SME scheme: VAT exemption in another EU country

Since 1 January 2025 a business established in Poland can be exempt from VAT in another EU country if its annual turnover across the whole EU doesn't exceed EUR 100,000 in either the previous or the current year. You file an SME-P notification in e-Urząd Skarbowy (the tax office's online portal), receive a PL[NIP]-EX number and report your turnover every quarter on form SME-IK. Your invoices to Polish businesses still go to KSeF (Krajowy System e-Faktur, Poland's National e-Invoicing System).

Legal position as of 26 October 2026.

VAT Act, art. 113b (Dz.U. 2026 item 1263)

Do you need the SME scheme at all?

Often not. The SME scheme only helps once a sale is taxed in another country and you would otherwise pay VAT there. Electronic services to private customers in other EU countries and distance sales of goods to them (WSTO, wewnątrzwspólnotowa sprzedaż towarów na odległość) stay taxed in Poland as long as their combined value doesn't exceed PLN 42,000 in either the current or the previous year (art. 22a ust. 1 pkt 3 and art. 28k ust. 2 pkt 3 of the VAT Act). In that case the Polish exemption under art. 113 (the small business exemption) is enough.

The Ministry of Finance (MF) confirms in its SME Q&A that the scheme doesn't change the place-of-supply rules. Once you exceed PLN 42,000 (or earlier, if you opt for it), the sale is taxed in the customer's country, and only then do you choose: VAT at that country's rates settled through OSS, or an exemption under SME if that country offers one. You can also combine the two: SME in some countries, OSS in the rest.

Example: Ania is a graphic designer using the art. 113 exemption who sells downloadable templates to private customers in Germany and Czechia. Up to PLN 42,000 a year she treats them as domestic sales. When her foreign sales reach PLN 60,000 in 2026, they are taxed in the customers' countries. Ania can be exempt there through SME, as long as she meets the conditions of each of those countries.

What limits apply in the SME scheme?

There are two limits and you have to meet both.

• EU limit: EUR 100,000. You count the total annual value of supplies of goods and services taxed in the EU, excluding VAT, including sales in Poland and in countries where you don't use the exemption (art. 113a ust. 1 pkt 1, art. 113b ust. 1). MF adds that services on which the foreign buyer accounts for VAT also count. You convert amounts to euro at the European Central Bank rate from the first day of the year.
• National limit of the exemption country. Each country sets its own threshold, but according to MF no higher than EUR 85,000. Countries may also set different thresholds by sector, exclude certain services, and decide whether the exemption continues until the end of the year after the threshold is exceeded.

The European Commission publishes each country's rules, and MF refers to its website rather than duplicating them. As of 1 January 2025 Spain did not offer an exemption under SME.

podatki.gov.pl: SME, information for Polish taxpayers

You don't have to use the exemption in Poland to use SME abroad. MF states plainly that an active VAT taxpayer in Poland can also be exempt in another country if they stay under EUR 100,000.

How do you register for the SME scheme?

Everything goes through e-Urząd Skarbowy, because the act provides no other route (art. 113b ust. 18). Cases are handled by the Naczelnik Drugiego Urzędu Skarbowego Warszawa-Śródmieście (head of the Second Tax Office Warszawa-Śródmieście), regardless of where you settle your other VAT (art. 3 ust. 3 pkt 2 lit. e).

1. If you use the art. 113 exemption and aren't VAT-registered, you first file VAT-R as a "VAT-exempt taxpayer" (podatnik VAT zwolniony, art. 96 ust. 3c).
2. You file the prior notification SME-P (in e-US: "Deklaracje", "Złóż e-Deklarację", tile "Procedura SME"). In it you list the countries where you want to be exempt and your EU turnover for the previous and current year broken down by country, including Poland. Some countries also require turnover from two years back.
3. The tax office has 35 business days, counting from the day after it receives the notification, and can extend that period if it needs to check something further (art. 113b ust. 4).
4. You receive a number in the format PL[NIP]-EX, the same in every country. Your customer can check it in the European Commission's "SME on the Web" service.

The exemption applies from the day the tax office informs you that the EX number has been assigned or confirmed. Until then you settle foreign sales under the existing rules. So Ania, if she exceeds PLN 42,000 in October, can't claim the exemption retroactively for the weeks she spends waiting for the number.

podatki.gov.pl: SME-P and SME-IK forms in e-Urząd Skarbowy

If the tax office finds that your EU turnover exceeded EUR 100,000, it issues a decision (postanowienie) refusing the number. If you don't meet the conditions of one country, the refusal covers only that country. You can appeal the decision within 7 days of its delivery.

What do you file every quarter?

You file the quarterly report SME-IK within a month of the end of the quarter, even when the last day falls on a Saturday or a public holiday (art. 113b ust. 14). For the third quarter of 2026 the deadline is 31 October 2026, even though that's a Saturday. The report shows your turnover in each EU country for the quarter, in euro and unrounded, including sales in Poland.

MF's answers contain details that are easy to miss:

• you file the report even when there were no sales in the quarter (a nil report) and while your business is suspended;
• you fix an error by correcting the report for the quarter it concerns, not in the next report;
• if you received the EX number in a later quarter than the one you registered in, you file the overdue reports from the registration quarter together with your first report (art. 113b ust. 16).

An accountant can file SME forms for you with a general power of attorney PPO-1 or a specific one, PPS-1EU. To sign SME-IK they also need UPL-1, but the one you have already filed is enough.

What happens once you exceed EUR 100,000?

Within 15 business days of the day you exceed it, you file a quarterly report for the period from the start of the quarter to that day (art. 113b ust. 17). The tax office promptly deactivates the EX number by a decision that is immediately enforceable (ust. 12). From then on you settle sales in other countries under their rules, e.g. through OSS. The tax office also deactivates the number when you no longer meet the conditions in any country or close your business.

If you only exceed one country's national threshold, that country's rules decide, and the tax office tells you in which country the exemption no longer covers you.

You can also opt out of the exemption, in one country or in all of them. Opting out takes effect from the first month of the next quarter if you notify it in the first or second month of a quarter, and from the second month of the next quarter if you notify it in the last month (art. 113b ust. 10).

Do invoices under the SME scheme go to KSeF?

That depends on who sells and where.

Your domestic invoices go to KSeF as before. Art. 106ga ust. 2 of the VAT Act doesn't exclude Polish taxpayers using SME from KSeF. You issue an invoice to a Polish business in KSeF on the same terms as anyone exempt from VAT, with the PLN 10,000 monthly limit until the end of 2026. Invoices to private individuals don't have to be issued in KSeF.

Sales exempt abroad most likely fall outside the Polish invoicing rules. That is our reading of art. 106a: it covers sales taxed in Poland and, of transactions taxed in another EU country, only those where the buyer accounts for VAT. Selling templates to private customers in Germany belongs to neither group. MF hasn't addressed this directly, either on its SME pages or in its KSeF Q&A. With private customers KSeF doesn't apply to you anyway, because you don't have to issue their invoices there (art. 106ga ust. 2 pkt 4). Which documents to issue in the exemption country is decided by that country's rules.

The exclusion in art. 106ga ust. 2 pkt 6 concerns foreign businesses. It covers a taxpayer established in another EU country who uses the exemption in Poland under art. 113a. Such a business doesn't issue invoices in KSeF, only in electronic or paper form (art. 106ga ust. 3).

VAT Act, art. 106a, 106ga and 106gb

How does it work the other way, when an EU business is exempt in Poland?

A business from another EU country can be exempt from VAT in Poland if its EU turnover doesn't exceed EUR 100,000 and its sales in Poland stay within the art. 113 ust. 1 limit, which from 2026 is PLN 240,000 (art. 113a ust. 1). It registers in its own country and receives the EX number there. The competent Polish office is the Naczelnik Urzędu Skarbowego Łódź-Śródmieście. MF's page for such businesses still gives a limit of PLN 200,000, but the act refers to the current amount in art. 113.

When you sell to such a business, you issue the invoice in KSeF and put its EX number on it (art. 106e ust. 1 pkt 27). You deliver it to the buyer in the agreed way, e.g. as a PDF, because they can't receive it in KSeF (art. 106gb ust. 4 pkt 4). More on invoices for customers outside Poland in our post on foreign invoices in KSeF.

How does SME differ from the art. 113 exemption?

When an invoice for a private customer in Poland can stay outside KSeF is covered in our post on invoices for private individuals.