Set up Polish taxes in your Shopify store

The most important difference when it comes to charging VAT is whether your business is VAT-registered or not. We covered this topic in our Shopify VAT guide for selling to EU customers.

In Poland, you are required to register for VAT if your taxable turnover in any 12-month rolling period is more than PLN 200,000. You can also voluntarily register for VAT at any point.

For more information on how to register with the Polish tax authorities please see Registering for VAT on Poland’s Tax portal.

If your business is VAT-registered and you want to sell to both consumers (B2C) and business customers (B2B) in different countries of the EU, you will need to set up your tax settings and tax rates properly.

• Tax settings
• Tax rates in Poland and the EU
  • Selling physical goods to customers in Poland
  • Selling physical goods to customers in other EU countries
    • Selling within the "micro-business" threshold
    • Surpassing the "micro-business" threshold
    • Country-specific registration
  • Selling digital goods

If you want to charge VAT to some customers and not to others, you may choose from two settings, depending on how you want to display product prices in your Shopify store.

If you are selling predominantly to consumers (B2C), you may prefer to display product prices as including VAT.

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Decide how tax is charged section, check the Include tax in prices checkbox.
3. Click Save to apply the changes.
4. Go to the Settings → Markets → Preferences page and switch the Include or exclude tax based on your customer's country toggle on.

In case your customers are mostly businesses (B2B), you can choose to have your product prices displayed as excluding VAT.

To display your product prices excluding VAT:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Decide how tax is charged section, uncheck the Include tax in prices checkbox.
3. Click Save to apply the changes.
4. Go to the Settings → Markets → Preferences page and switch the Include or exclude tax based on your customer's country toggle off.

As of November 2023, the standard rate of VAT in Poland is 23%. There are also reduced rates of 8%, 5% and 0%.

The 8% rate applies to goods such as certain food products, newspapers, and healthcare products. The 5% rate applies to goods such as children’s products, hygiene products and printed books. The 0% rate applies to goods and services such as the supply of certain computer hardware and exports.

In Poland, you need to charge different tax rates depending on whether you are selling to businesses (B2B) or to consumers (B2C) to customers in Poland, in other EU countries, and to countries outside of the EU.

For more information on VAT rates in Poland, see the official Polish Tax portal.

When selling physical goods to customers in Poland, you should always charge Polish VAT. These rules apply to all customers, including those who are VAT registered and those who are not VAT registered.

You should charge VAT at the standard rate of 23%, unless the good falls within the specific items listed under the reduced rates of 8%, 5%, and 0%.

If you are selling to VAT-registered customers (B2B) in the other EU countries, you should not charge VAT. Shopify calculates the tax rate automatically based on the type of registration set in your tax settings.

When selling to non-VAT registered customers (B2C) outside of Poland but still within the EU, you do charge VAT. The VAT rate you charge will depend on whether you breach the “micro-business” threshold of €10,000 (excluding VAT).

If your taxable turnover during the last twelve months outside Poland but still within the EU is below the threshold of €10,000 (excluding VAT), you should charge Polish VAT to all non-VAT registered customers (B2C) in the EU.

To use the "micro-business" taxation scheme, you need to apply for the "micro-business" exemption at your local tax authority. You will use just one VAT registration within the EU.

Then, you can set up your tax settings in your Shopify admin. This task only needs to be performed once.

To set VAT rates for the "micro-business" exemption scheme and charge your home country's VAT rates on all orders:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Countries/regions section, click on European Union.
3. In the Shipping within the EU section, click on Collect VAT.
4. In the Collect VAT window, select the Micro-business exemption option and click Next.
5. Select your Registration country and enter your VAT number. Leave this field blank if you have applied for a VAT registration number but don't have one yet. You can update it later when you receive it.
6. Save your changes by clicking on the Collect VAT button.

When your taxable turnover in the past twelve months to non-VAT registered customers (B2C) outside of Poland, yet still within the EU, exceeds €10,000 (excluding VAT), you must register for VAT in each of the countries you are selling to and pay the VAT there.

This means that customers from different EU countries should be charged with different VAT rates, varying from 16% to 27%.

For example, if your business is located in Poland, and you sell goods to consumers in Belgium and Germany, and your total sales to Belgium and Germany are below the €10,000 threshold, then you charge the Polish VAT rate of 23%.

However, if your total sales in Belgium exceed the threshold of €10,000, then you must register for VAT in both Belgium and Germany and charge Belgium VAT at 21% on goods sold in Belgium and German VAT at 19% on goods sold in Germany.

When breaching the threshold, registering for VAT in each EU country can become time-consuming and complicated. In this case, you can choose to use the One-Stop Shop (OSS) Union scheme.

This allows you to still charge VAT at the rate of the country where you are selling, but you only have to report on one OSS VAT return.

To charge your Belgium and German customers with the correct VAT rate, you need to set your tax settings accordingly. Shopify gives you the option to select OSS as your VAT registration type, allowing you to charge correct VAT rates automatically.

To set VAT rates for the OSS scheme and charge your customers' shipping country VAT rates on all orders:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Countries/regions section, click on European Union.
3. In the Shipping within the EU section, click on Collect VAT.
4. In the Collect VAT window, select the One-Stop Shop registration option and click on Next.
5. Select your Registration country and enter your VAT number. If you have applied for a VAT registration number but don't have one yet, leave this field blank. You can update it later when you receive it.
6. Save your changes by clicking on the Collect VAT button.

Now, your customers' shipping country VAT rates automatically apply to all EU sales.

Some businesses may decide to continue to hold tax registration for each EU country they ship to. If that is your case, in Shopify, you are able to add a local VAT registration number for a different country, which allows you to charge the correct VAT rates. Shopify will then automatically apply VAT rates based on your VAT registration.

To add the local VAT registration number:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Countries/regions section, click on European Union.
3. In the Shipping within the EU section, click on Collect VAT.
4. In the Collect VAT window, select the Country-specific registration option and click on Next.
5. Select Country and enter your VAT number. If you have applied for a VAT registration number but don't have one yet, leave this field blank. You can update it later when you receive it.
6. Save your changes by clicking on the Collect VAT button.
7. To add the local VAT registration number for every country you are registered in click on the Add country option and confirm the selection by clicking on the Add country button.

If you are not able to select the additional country you are VAT-registered in, you may need to create a shipping zone first.

To create a shipping zone:

1. In your Shopify admin, go to the Settings → Shipping and delivery page.
2. In the Shipping section, click Manage rates → Create shipping zone.
3. Type in the name of the shipping zone, add the country (or countries) you are VAT-registered in using the search bar, and when finished, click Done.
4. To make this zone available, add the shipping rates.
5. Save your changes.

Goods sold from your Shopify store in Poland to customers in non-EU countries are exempt from VAT.

There are special rules for selling digital goods from Poland to other EU countries. But firstly, it is critical to understand what exactly digital services are.

Digital goods or services include radio and television broadcasting services, telecommunication services, and electronically supplied services, such as online magazines, music, films, and games.

Even though a company uses the internet to facilitate trading, this does not always mean that they provide e-services. For example, the sale of goods where the order and processing are done electronically (such as through a Shopify store) is not a supply of digital services. This is regarded as a sale of goods and follows the usual VAT rules set out above.

If you are making supplies of digital services from Poland to other EU countries or to UK consumers, there is no registration threshold (such as the exemption for micro-businesses of €10,000).

Therefore, if you are selling to non-VAT registered customers (B2C), you must register for VAT in that country and charge its VAT rate. This means that customers from different EU countries should be charged with different VAT rates, varying from 16% to 27%.

If you are selling digital goods to VAT-registered businesses (B2B), then they are responsible for any VAT due to the tax authorities in their country.

Having to register for VAT in multiple countries can be quite time-consuming. Shopify store owners in Poland selling to other countries in the EU (excluding Northern Ireland) can register for VAT One Stop Shop (OSS). The OSS scheme allows businesses to report the VAT due on services in their own Member State via a web portal.

To learn more, please see this article to find out how to set up EU taxes for selling digital goods.

Once you set your tax rates correctly in your store, Sufio will automatically create valid invoices with an exact breakdown of the charged VAT.

Invoices can be created in multiple languages and include all the necessary details to make them compliant with invoicing legislation in the EU.

Issuing invoices with the correct tax breakdown is crucial for your bookkeeping and tax purposes.

If you are selling to businesses (B2B), Sufio invoices include all the required information, as well as the VAT registration number for your Shopify store and your business.

Last updated on December 4, 2023.