With the implementation of the National e-Invoicing System (KSeF), the correct classification of the presence of foreign entities in Poland is becoming increasingly important. A key issue is determining whether a foreign company has a fixed establishment (FE) in Poland, as this status may determine whether it is required to issue invoices via KSeF.
In its tax explanations dated 28 January 2026, the Polish Ministry of Finance explicitly linked the concept of a fixed establishment with e-invoicing obligations, significantly changing the perspective of many international groups.
What is a fixed establishment (FE)?
According to established case law of the Court of Justice of the European Union (CJEU) and Polish tax practice, a fixed establishment is a place that:
- has a sufficient degree of permanence,
- is equipped with human and technical resources,
- enables the independent performance of VAT-taxable activities.
Importantly, an FE may exist even without a formal branch or subsidiary in Poland. What matters are the actual circumstances of conducting business activities, rather than the legal form.
FE and VAT in Poland – the previous approach
Until now, the determination of whether an FE existed was primarily relevant for:
- identifying the place of taxation of services,
- assessing the obligation to register for VAT in Poland,
- settlements in supply chain and service models.
In practice, many foreign entities assumed that the absence of an FE allowed them to remain “outside” the Polish operational VAT framework.
KSeF and foreign entities – a key shift in the Ministry of Finance’s approach
According to the Ministry of Finance’s explanations of 28 January 2026, a foreign VAT taxpayer will be required to issue invoices via KSeF if it has a fixed establishment in Poland that participates in the relevant transaction.
This means that:
- VAT registration in Poland alone does not always trigger the KSeF obligation,
- the decisive factor is the existence of an FE and its involvement in the sale,
- the KSeF obligation may also apply to entities that are formally “foreign”.
When does an FE “participate in a transaction”?
Based on the Ministry of Finance’s explanations, an FE is considered to participate in a transaction if, in particular, it:
- takes part in negotiating contractual terms,
- is responsible for the performance of the supply or service,
- uses local resources (personnel, infrastructure),
- bears operational responsibility for the execution of the transaction.
It is not necessary for:
- the FE to be a party to the contract,
- the invoice to be issued by a Polish branch,
- the FE to settle VAT independently.
This approach significantly broadens the scope of entities potentially covered by the KSeF obligation.
Examples of risk areas
In practice, the risk of creating an FE – and consequently a KSeF obligation – may arise, among others, in the case of:
- foreign companies using Polish operational or technical teams,
- business models based on a Polish “back office”,
- long-term cooperation with Polish subcontractors operating de facto as internal structures,
- consignment warehouses and logistics centres,
- IT structures and shared service centres.
In many cases, an FE has so far been treated as an “acceptable VAT risk”. With the introduction of KSeF, it becomes a systemic and operational risk.
Consequences of failing to use KSeF despite the existence of an FE
Incorrect classification of FE status may result in:
- issuing invoices outside KSeF despite a statutory obligation,
- challenges to the right to deduct VAT on the customer’s side,
- VAT sanctions and administrative penalties,
- issues in tax reporting and audits.
What should foreign taxpayers do now?
In the context of KSeF, it is crucial to:
- carry out an FE analysis in Poland – not only formal, but also operational,
- assess whether the FE participates in sales transactions,
- verify which invoices may need to be issued via KSeF,
- adjust accounting systems and invoicing processes accordingly,
- ensure a consistent approach to VAT, KSeF and data reporting.
Summary
The Ministry of Finance’s explanations of 28 January 2026 clearly indicate that a fixed establishment of foreign entities in Poland has become one of the key criteria for the obligation to use KSeF.
For many international groups, this means the need to reassess their operational models in Poland. In practice, it is far better to prepare for KSeF through a conscious and well-documented FE analysis today than to explain its absence during a tax audit tomorrow.
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