A natural person runs an internet blog as a hobby. It has been decided to provide the surface of the website to a company based in Ireland (Google) – for contextual advertising. Advertisers do not pay for an ad display, but for clicks on the ad. When Google collects a certain amount, it transfers it to the blog owner’s account. Does this person have to set up a business (it has not been yet done)? It’s this person’s preference not to run it, but to pay a lump sum as for a private lease. Is it possible? Being a person who does not run a business, is it necessary to issue invoices to Google and submit JPK_V7 in Poland? Is it required to register as a VAT-EU taxpayer?
In the situation described above, there is no obligation to register a business, this way of earning money can be accounted under a separate source of income, which is private rental. This was confirmed by the Ministry of Finance in the general interpretation of 5th September 2014. It stated that a natural person who provides a place on the website in order to publish content of, among other things, paid advertising, obtains income from a contract of a similar nature to a rental or lease contract. Revenues on this account should therefore be taxed as a registered lump sum, provided that they are not obtained as part of a business activity.
The taxpayer may therefore pay a lump sum on the revenues from this source, recorded according to the rates appropriate for the revenues from rental and lease: 8.5% up to the amount of PLN 100.000 and 12.5% of the surplus of revenues over PLN 100.000.
However, failure to register a business activity does not exempt from VAT obligations. The provision of a website that it runs for advertising purposes constitutes an economic activity. In this case, we are dealing with electronic services that are provided to a buyer based in Ireland and who has no permanent place of business in Poland for which these services would be provided. Therefore, the place of their taxation is the territory of the country in which the client is established.
However, this does not release the Polish service provider from the obligation to issue invoices documenting the services provided. In the interpretation of 11th March 2022, the head of KAS stated:
The taxpayer is obliged to issue invoices documenting the sale. The provisions on invoices apply, among other things, to for the provision of services, the place of provision of which is the territory of a Member State other than Poland, and the person liable for the payment of value added tax is the client.
As the client is responsible for tax settlement, the invoice should contain the words “reverse charge”.
In addition, the blog owner must:
- register as a VAT-EU taxpayer, with the possibility of using a tax exemption,
- submit to the Tax Office (only electronically) summarizing information on intra-Community transactions (VAT-EU), i.e. on services rendered, the place of supply and taxation which is in this case in Ireland,
- keep sales records
When using the subjective exemption, the taxpayer does not have to send JPK_V7 files to the Tax Office, despite the already mentioned registration obligation for intra-Community transactions (submission of VAT-EU summary information).