Working through a foreign agency: commission, VAT-UE and reverse charge

In the previous post, I explained that eldercare services are VAT-exempt without a turnover limit (Art. 43(1)(23)). But if you work through a foreign care agency — German, Dutch, Austrian — that exemption is only half the story. The other half is import of services and reverse charge.

How it works in practice

You operate as a Polish sole proprietor (JDG). You provide eldercare in Germany through an agency (e.g. Promedica24). The agency finds clients, handles logistics, and takes a commission.

From a VAT perspective:

• Your care services — VAT-exempt (Art. 43(1)(23)). That doesn't change.
• Agency commission — this is a service that the agency (foreign entity) provides to you (Polish taxpayer). The place of supply is Poland (Art. 28b of the VAT Act). This is an import of services.

Reverse charge — what it means

Normally, VAT on an invoice from a Polish supplier is paid by the supplier. When importing services, the mechanism is reversed (reverse charge): you — the recipient of the service — calculate VAT on the agency's commission and report it in your JPK_V7M.

The mechanics:

1. The agency issues an invoice without VAT (because for a German taxpayer, the service is outside their VAT system)
2. You calculate Polish VAT on the commission amount (23%)
3. You report this in JPK_V7M as output VAT (import of services)
4. Simultaneously, you report the same VAT as input VAT (deduction)

The trap: no right to deduct

Here's the catch. The right to deduct input VAT applies only to the extent that purchases relate to taxable activities (Art. 86(1) of the VAT Act).

Your care services are exempt from VAT — meaning they are not taxable activities. This means you calculate VAT on the agency's commission (as import of services), but you cannot deduct it. It becomes your cost.

In practice:

• VAT 23% on agency commission = business expense (KPiR, column 13 — other expenses)
• In JPK_V7M you report the import of services (output VAT), but without deduction

VAT-UE — mandatory registration

Even if you're not a regular VAT taxpayer (because you benefit from the Art. 43 exemption), importing services from abroad requires VAT-UE registration.

This is a separate registration — you don't become a full VAT taxpayer. You register as a VAT-UE taxpayer solely for the purpose of importing services (Art. 97(11) of the VAT Act). Your care services remain VAT-exempt.

How to register:

1. Form VAT-R (registration application)
2. Check the box for VAT-UE registration
3. The tax office issues a NIP-UE
4. From that point, you file JPK_V7M with reported import of services

What goes in JPK_V7M

Every month (by the 25th of the month following the month you received the agency invoice), you report:

• Output VAT: import of services — commission amount, 23% rate, VAT amount
• Input VAT: the same VAT, but marked "without right to deduct" (because it relates to exempt activities)

It's a wash: output VAT = input VAT, but without deduction. The result: you pay the VAT to the tax office, but you deduct it in your PIT costs.

Real-world example with numbers

A caregiver works through a German agency. The agency charges €500/month commission.

• EUR/PLN rate (NBP average): ~4.30
• Commission: 2,150 PLN
• VAT 23%: 494.50 PLN
• JPK_V7M: output VAT 494.50 PLN, input VAT 494.50 PLN (without deduction)
• KPiR (col. 13): 2,150 PLN + 494.50 PLN = 2,644.50 PLN (total as cost)

Result: 494.50 PLN VAT is paid to the tax office, but it's included in PIT costs (reduces income tax).

Common mistakes

1. "I'm not a VAT taxpayer, so I don't report anything" — wrong. Import of services requires VAT-UE and JPK even with subjective exemption.
2. Deducting VAT on commission — not allowed, because care services are exempt.
3. No VAT-UE registration — the tax office can check this during an audit, penalties are real.
4. Invoice from agency without VAT and no reverse charge — this is the most common mistake. An invoice without VAT from a foreign contractor = signal that you must report the VAT.

Legal basis

Polish VAT Act — Dz.U. 2025 poz. 775 (consolidated):

• Art. 28b — place of supply for services (import of services, reverse charge)
• Art. 43(1)(23) — VAT exemption for care services
• Art. 86(1) — right to deduct (only for taxable activities)
• Art. 97(11) — VAT-UE registration for import of services
• Art. 103(1) — obligation to file VAT returns

Individual interpretations — The Director of KIS consistently confirms that the commission of a foreign care agency constitutes an import of services for a Polish sole proprietor. Current interpretations can be found in EUREKA (search: "import usług opieka" or "reverse charge agencja").

Note: Individual interpretations protect only the taxpayer who requested them — they are not universally binding.

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I run accounting for sole-proprietor care businesses, including settlements with foreign agencies. If you work through Promedica24, Carework or another agency — get in touch, I'll check if you have this set up correctly. First month free.