Something of interest for Swedish (but not only) businesses having their warehouse / logistics operations in Poland. Does the warehouse operated by independent / external logistics operator create a tax permanent establishment of a Swedish company in Poland?
This was the issue analyzed by the Polish tax authorities in the recently issued tax ruling dated 1st October 2024 (ruling No: 0114-KDIP2-1.4010.412.2024.2.PK).
The case involved a Swedish manufacturer and distributor utilizing a Polish external and independent logistics operator for storing products in Poland and delivering them to customers in Poland and neighboring countries. The Polish logistics operator managed all logistics operations, including decisions related to infrastructure and staffing.
The Swedish company had no infrastructure or staff located in Poland, and all other business operations were conducted exclusively in Sweden. Notably, commercial offers were sent, and delivery orders were collected only by representatives of the Swedish company based in Sweden.
The remuneration of the Polish logistics services provider have been agreed as a fixed monthly fee for a storage of goods and other services related thereto.
The Swedish company claimed that it does not have any control over the warehouse or any part of warehouse operations (consent of the Swedish company was required only for a change of location of storage of the goods).
The Swedish company had doubts whether use of such warehouse creates a tax permanent establishment of the Swedish company in Poland. In other words, whether Swedish company is obliged to pay Polish taxes in connection with its Polish logistics operations done through the independent Polish service provider.
The Polish tax authorities confirmed the standpoint of the Swedish manufacturer that in the circumstances described above, use of the external / independent Polish logistics operator does not create a tax permanent establishment of the Swedish company in Poland.
The key takeaway: the risk of a tax permanent establishment in Poland is eliminated if the Polish logistics operations are properly structured. This includes significant limitation (or actually elimination) of involvement of the Swedish (or other foreign) manufacturing or distribution company in the Polish logistics operations. This includes also ensuring that regulations of the agreement with the Polish logistics operator does not give (even indirectly) the foreign company any control over any part of a warehouse.
If you need tax guidance related to international tax matters involving Poland, we are ready to help. Read more in the section dedicated to international taxation.
