Who is a tax representative?
A tax representative is a person or entity authorised to perform specific tax-related duties on behalf of a taxpayer. In Poland, the term is most commonly associated with VAT matters and with taxpayers that do not have their seat of economic activity, fixed establishment, permanent residence or habitual residence in the European Union. The role of a tax representative is regulated primarily by the Polish VAT Act and should not be confused with general legal representation under a power of attorney.
A VAT tax representative may act for a foreign business in dealings with the Polish tax authorities. Depending on the applicable arrangement, the representative may register the taxpayer for VAT purposes, submit VAT returns and other required filings, maintain tax records, communicate with the authorities, and support the settlement of VAT due in Poland.
The appointment of a tax representative does not mean that the foreign business ceases to be a taxpayer. The foreign entrepreneur remains responsible for its own business activity and tax obligations. However, in certain cases provided for by law, the tax representative may bear joint and several liability for the VAT obligations of the taxpayer it represents. For this reason, both the taxpayer and the representative should clearly define the scope of cooperation, reporting procedures and access to documentation.
What does a tax representative do?
The practical role of a tax representative depends on the taxpayer’s business model, transactions performed in Poland and VAT registration status. A representative may assist a non-Polish business that sells goods to Polish customers, imports goods, participates in supply chains involving Poland, stores goods in Poland or provides services subject to Polish VAT rules.
Typical responsibilities may include preparing and filing VAT returns, submitting VAT recapitulative statements where required, supporting VAT registration or deregistration, reviewing invoices and transaction documentation, and corresponding with tax authorities. A tax representative may also help assess whether a business has a VAT fixed establishment in Poland or whether its activities create other tax registration and reporting obligations.
In specified import transactions followed by an intra-Community supply of goods, Polish law allows a tax representative to use a simplified VAT settlement procedure on behalf of the taxpayer. The availability of this option depends on statutory conditions and the taxpayer’s circumstances. It should therefore be assessed individually before a foreign business starts taxable activities in Poland.
The term “tax representative” may also be used more broadly in everyday business language to describe a lawyer, tax adviser or other authorised professional representing a taxpayer before tax authorities. From a legal perspective, however, this broader representation is usually based on a power of attorney and may be subject to different rules than the specific VAT tax representative institution.
When is it worth using a tax representative?
Support from a tax representative may be important when a foreign company begins operations in Poland without establishing a Polish subsidiary or branch office. It may also be mandatory where a taxpayer established outside the European Union is required to register as an active Polish VAT taxpayer.
Individuals and businesses may also seek professional support when they receive correspondence from the tax authorities, face a VAT audit, plan cross-border transactions, intend to recover VAT, or need to correct previous tax filings. For entrepreneurs operating internationally, proper VAT settlements often require an analysis of contracts, delivery terms, invoices, logistics arrangements and the status of counterparties.
A prompt consultation with a tax representative or tax lawyer can help identify registration duties before transactions are completed. This may reduce the risk of filing errors, late-payment interest, tax arrears, disputes with authorities, joint and several liability or financial losses resulting from incorrectly calculated VAT.
Legal support in matters involving a tax representative
Before appointing a tax representative, it is advisable to verify whether the appointment is mandatory, permitted or commercially justified in the specific case. The scope of authority should be documented carefully, particularly where the representative will submit filings, receive official correspondence or have access to accounting records and transaction data.
Support from a law firm in matters involving tax representation may include in particular:
- assessing VAT registration obligations in Poland;
- analysing whether a foreign business requires a VAT tax representative;
- advising on the legal status and liability of a tax representative;
- preparing powers of attorney and representation documentation;
- reviewing cross-border supply chains and VAT settlements;
- supporting communication with Polish tax authorities;
- assisting during a tax audit or tax proceedings;
- advising on VAT compliance, invoicing and reporting obligations.
Need assistance with a tax representative or Polish VAT obligations? Contact us.