For years, joint liability in Polish VAT has been associated primarily with transactions involving so-called “sensitive goods”. Businesses purchasing fuel, steel products or other items listed in Appendix 15 to the VAT Act have become accustomed to exercising enhanced caution when selecting suppliers. However, the Ministry of Finance is now proposing a significant expansion of this mechanism. If the draft legislation is enacted, the risk will no longer be limited to goods – it will also extend to a broad range of services, including certain intangible services listed in the newly proposed Appendix 16 to the VAT Act
Why is the government introducing this change?
The planned changes are intended to address VAT fraud involving fictitious transactions and so-called “empty invoices”. According to the explanatory memorandum accompanying the draft legislation, tax authorities have identified a recurring pattern in which fraudulent taxpayers use selected intangible services as a vehicle for generating artificial tax deductions. As a result, the legislator intends to shift part of the risk from the supplier to the purchaser.
The proposal is part of a broader effort to tighten the VAT system and strengthen the tools available to the tax authorities in combating organised tax fraud. In the government’s view, the existing regime has proven effective in the area of goods, which is why a similar approach is now being considered for selected services.
Which services may be covered?
The new appendix is expected to include a number of commonly purchased professional services, such as advisory, management, accounting, bookkeeping, advertising and research services. These are not niche transactions associated with high-risk industries; they are services used by virtually every medium-sized and large business. Consequently, the proposed changes have the potential to affect a much broader group of taxpayers than the existing joint liability regime.
Importantly, the services are expected to be identified through specific PKWiU classifications. According to the draft’s explanatory memorandum, this approach is intended to reduce interpretative disputes over whether a given service falls within the scope of the new rules.
What would change for purchasers?
Under the proposed rules, taxpayers acquiring services covered by Appendix 16 may become jointly and severally liable for the supplier’s VAT arrears if they knew, or had reasonable grounds to suspect, that the VAT relating to the transaction would not be properly remitted to the tax authorities. This is a well-known concept in the Polish VAT system, but its extension to services may have far-reaching consequences for routine business transactions.
Another important aspect is the practical difficulty of assessing whether a service has genuinely been performed. Unlike the purchase of physical goods, the delivery of intangible services is often evidenced through reports, analyses, presentations, recommendations or other non-material outputs. This creates additional challenges both for taxpayers and tax authorities. Businesses may therefore need to strengthen their internal procedures for documenting the actual performance and business purpose of acquired services.
Due diligence will become even more important
The draft legislation also highlights factors that may indicate an elevated tax risk. These include transactions conducted on unusual commercial terms or situations where the price significantly deviates from market conditions without an economic justification. In practice, this means that due diligence procedures are likely to become even more important. Verification of suppliers, documentation of negotiations, evidence of service performance and proper commercial justification may become key elements of tax risk management.
For many businesses, the focus will no longer be limited to obtaining a valid VAT invoice. Tax teams and procurement departments may increasingly be expected to verify not only who provides the service, but also whether the supplier appears capable of performing it and whether the agreed remuneration reflects market realities.
A significant shift in VAT compliance
From a broader perspective, the proposal reflects a continuing trend of transferring responsibility for VAT compliance further along the supply chain. While the objective of combating tax fraud is difficult to dispute, businesses may legitimately question whether purchasers of ordinary professional services should bear the risk of their suppliers’ tax misconduct.
If adopted in its current form, the new Appendix 16 may fundamentally change the way companies approach the procurement of intangible services. What has traditionally been viewed as a purchasing decision could increasingly become a compliance exercise, requiring enhanced scrutiny not only of the service itself, but also of the provider behind it.