returns are filed for at least six consecutive months, this may trigger deregistration.
• Lack of contact or misuse of the system – for example, no mailing address provided or registration solely to circumvent the law.

How Does the VAT Deregistration Procedure Work?

If the tax office suspects that a foreign company should not remain in the Polish VAT system, it will initiate a deregistration procedure. The process typically includes:

1. Request to update data or explain business activity – the company is given the chance to prove actual business operations in Poland.
2. Deregistration decision – if the company does not respond or fails to provide evidence, the tax office issues a decision with justification.
3. Appeal period – the company generally has 14 days to file an appeal against the decision.

Consequences of VAT Deregistration for Foreign Companies

Being removed from the Polish VAT register has clear implications:

• The company is no longer a VAT taxpayer in Poland.
• It cannot issue VAT invoices or reclaim VAT
• Re-entering the VAT system requires a new registration.

How to Avoid VAT Deregistration in Poland

To prevent VAT deregistration in Poland, foreign companies should:

• Submit VAT returns regularly, even if no sales were made.
• Keep registration data accurate and up to date.
• Respond promptly to all requests and correspondence from the tax office.
• Ensure actual business activity in Poland matches the declared profile.

Conclusion

Registering for VAT in Poland is a practical tool for foreign companies, but it requires active management and communication with the tax authorities. Lack of sales, incorrect information, or ignoring official correspondence can result in VAT deregistration. Companies should follow the rules and respond to all tax office notices to avoid interruptions in selling to the Polish market.