Fixed Establishment in Poland – new judgment of the Supreme Administrative Court

On February 26, 2020, the Supreme Administrative Court (SAC) issued a significant judgment, ref. I FSK 1313/17 to Voss Fluid GmbH seated in Germany regarding the Fixed Establishment (FE) existence of the German company which has commissioned the production on entrusted materials to Polish contractors.


The German company operates in the mechanical engineering sector as a supplier of hydraulic connection technology. In 2014, the company signed a cooperation agreement with a Polish production entity that belongs to the Voss FluidGroup. Under the concluded contract the German company supplies the materials and other necessary equipment to the Polish related entity that provides refining services for the delivered goods. The scope of these services includes assembly of components, storage of goods supplied by the German company, and finished goods.

The German company hires one employee that is in charge of customer acquisition, market analysis, representation at the fairs. The employee acts as a sales manager. However, all strategic decisions are made by the management board in Germany at the company’s headquarter.

The company has neither permanent technical facilities nor infrastructure.

The company does not possess the warehouse in the territory of Poland.

Judgement of the Supreme Administrative Court

The SAC acknowledged that the company had its permanent place of business in Poland, dismissing the company’s cassation appeal. The SAC agreed with the verdict of the Voivodship Administrative Court, guided by the following criteria:

  • the agreement signed between parties is concluded for an indefinite time, which confirms an element of permanence;
  • the sufficient human and technical resources can belong to the Polish production company; the court emphasized that the entity possessing the warehouse space as well as human and technical resources in Poland is a Polish production company being a part of the group is irrelevant;
  • the Polish entity that provides the refining services is a related entity to the German company; it means that the arranged structure of the company’s activity indicates that the entity possessing such a place intends to conduct operations from this place permanently;
  • the business structure in Poland enables the German entity to receive and use the services for its purposes.

In the court’s opinion, all the above factors confirm having the FE by the German company and allow carrying out the economic activity in a continuous and lasting way.

The SAC will issue a written justification for the judgment in the following months.

Anna Szafraniec
CEE VAT Compliance Manager

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