Until recently, a Polish entrepreneur selling goods or services to customers in other European Union countries had essentially one option: once the local threshold was exceeded, they had to register for VAT in each of those states. Since 1 January 2025 the special SME scheme has been in place, allowing small businesses to use the VAT exemption outside Poland as well — on the basis of a single notification filed at home. For many sole proprietorships (jednoosobowa działalność gospodarcza, JDG) this means a real saving in time and foreign accounting costs.
What the SME scheme is and who can use it
The SME scheme is an EU solution based on Council Directive (EU) 2020/285. It allows small businesses whose place of business is in Poland to apply the VAT exemption to supplies of goods and services in the territory of other Member States. The condition is that the country in question has actually introduced such an option for foreign businesses.
The scheme is aimed at companies that sell abroad regularly but on a small scale — for example to consumers in Germany, the Czech Republic or the Netherlands, or to customers for whom the place of taxation is the buyer's country. Instead of registering for VAT in each of those states, the entrepreneur files a single notification in Poland and obtains a number used throughout the procedure.
Two thresholds you must watch at the same time
The SME scheme rests on two independent limits. The first is the EU threshold: the total annual value of supplies of goods and services whose place of taxation is within the European Union — including Poland and excluding the tax amount — may not exceed EUR 100,000 in either the previous or the current tax year.
The second threshold is national and is set independently by each state in which you wish to use the exemption. Under EU rules it may not exceed EUR 85,000 or the equivalent of that amount in the national currency. States may also differentiate thresholds by sector, set their own waiting periods for returning to the exemption, and exclude selected types of sales. Before you file, it is worth checking the conditions of the specific country — the European Commission publishes them in a dedicated portal on national VAT rules.
All values reported in SME scheme documents are stated in euro. For conversion, use the exchange rate published by the European Central Bank on the first day of the year; if no rate was published that day, use the rate from the next day on which it was published. Note that the EU threshold is an entirely different figure from the Polish domestic exemption, which from 2026 stands at PLN 240,000 — these limits operate in parallel.
How to obtain the Polish EX identification number
Registration for the SME scheme is filed exclusively online, through the e-Tax Office (e-Urząd Skarbowy), with the Head of the Second Tax Office Warszawa-Śródmieście. The document is called a prior notification (uprzednie powiadomienie). In it you provide your identification data, the Member States in which you intend to use the exemption, and the turnover achieved within the Union in the previous and current tax year — broken down by individual country, including Poland. Some states also require data going back two years.
An important practical note: if you have so far used the VAT exemption in Poland and are not registered, you must file a VAT-R registration form before submitting the prior notification. The head of the tax office has 35 working days to process the case — the deadline may be extended if additional verification is required. As a result you receive a Polish EX identification number consisting of the country prefix, the NIP tax number and the suffix "-EX". The exemption applies from the day you are informed that the number has been assigned for a state that has confirmed your right to the exemption.
Quarterly reports and ongoing obligations
Using the SME scheme comes with continuous reporting. The taxpayer files a quarterly report within one month of the end of the quarter — including where the last day of the deadline falls on a Saturday or a public holiday. The report shows turnover achieved in each Member State for the quarter, broken down by sector where the country in question applies such a split, and the value of domestic sales. Any changes to reports already filed must be corrected without delay.
Other matters — changing contact details, correcting previously reported turnover, extending the exemption to another country, or withdrawing from the exemption — are handled by updating the prior notification. If you spot an error before the EX number is assigned, you can withdraw the original notification by filing a new one; the 35-day period then starts again.
What happens once the EUR 100,000 threshold is exceeded
Exceeding the EU threshold of EUR 100,000 has immediate consequences. You must then file a quarterly report covering the period from the start of the quarter to the day the threshold was exceeded — within 15 working days of that day. The head of the tax office issues a decision deactivating the Polish EX identification number, which is immediately enforceable; an appeal is available. From that moment the exemption no longer applies in any of the states covered by the scheme.
The EX number will also be deactivated if you cease to meet the conditions for the exemption in all the countries where you used it, if the exemption stops applying there, or if you close your business. If exceeding the threshold is a realistic scenario, it is worth preparing in advance for VAT registration in the states where you sell.
Is the SME scheme worth it for your business
The SME scheme delivers the most value where foreign sales are steady but modest and the customers are consumers or non-taxable persons — that is, in situations where the reverse charge cannot be applied. The saving lies mainly in avoiding registration, returns and accounting support in several countries at once. The price is quarterly reporting and the need to monitor two thresholds simultaneously.
The decision should follow from an analysis of your sales structure: which countries, what volume, what type of buyer and how close you are to the limits. It is best taken before you start selling in a new state rather than afterwards — the scheme requires prior notification and time for the application to be processed.