Fiscal representative – who is it and what are his duties?

Fiscal representative – who is it and what are his duties?
Marek Cieślak

Marek Cieślak

CEO CGO Finance

Our tax system is not one of the easiest. For this reason companies are increasingly choosing to work with a fiscal representative (tax representative). Who is it? What are his responsibilities? Find details in the article below – we invite you to read!

Who is a Fiscal Representative?

A fiscal representative is someone authorized to act on behalf of a taxpayer regarding their tax obligations. Additionally, if specified in the agreement, a tax representative can perform other activities. Especially related to Value Added Tax (VAT). The following entities may act as tax representatives:

  • Accountant
  • Tax advisor
  • Another person with relevant knowledge and experience

Who Can Become a Fiscal Representative?

According to Art. 18b(1) of the VAT Act, a fiscal representative can be any entity that meets the following conditions:

  1. Has a business presence within the country (including another EU member state).
  2. Is registered as an active VAT taxpayer.
  3. Has a right to:
    • Professionally provide tax advisory services in accordance with tax advisory regulations.
    • Provide bookkeeping services according to accounting regulations.
    • Conduct business related to intermediation in trading goods within the country.
fiscal representative

Duties of a Fiscal Representative

The legislator specifies the scope of duties of a fiscal representative. While acting on behalf of and for the taxpayer for whom he has been appointed, tax representative performs tasks such as:

  1. VAT-related obligations, including:
    • Preparing tax returns and summary information.
    • Maintaining and storing documentation, including records necessary for accounting purposes.
  2. Other activities:
    • Performing other actions arising from VAT regulations, if stipulated in the agreement with the taxpayer.

How Does the Right to Act as a Fiscal Representative Arise?

The authority for a fiscal representative to act on behalf of a taxpayer starts with signing an agreement. It should include:

  • Names of the Parties. The full company names of both the taxpayer and the tax representative.
  • Address of the registered office of the parties to the agreement. In the case of a foreign taxpayer, the address of his permanent place of business in Poland.
  • Identification Data. Tax Identification Number of the parties. In the case of foreign taxpayers, their VAT identification number should also be included.
  • Activities provided for in the VAT Act;
  • Statement of Consent of a Tax Representative. A statement from the tax representative agreeing to perform duties and activities on behalf of the foreign entity in their own name and on behalf of the taxpayer.

When Does the Obligation to Appoint a Fiscal Representative Arise?

The VAT Act requires certain taxpayers to appoint a tax representative. This applies to:

  • Taxpayers who do not have a headquarters or a permanent place of business in Poland (or another EU member state).
  • Taxpayers who are not registered as active VAT payers.
fiscal representative

When Does the Optional Obligation to Appoint a Fiscal Representative Arise?

In certain situations, the appointment of a tax representative is optional. This applies when the taxpayer’s business is based in another EU member state. In such cases, appointing a representative is voluntary. Yet, it can make interactions with Polish tax authorities easier.

Liability of a Fiscal Representative

Fiscal representatives are liable for the taxpayer’s obligations incurred during their service term. They share joint and several liability with the taxpayer for these obligations. This means that tax authorities can demand the full or partial settlement of tax debts from either party.

This results from the provisions of the Civil Code on joint liability. Hence:

  • The Head of the Tax Office can pursue receivables from both parties together or from each party separately.
  • Payment of the debt by one party discharges the other from the obligation.
  • If the tax representative settles the tax debt, he can seek reimbursement from the taxpayer based on civil law provisions.

The liability begins on the date of the agreement with the tax representative. It covers tax obligations incurred from that date. The liability continues even after the termination of the agreement. Then it covers obligations incurred when the agreement was valid.

Fiscal Representative vs. Tax Attorney

A tax representative and a tax attorney are two distinct functions. They have different responsibilities and scopes of liability. The differences are presented below:

FeatureFiscal RepresentativeTax Attorney
Legal BasisVAT ActCivil Code
RightsPerforming material and technical tasks related to VAT. For example: preparing declarations, keeping records.Representing the taxpayer before tax authorities in all procedural activities. For example: filing applications, participating in audits, filing appeals.
LiabilityJoint and severe liability with the taxpayer for tax obligationsNo liability for the taxpayer’s tax obligations (acts on behalf of and for the taxpayer)
AppointmentBased on an agreement with the taxpayer. No special authorization required.Power of attorney granted in writing, with specific formal requirements. The attorney must have full legal capacity
Fiscal Representative and tax attorney
fiscal representative

VAT Refund Rules and Appointment of a Fiscal Representative

According to Art. 87(6) of the VAT Act, the refund of the excess VAT is granted to the taxpayer and transferred to his bank account. A tax representative is not authorized to receive VAT refunds on behalf of the taxpayer.

This means that even if there are such provisions in the agreement, tax authorities cannot process the payment.

Fiscal Representative – summary

The role of a tax representative is crucial. Such services can save time and reduce stress related to dealing with the tax office. Before entering into an agreement with a tax representative, it is advisable to verify his experience, qualifications, and references.

Our experts offer comprehensive legal advice on tax representatives. Contact us for more information!

FAQ – Questions and Answers about Fiscal Representatives

Who is a fiscal representative?

It is a natural or legal person, or organizational unit without legal personality, appointed by a taxpayer based outside the European Union. He is appointed to perform VAT-related duties in the name and on behalf of taxpayer.

When is it necessary to appoint a fiscal representative?

The appointment is mandatory for:
Entities not based in the EU if they supply goods or services in Poland.
Entities not based in the EU if they are engaged in intra-community acquisitions of goods.
Entities not based in the EU if they import goods into Poland.

What are the duties of a fiscal representative?

The main duties include:
Registering the taxpayer for VAT purposes.
Submitting VAT declarations and summary reports.
Keeping VAT records.
Storing documentation for VAT purposes.
Representing the taxpayer before tax authorities.
Providing the taxpayer with information on VAT-related obligations.

What liability does a fiscal representative incur?

A fiscal representative is jointly liable with the taxpayer for the tax obligations they handle. This means that tax authorities can enforce tax debts from either party or both of them together.

What are the benefits of appointing a fiscal representative?

The benefits include:
Ensuring compliance with Polish tax regulations.
Facilitating communication with Polish tax authorities.
Avoiding penalties and sanctions for VAT miscalculations.
Saving the taxpayer time and money.

How to choose a fiscal representative?

When choosing a fiscal representative, consider their:
Experience in VAT settlements.
Knowledge of Polish tax regulations.
Market reputation.
Terms of cooperation offered.

Where can I find more information about fiscal representatives?

More information can be found on the websites of:
The Ministry of Finance
The National Tax Administration
Chambers of Legal Advisors
Chambers of Tax Advisors

Featured expert

Marek Cieślak

CEO CGO Finance