Bloomberg Tax
Oct. 16, 2019, 7:00 AM

INSIGHT: Poland—EU Quick Fixes and Call-off Stock from 2020

Piotr Wyrwa
Piotr Wyrwa
RSM Poland

In January 2020, EU Quick Fixes are coming into force in Poland. One of the major changes concerns the significant amendment to the current “consignment warehouse” procedure regulated in the Polish VAT Act.

This is welcome news, as currently those provisions are rarely used by businesses. This will change when the improved procedure resulting from the EU Quick Fixes, called “call-off stock,” will be implemented. From 2020, this favorable procedure will be much simpler to manage.

Multinationals doing business in Poland may consider rearranging their VAT calculations in Poland. Cross-border business-to-business trade between member states will soon be made simpler.

Provisions Binding until the End of 2019

Currently, the Polish VAT Act provides a statutory definition of a “consignment warehouse.” This definition is quite specific and deviates from the common understanding of this term. Its strict understanding by the tax authorities is also the reason why the procedure is not often used.

According to the VAT Act, a consignment warehouse is a separate location on the premises of taxpayer A, that is used for storing goods belonging to taxpayer B, if those goods are transferred to the territory of Poland from another EU member state. From this separate location, taxpayer A, who stores those goods, takes them, while the ownership of those goods is transferred upon their collection.

The purpose of this procedure is to simplify VAT calculations by companies from other EU countries.

First, transportation of goods from an EU country to a consignment warehouse in Poland does not trigger the obligation to register for VAT purposes.

Additionally, the supplier does not recognize the intra-Community acquisition in Poland, nor is he obliged to report the domestic delivery upon collection of goods from the consignment warehouse. Rather, upon the collection of the goods from the consignment warehouse, the supplier shows a VAT-able transaction only in the EU country from which those goods are moved to Poland.

Despite these undoubted benefits, consignment warehouses are not widely used in Poland today. This is a consequence of restrictive provisions and the way they are interpreted by the tax authorities.

As an example, tax authorities demand that goods stored in a consignment warehouse must be designated either for production purposes or be used for carrying out services. Thus, those goods cannot be moved to Poland for commercial purposes with an intention of selling them to an unspecified contractor.

Also, a consignment warehouse must be individualized, which, in the tax authority’s opinion, means that it can be used only by one supplier and one recipient of goods. Furthermore, such a warehouse should be located in a separate building or constitute a physically separated part of a larger warehouse, at least.

Planned Changes

The amendment provision replacing the consignment warehouse with a call-off stock procedure will come into force from January 1, 2020.

The benefit of using the procedure will not change. As before, it will allow taxpayers from other EU countries not to report a VAT-able transaction in Poland in connection to the movement of goods into the warehouse and their subsequent sales.

Consequently, no obligation to register for VAT purposes in Poland will arise for entities from other EU countries. Furthermore, the moment when the foreign taxpayer is reporting a VAT-able transaction in the EU country from which those goods are moved to Poland is postponed until the goods are picked up from the warehouse.

Most importantly, the “consignment warehouse” definition—whose restrictiveness cuts down the possibility of wide application of facilitation in VAT settlement—will be removed from the VAT Act and no new definition will replace it. Moreover, the EU Law does not provide a definition either.

In the author’s opinion, the lack of a consignment warehouse definition means that the tax administration must move away from the current practice which understands the concept of a consignment warehouse very literally, i.e. as a physical place.

Instead, such a warehouse should be understood not so much as something physically tangible, but rather as a specific VAT computation procedure. Thus, a separate building or a physically separated part of a larger warehouse will no longer be mandatory to apply for a call-off stock procedure.

Also, other conditions are going to be loosened. In particular, it will be possible to use one single consignment warehouse for the purposes of multiple suppliers. Furthermore, a consignment warehouse may also be used for selling purposes by the entity running the warehouse and not only for storing materials used for production or providing the services.


As the call-off stock simplification can potentially be used for a tax fraud, the new provisions will be accompanied by appropriate recording obligations and other restrictions.

First, all the goods moved to consignment stock must leave it no later than within 12 months. If not, the supplier of goods is obligated to recognize the intra-Community acquisition in Poland and accordingly the intra-Community supply in the other EU member state. As a result, the supplier has to register for VAT purposes. This sanction will also apply if the goods moved to a consignment warehouse are stolen, destroyed, lost, or the procedure is violated otherwise.

Furthermore, taxpayers shall pass a certain notification to the tax authorities within 14 days from the first day when goods are moved to the warehouse. They are also obligated to procure monthly returns in respect of goods moved to the warehouse and send them to the competent tax office in an electronic format. Also, it is necessary to keep a detailed register of goods moved to the warehouse.

Planning Points

When the new call-off stock procedure is implemented, multinationals should reconsider their VAT calculations in Poland.

Those few who use the current consignment warehouse procedure should review their agreements regulating mutual cooperation with the Polish entity operating the warehouse and align them with the new provisions. Introducing some change, particularly in respect of recording obligations, is likely to be unavoidable.

On the other hand, those who were previously deterred from running such a warehouse in Poland due to the difficulty in meeting the formal conditions, may look at whether to implement the new call-off stock procedure. This may be even more effective because the planned changes will be applied across the EU. Thus, the VAT classification of transactions carried out through the warehouse should be the same in other EU countries.

Piotr Wyrwa is a Tax Supervisor at RSM Poland.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.