Distance selling of goods to consumers/buyers in the EU – B2C, business to client (wewnątrzwspólnotowa sprzedaż towarów na odległość” (WSTO)) is exempt from VAT by Polish entrepreneurs in the case of delivery of such goods to the buyer’s country and within the limit of such sales up to EUR 10,000.

Distance selling of goods within the EU (wewnątrzwspólnotowa sprzedaż towarów na odległość” (WSTO)) is the supply of goods carried out by the supplier (or on his behalf) from the territory of one state to another state that is a member of the EU.

The place of supply of goods is the place where the goods are located at the time of completion of dispatch or transportation to the buyer. Therefore, VAT in the case of distance selling must be paid in the consumer’s country.

Consumers / buyers are natural or legal persons who are not required to settle VAT taxation when purchasing goods within the EU:

• farmers who are subject to a flat rate tax for their agricultural activities,
• taxpayers who only carry out activities that are not subject to taxation and who are not entitled to reduce the amount of tax payable by the amount of input tax when purchasing goods and services,
• taxpayers whose sales are exempt from tax,
• legal persons who are not taxpayers.

WSTO also covers cases of supply of goods when the supplier is indirectly involved in their shipment or transportation, for example, by entrusting the shipment or transportation of the goods to a third party – a transport (postal, courier) company that delivers the goods to the buyer.

Exceptions under WSTO:

• new vehicles,
• goods requiring installation or assembly with or without a test run,
• works of art,
• used goods.

The regulation of distance sales of goods within the EU is subject to the condition regarding their sales within the limits of 10,000 euros (approximately 42 000 zlotys) per year. This limit applies to the total volume of sales of goods and services to consumers in all EU countries.

If the value of sales to consumers in the EU exceeds the established limit, the following VAT taxation regulations are used:

• payment for sales in the EU in the same way as for domestic sales,
• voluntary registration as a VAT payer in the consumer's country, i.e. in the country where the goods are sold,
• registration in the OSS VAT system, in which settlements are made for all sales to consumers from other EU countries.

A taxpayer, which is exempt from VAT up to the sales limit of PLN 200,000 in Poland, will have to pay “foreign” VAT if the sales limit of EUR 10,000 is exceeded for consumers from EU countries. In this case, sales in Poland will be exempt from VAT, and sales to other EU countries will be reflected in OSS* or local returns.

Information on other important WSTO conditions is on the state portal and in the following article.

* To use OSS in Poland, there must be registration in Poland as a VAT payer, active or exempt.