At the end of 2025, the Ministry of Finance published a draft tax clarification on VAT fixed establishment (VAT FE).

It was stipulated that the purpose of the explanations is to present the rules for determining VAT FE for the purposes of issuing invoices in KSeF (i.e. VAT FE from the seller’s side).

When a foreign entity invoices in KSeF

The obligation to issue structured invoices will apply to taxpayers who:

• have a registered office in Poland,
• they do not have their registered office in Polish, but they have VAT FE here and it is VAT FE that participates in the supply of goods or services for which invoices are issued.

ATTENTION! The fact that the taxpayer has a Polish VAT number is not sufficient to consider that the taxpayer has a VAT fixed establishment in Poland.

What is VAT FE

VAT FE means any place, other than the registered office of the taxpayer, which is characterized by sufficient stability and an appropriate structure in terms of personnel and technical facilities to enable him:

• provision of services (the so-called active VAT FE);
• receipt and use of services provided for own needs of this VAT FE (the so-called passive VAT FE).

Personnel and technical facilities

The draft explanatory notes indicate that in order for a given place to be considered as VAT FE, it should have an appropriate structure in terms of personnel and technical facilities, such as: employees, machines, equipment, operating systems, etc., i.e. the number of staff and technical resources adequate to the profile of the business activity. This background may also consist of real estate, if it is necessary to carry out a given type of business activity, including an office where decisions are made in the field of ordinary management or contracts are drawn up.

Facilities can be:

• own (the back office of a foreign entity), but also
• made available to a foreign entity on the basis of agreements, such as lease or leasing, provided that it is available to it as its own, i.e. in a situation where the taxpayer (foreign entity) exercises control over such facilities comparable to the one it exercises over its own facilities.

As a rule, VAT FE will not occur in the case of a foreign entity using the services of employees of another company, if these employees are not subject to the instructions or control of this foreign entity, this entity has no influence on determining the organization of their work, employees do not have the right to conclude or negotiate commercial contracts in a manner binding on this foreign entity.

VAT FE will also not arise if personnel and technical resources, own or made available, are used for ancillary activities.

A structure that enables the provision of services

When determining the existence of VAT FE, it is necessary to pay attention to the extent of independence of such a place in relation to the main activity (head office), i.e. whether the fixed place of business is a structure that is characterized by the ability to make decisions, e.g. in the field of concluding contracts.

At the same time, VAT FE should have such means at its disposal to be able to provide the services it provides. The created structure should enable the real provision of services using the personnel and technical facilities in a given country.

The condition of conducting business in an “independent” manner means that the taxpayer, based on the facilities constituting VAT FE, should be able to conclude agreements within the scope of the current activity of that place, such as contracts for the delivery of goods or the performance of services.

Sufficient constancy

The personal and material structure at the VAT fixed establishment should be permanent, i.e. it should continuously have such means at its disposal that allow for the actual provision of services from that place.

Sufficient permanence is often indicated in the situation of concluding long-term agreements or exclusive agreements between taxpayers, in which case the existence of a structure with a sufficient degree of durability is emphasized.

In the event that a foreign entity uses the personnel and technical facilities of another entity located in the country, in order to meet the criterion of permanence in assessing the existence of VAT FE, as a rule, it is necessary to:

• concluding contracts for the provision of services or lease agreements concerning technical and personnel facilities, which are not subject to termination in a short time,
• the foreign entity has control over the personnel and technical facilities and disposes of them in a manner comparable to a situation in which the personnel and technical facilities would be the “property” of a foreign taxpayer.