POLAND: A bonus for reaching the fixed level of sales is not subject to value added tax (VAT).



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The question about the documentation of a bonus for reaching the sale’s or turnover’s level fixed under the contract seems to be unsolved in spite of the consequent jurisdiction line of the administrative courts in Poland. An appointed distributor, who reaches a level of sales entitling to bonus stated in the contract, has to decide whether there is a duty to fulfill VAT (Value Added Tax) obligation. The consequence of this decision is the issuing of VAT invoice (in case of a duty to fulfill VAT obligation) or an account note (if a distributor decides that reaching the bonus is not subject to VAT).

The newest judgment quoted above, passed by the Warsaw Administrative Court, confirms hitherto binding jurisdiction line. In 2008 the court passed the following judgments on this subject: on the 6th of February, 2008 (case number: III SA/Wa 1967/2007) the court noted: „A bonus is a result of the already taxed purchase. Acquirement of a right to bonus is no separate service which would be subject to value added tax. The consequence of such acceptance would be double taxation.’; on the 3rd of October, 2008 (case number: III SA/Wa 1056/2008) the following decision was taken: „Should the company receive from their contractors a monetary premium for reaching the sales level regulated by the contract, this activity would not be subject to VAT, as if it was a payable service. A situation, in which VAT is imposed on the sales twice: firstly – as a goods delivery and secondly – as a service for the purposes of the article 8 paragraph 1 of the VAT law, is unacceptable.’ Also on the 1st of December, 2008 (case number: III SA/Wa 1859/2008) the court passed the judgment: „The fact that the buyer purchases from the seller a fixed goods amount does not signify that he renders a service in favour of the seller. No VAT invoice should be issued.’

The Supreme Administrative Court passed a judgment on the 6th of February, 2007 (case number: I FSK 94/2006) which follows: „The monetary premiums which are paid because of reaching the definite value or number of the purchases in the fixed time are connected with no additional service. A proper fulfillment of the contractor’s duty in the field of documentation is preparing the account note and calculation of the achieved premium as an income which is not subject to value added tax.’

Nevertheless, the practice of the tax authorities in Poland is not unequivocal. The Minister of Finance kept his earlier interpretation of the tax regulations, according to which the premium would be connected with definite activities of the buyer and would be subject to 22% value added tax. A result of such view would be the duty to issue the VAT invoice (A Notice by the Minister of Finance from December 28th, 2007 – answer to a representative’s interpellation number 99 (PT3/0602/34/599/LBE/07/MB7-16001). Notwithstanding, some tax authorities follow the jurisdiction of the administrative courts and are of the opinion that the bonuses are connected with no value added tax and should be documented as those in account note.

The most secure solution seems to be a motion for the individual interpretation of the tax regulations which can be applied to the suitable, considering the seat of the distributor, tax office (article 146 § 7 of the Tax Ordinance).




Olga Sztejnert, IDI country expert for Poland.



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