This article discusses which VAT WSTO, VAT OSS, VAT IOSS, or VAT SME procedures to choose when selling goods and providing services remotely to a buyer in another EU country, and the conditions for calculating and paying VAT.

E-commerce, including remote sales through platforms, marketplaces, and online shipping services such as Amazon, Allegro, Aliexpress, Alibaba, eBay, eMag, Erli, Olx, Temu, and Vinted, can be conducted in Poland using VAT WSTO, OSS, and SEM procedures, simplifying the collection and payment of Value Added Tax (VAT) for entrepreneurs, while also minimizing its amount.

Both sales and purchases of goods through platforms, marketplaces, and online shipping services such as Amazon, Allegro, Aliexpress, Alibaba, eBay, eMag, Erli, Olx, Temu, and Vinted are increasingly replacing traditional channels in brick-and-mortar stores and shopping malls. Online product offerings are not limited to local markets and allow for the sale and purchase of a virtually unlimited range of products and goods on the global e-commerce network.

When selling goods via e-commerce, Polish companies and entrepreneurs have access to a number of VAT procedures that are harmonized with European legislation and optimize the amount and payment of this tax, especially for small businesses.

Distance selling of goods within the EU, or wewnątrzwspólnotowa sprzedaż towarów na odległość WSTO, involves the seller delivering the goods to the consumer, the buyer.

Both the seller and the buyer are registered in an EU country. Using this WSTO procedure allows Polish taxpayers to avoid registering for VAT in the EU Member State where the supply is taxed. Instead, they are entitled to declare and pay VAT payable in connection with e-commerce in Poland.

For a sale of goods to qualify for the WSTO procedure, four conditions must be met, as per Article 2 section 22a of the VAT Act:

1. The shipment or transport of the goods sold is carried out by the seller (supplier) or a third party on its behalf.

2. The shipment or transport begins in one EU country and ends in another EU country.

3. The subject of the sale is not new vehicles or goods requiring installation or assembly, with or without a test run.

4. The buyer is:

• a VAT payer or a legal entity that is not a VAT payer and is not liable to pay VAT when purchasing goods within EU (WNT) or outside the EU, or
• a natural person not engaged in business activity.

In short, WSTO is the distance sale of goods by a seller in Poland to buyers – private individuals – in another EU country.

Particular attention is paid to the delivery of goods, which must be confirmed by documents from postal, courier, transport and forwarding companies, be paid for and represent the buyer’s order to the seller on the basis of paragraphs 8 and 9 of Article 22a of the VAT Law.

Since the place of supply of goods is considered the place of receipt or completion of dispatch or transport to the buyer, for the convenience of e-commerce sellers, sales under the WSTO procedure are considered domestic sales and are subject to VAT in Poland. To benefit from this benefit, a Polish seller must be eligible for VAT refunds in accordance with Article 22a section 1 of the VAT Act:

• the seller has its registered office or residence in Poland,
• the goods are dispatched or transported from Poland to an EU country,
• the total value of supplies of goods dispatched or transported to other EU countries did not exceed EUR 10,000 during the tax year or in the previous tax year.

Therefore, a limit of EUR 10,000, or approximately PLN 42,000, applies to the use of this mechanism.

How beneficial is the VAT WSTO procedure for Polish taxpayers, allowing distance selling at the Polish VAT rate of 23% within the established limit? In our opinion, it is necessary to compare VAT rates (on standard goods) in other EU countries where sellers sell via e-commerce. Our article on VAT rates in EU countries allows for such a comparison.

Thus, a Polish seller can choose VAT taxation options for e-commerce:

• register for VAT in other EU countries, file VAT returns there, and pay VAT in those countries,
• use the VAT procedure under the WSTO up to the established net sales limit of €10,000.

If a Polish seller exceeds the established sales limit of €10,000 or wishes to apply VAT rates in the country or EU countries where they sell goods before reaching this limit, another VAT procedure is VAT OSS or VAT One-Stop-Shop. However, the Polish taxpayer is not required to register for VAT in every EU country where sales take place. This VAT application procedure is also pan-European. VAT OSS applies to the sale of goods and to digital, telecommunications, transport and vehicle rental services, hotel accommodation, arts services, and the organization of fairs.

The VAT OSS procedure stipulates that Polish taxpayers pay VAT under the STO (sprzedaż towarów na odległość) in EU Member States through their Member State of identification. For Polish taxpayers, the Member State of identification is Poland.

To declare such registration under the VAT OSS, a Polish company or entrepreneur must submit Form VIU-R to the Head of the Second Tax Office in Warsaw-Śródmieście. This authority identifies the taxpayer for the EU procedure and confirms the application.

A taxpayer registering for the EU OSS procedure uses their taxpayer identification number (NIP) and does not receive a tax identification number in the country or EU countries where the e-commerce sales actually take place.

In accordance with Articles 130a–130d of the VAT Act, the requirements for using the VAT OSS procedure for e-commerce stipulate that:

1. Goods and services are sold to natural persons as purchasers.

2. Taxable persons are legal entities, organisational units without legal personality, and natural persons who carry out distance selling or facilitate the supply of goods within the EU or are established in the EU but are not established in the Member State of consumption or supply of services.

3. Member State of consumption means the Member State in which the dispatch or transport of goods to the purchaser is completed or in whose territory the supply of services takes place.

4. Member State of identification means the Member State in which the taxable person has its registered office or permanent establishment within the EU.

5. Union scheme means the payment of VAT payable on the sale of goods and the supply of services to the Member State of consumption through the Member State of identification. The Union scheme applies to all supplies of goods or services covered by the scheme made by the taxpayer within the EU.

If the conditions for registration for the EU OSS procedure are met, the Polish taxpayer receives confirmation of such registration electronically to the email address specified in the registration application. Registration takes effect on the first day of the calendar quarter following the quarter in which the taxpayer submitted the registration application.

Under the VAT OSS procedure, the Polish taxpayer makes quarterly VAT payments using the VIU-DO declaration for all Member States where their goods are sold remotely. The return is submitted by the 20th day of the month following the end of the quarter. The tax is paid in euros to a special account with the KAS (State Tax Office).

VAT accounting under the OSS procedure must be maintained according to the following parameters:

• date of sale
• country of purchaser
• VAT rate
• VAT amount
• currency
• order and accounting document number.

Accounting records under the OSS procedure must be kept for at least 10 years.

To simplify the management of transactions subject to the OSS, it's convenient to integrate your e-commerce platform with a modern accounting or ERP system.

It's worth noting that the VAT OSS procedure is intended for both active VAT payers and those enjoying an exemption. Using this procedure does not affect the right to a subjective VAT exemption, as sales to EU consumers under the VAT OSS procedure do not count toward the sales limit for subjective VAT exemption (currently PLN 200,000 per year).

For distance selling of goods within the EU that were previously imported from outside the EU, a similar VAT procedure, the VAT IOSS Import One-Stop-Shop, applies. IOSS is a portal that allows you to process and report all VAT obligations related to imported goods. The system provides a single point of contact for imported goods (from outside the European Economic Area) with a total value of up to €150.

Distance selling of imported goods refers to online trading situations where the seller purchases goods in a third country (e.g., China) and then sells them to an EU member state.

To begin using the Import One Stop Shop system, the registration is needed.

The IOSS aims to prevent tax authorities from charging VAT twice for the same goods (imported from outside the EU and sold in Member States).

To qualify for the VAT IOSS procedure under Article 138a paragraph 2 of the VAT Act, the goods sold:

• must be located in a third country outside the EU or the European Economic Area at the time of sale,
• must have an actual value (per consignment) of no more than €150,
• are not subject to mandatory excise duty,
• will subsequently be delivered to a consumer within the EU. For example, if goods are imported from China, they can be reported via IOSS if they are subsequently sold to retail customers.

IOSS is a pan-European system and is valid for all EU countries. This simplifies the sale of imported goods and the filing of VAT returns related to non-EU goods in a single location and ensures that VAT payers only deal with one tax office – the country where their IOSS account is registered.

The IOSS procedure is voluntary and serves as an alternative to filing a VAT return on imported goods.

We previously wrote about the new VAT taxation procedure for e-commerce, or VAT SME Small Medium-Sized Enterprise, from 2025 in VAT SME Small Medium-sized Enterprise мы уже писали our article.

The SME procedure allows for VAT exemption in EU countries other than the Polish entrepreneur's registered office.

The VAT SME procedure is available to companies and entrepreneurs in the EU who, in accordance with Articles 113a and 113b of the VAT Act:

• did not exceed EUR 100,000 in aggregate turnover in all Member States (including Poland) in the current and previous tax year,
• do not sell goods or provide services requiring mandatory VAT registration in a given country,
• their actual cost (per batch) should not exceed 150 euros,
• do not exceed the VAT exemption thresholds established by a given country,
• meet the conditions for VAT exemption in a given country.

The EU-wide turnover limit of EUR 100,000 consists of:

• a national VAT exemption limit in Poland of PLN 200,000,
• national VAT exemption limits in all EU countries to which the sale of goods or services enjoying the SME VAT exemption will be directed.

In 2025, the annual VAT exemption limit in Poland is PLN 200,000. For other countries, the limits are as follows:

• Germany – EUR 25,000,
• Austria – EUR 55,000,
• Slovenia – EUR 60,000,
• Estonia – EUR 40,000.

In addition, the EU country in which a Polish entrepreneur wishes to benefit from the exemption must implement the SME procedure. This is a voluntary option, so not all Member States have implemented it. A simulator for checking entrepreneur compliance with the VAT SME application conditions is available on the European portal.

The VAT SME procedure is available to Polish companies and entrepreneurs, both VAT-exempt and active VAT payers. It is worth noting that if an active Polish VAT payer chooses VAT exemption in other countries, they lose the right to deduct VAT on goods and services used in non-taxable supplies.

To benefit from the VAT exemption in other EU countries, a Polish company must register with the Second Tax Office in Warsaw-Śródmieście and submit a preliminary notification. Based on this notification and taking into account information from tax authorities in other EU Member States, the head of the Second Tax Office in Warsaw-Śródmieście decides to issue or refuse an EX identification number. The term "EX" is an abbreviation for "exemption." If a Polish company is assigned an EX number, its identification number will be in the format PL[NIP number]-EX. The validity of an EX number can be verified on the EU platform SME-on-the-web.

Entrepreneurs registered under the VAT SME procedure are required to submit quarterly information within one month of the end of the quarter. This quarterly information must include taxpayer details, the Polish taxpayer identification number (EX), and turnover in euros for the quarter in each EU Member State, including sales in Poland.

The VAT OSS and VAT SME procedures are mutually exclusive, as VAT OSS requires VAT registration, while VAT SME requires VAT exemption. However, a combination of the two is possible: a qualifying supplier may register for both VAT SME and VAT OSS, accounting for VAT payable in Member States where the former procedure does not apply.

The main differences between the VAT OSS and VAT SME procedures are summarized in the table below.

Table. Comparison of the VAT OSS and VAT SME Procedures

If you need consultation or accounting services for distance selling your goods or services to EU countries, please contact us using the contact information below.