As covered in our article “Checking activities in Poland – key areas of focus and consequences”, verification activities are the main form of operational oversight for taxpayers in Poland, offering a less formalized process than full tax audits. Polish tax regulations neither require a formal document to conclude these checks nor specify a timeline for their completion. Generally, these activities begin with a letter or an email, often tied to a VAT refund application or when the tax authority’s verification system identifies discrepancies between seller and buyer declarations.

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Should a taxpayer be afraid of VAT verification activities?

As a rule, there is no need to be afraid of the letter or e-mail notifying about the verification activities. They are often a routine part of operating as a VAT-registered business in Poland.

They tend to occur in specific scenarios, such as when a company submits a VAT refund request (especially for the first time in a year) or if the tax office’s systems detect data inconsistencies between transaction parties (for instance, discrepancies in sales and purchase records). These activities provide the tax authorities with a quick way to clarify doubts. Therefore, to close the process quickly, it is worth to respond proactively.

Timing and extension

Verification activities are often initiated just before the VAT refund deadline, prompting authorities to set short response times (e.g., 3 working days). However, it’s generally possible to obtain extensions. Note that the duration of verification activities can delay the VAT refund.

Key focus areas

Based on our experiences, following aspect are usually verified when VAT settlements are subject to checking activities:

  • tax point / moment of VAT deduction: Authorities often check whether VAT data have been declared in the correct reporting period. Polish rules are quite complicated and restrictively checked by tax authorities. A review of the alignment of transaction dates, such as delivery and payment dates, with invoice issuance to ensure the precise recording of liabilities is a standard;
  • foreign currency transaction: For transactions in foreign currencies, authorities assess whether the currency conversion to Polish zlotys follows the correct exchange rates and timing standards in line with Polish regulations;
  • credit / debit notes: Corrective invoices and related adjustments are closely scrutinized. Authorities may inquire if these adjustments are reflected accurately in reports, verifying the conditions and timing, and might request additional documentation, such as agreements or adjustment confirmations (significant and complicated rules, especially on the purchaser’s side were introduced few years ago in Poland).
  • underlying documents: 0% VAT rate or intangible service – that are typical transactions for which additional documentation confirming taxpayer’s benefits are needed;
  • bad debt relief (on supplier’s and purchaser’s side): Where bad debt relief have been claimed by the supplier, tax officers will examine whether the documentation meets statutory requirements, often requiring precise evidence to confirm eligibility. The purchaser is verified whether all needed payments were made within 90 days from the payment deadline. More data on the relief you may find in the following article: more on “Bad debt relief in Polish VAT – 90 days without payment”;
  • nature of the transactions: Properly classifying transactions is crucial to VAT compliance. Authorities assess how the economic substance of the transaction aligns with Polish VAT regulations, focusing on the timing of tax obligations and classification nuances;
  • transactions with related parties: Polish tax authorities emphasize the economic substance of transactions. They may assess whether transactions have genuine economic rationale, especially for dealings with related parties. It’s crucial to understand the importance of documenting the rationale behind transactions and being prepared to demonstrate that activities are not intended for tax avoidance.

Typical document requests

During verification activities, tax authorities often request the following documents, generally submitted via email:

  • copies of purchase and/or sales invoices and confirmation of their payment;
  • contracts, orders, confirmations of services rendered;
  • additional documents such as CMR, IE-599;
  • a description of the taxpayer's operations;
  • information on owned or leased offices or/and warehouses;
  • statements on the number of employees, sources of financing, absence of overdue liabilities;
  • tax ruling covering the transaction (especially when purchase of real estate took place).

Statements should be signed by the taxpayer’s representatives or a proxy, with electronic signatures permitted. For documents in foreign languages, especially contracts, translation into Polish may be necessary.

Tips for document preparation

Preparation is key to streamlining verification activities. Having a well-organized set of documents ready can significantly reduce response times and demonstrate compliance. To ensure efficient responses, businesses should:

  • keep all VAT-relevant documentation well-organized by transaction, such as purchase orders, invoices, and payment confirmations;
  • format documents clearly, marking important dates and reference numbers;
  • regularly audit records for completeness and accuracy to avoid scrambling for documents when verification activities begin.

Investing time in thorough documentation practices not only speeds up the verification process but also reduces the risk of further scrutiny from tax authorities.