On 20 May 2024, a general interpretation was issued by the Minister of Finance on the taxation of benefits consisting in the transfer of knowledge as part of the education process, by natural persons who are VAT payers, on the basis of agreements concluded with higher education institutions (HEIs) (file reference number PT1.8101.1.2024).
The position of the Minister of Finance boils down to determining the method of VAT taxation of services consisting in the transfer of knowledge by lecturers who are VAT taxpayers, on the basis of contracts for the provision of knowledge concluded with HEIs as part of the education process organised by these HEIs, and in particular to the possibility of covering these services with the VAT exemption specified in Article 43 sec. 1 point 26, points 27 and 29(c) of the Polish VAT Act and § 3 sec. 1 point 13 of the Decree of the Minister of Finance of 20 December 2013 on exemptions from tax on goods and services and the conditions for the application of these exemptions (“the Decree”).
It was first indicated that if the remuneration of lecturers received for the activities performed by them constitutes revenue referred to in Article 15 sec. 3 point 3 of the Polish VAT Act (i.e. income from an employment relationship or similar), the services provided by lecturers will not constitute activities subject to VAT, because they will not be considered business activity within the meaning of the Polish VAT Act.
At the same time, if it is found that the above-mentioned regulation does not apply in a specific case, lecturers providing services consisting in the transfer of knowledge on the basis of contracts concluded with universities will be VAT payers – these services will be subject to VAT.
For such services, the application of the exemptions referred to in Article 43 sec. 1 point 26, 27 and 29c of the Polish VAT Act and in § 3 sec. 1 point 13 of the Decree should be considered. These tax exemptions in the field of education are therefore subject to the joint fulfilment of two conditions:
- subject-related, i.e. concerning the nature of the service provided – it should be a service in the field of education (including vocational), vocational retraining or a service closely related to these services, or a teaching service;
- subjective, i.e. concerning the status of the contractor of the service provided – the service should be provided by specific entities (public law bodies or other entities considered to have comparable objectives by a given Member State or by private teachers).
Referring strictly to the possibility of applying the above-mentioned exemptions, the Minister of Finance indicates:
A. Tax exemption for activities performed by units covered by the school education system and universities, scientific units of the Polish Academy of Sciences and research institutes
A lecturer providing education services to an HEI meets the objective condition, but does not meet the subjective condition – he or she is not an entity covered by the school education system. Therefore, the exemption referred to in Article 43 sec. 1 point 26 of the Polish VAT Act cannot be applied.
B. Tax exemption for activities performed by private teachers
Private teaching does not cover situations where the teacher is at the disposal of a third party who pays the teacher a salary as a service provider to the education system administered by that third party. Thus, it is not possible to use the exemption under Article 43 sec. 1 point 27 of the Polish VAT Act.
C. Tax exemption for vocational training or retraining activities
Vocational training or retraining services provided by HEIs to students, where lecturers at the request of HEIs actually transfer knowledge as part of such education, fall within the scope of Article 43 sec. 1 point 26b of the Polish VAT Act. Therefore, the provision of Article 43 sec. 1 point 29 of the Polish VAT Act does not apply to vocational training or retraining services provided by HEIs, and thus also to such services provided by lecturers to HEIs.
To sum up, the exemptions provided for in Article 43 sec. 1 point 26, 27 and 29 of the Polish VAT Act, as well as in § 3 sec. 1 point 13 of the Decree will not apply to the services of transferring knowledge by lecturers who are VAT taxpayers, provided on the basis of agreements concluded with HEIs as part of the education process organised by these HEIs.
Thus, such a lecturer who will provide educational services to the university as part of his sole proprietorship should, in principle, issue an invoice with VAT, without the possibility of applying the above-mentioned exemptions. A possible exemption may be based on Article 113 of the Polish VAT Act, i.e. subjective exemption.
Due to the content of the ruling, the Minister of Finance did not analyse another, extremely important issue – does the fact of providing services in electronic form affect the application of the VAT exemption?
It is worth noting here that the provisions of the Polish VAT Act – in particular Article 43 – do not contain any provision that would exclude the application of Article 43 sec. 1 point 26a of the Polish VAT Act in a situation where the services covered by this provision are also “electronic services” within the meaning of the VAT Act or Regulation 282/2011.
The above is confirmed by the judiciary – for example, in the judgment of the District Administrative Court in Kraków of 24 June 2021 (file reference number I SA/Kr 546/21), where it was indicated:
“The concept of an electronic service within the meaning of the provisions of the Act refers only to the form of the service, not to its content. Therefore, it should be stated that the identification of a given activity as an electronic service (according to the EU nomenclature: a service provided by electronic means) does not result in a change in the legal classification of this activity for the purposes of applying other provisions of the Act. This means that the service does not lose the status of an exempt service just because it is provided electronically“
A similar position was also presented in the judgment of the District Administrative Court in Warsaw of 18 May 2018 (file reference number III SA/Wa 2469/17), which was upheld by the Supreme Administrative Court (judgment of 15 July 2021, file reference number I FSK 1993/18).
In addition to the above, also tax authorities also take an unchanged position, indicating what is pointed out, for example, by the individual interpretation of the Director of the National Tax Information of 12 January 2024 (file reference number 0114-KDIP4-2.4012.650.2023.1.MB).
