Starting from February 1, 2026, the National e-Invoicing System (“KSeF”) will become mandatory in Poland. The obligation to use KSeF will apply not only to Polish but also to foreign businesses that have a fixed establishment in Poland (so-called FE – Fixed Establishment). This raises an important question: can real estate owned by a foreign entity be considered a fixed establishment, thereby triggering the obligation to issue structured invoices via KSeF?
What is a fixed establishment and can real estate qualify as an FE?
According to EU regulations, including Council Implementing Regulation (EU) No 282/2011 of March 15, 2011, laying down implementing measures for Directive 2006/112/EC on the common system of value added tax (OJ EU L of March 23, 2011), a fixed establishment (“FE”) means a place other than the other than the taxpayer’s place of business, which is characterized by:
- a sufficient degree of permanence,
- an appropriate structure in terms of human and technical resources,
- enabling it either to receive and use the services supplied for its own needs, or to provide services in its own name.
In practice, the question often arises whether real estate – such as an office building, warehouse, commercial premises, or a rented apartment – may be considered a fixed establishment.
The answer is: yes, but only under certain conditions. Real estate may constitute an FE in Poland if it meets the above criteria. The decisive factor is the actual use of the property for business purposes and the level of the taxpayer’s l involvement in its operation.
In rulings of the Court of Justice of the European Union (“CJEU”), including cases C-168/84 Berkholz and C-260/95 DFDS, it was emphasized that mere ownership of real estate is insufficient to qualify it as a fixed establishment. An FE exists only when genuine economic activity can be carried out from that location.
Furthermore, in case C-931/19 Titanium Ltd, the CJEU held that a fixed establishment cannot be based solely on technical infrastructure – the presence of staff is also required. Consequently, if the owner of the real estate does not have personnel providing services connected with its rental, the property does not constitute an FE for VAT purposes.
When does real estate not constitute an FE?
Ownership of real estate does not automatically result in the existence of a fixed establishment. Such classification does not apply in particular when the property:
- is held solely as an investment (e.g., without active management),
- serves a business carried out by an independent entity (e.g., rented out to third parties),
- is not accompanied by the presence of personnel (e.g., the foreign entity relies exclusively on outsourcing and has no real presence in Poland).
Conclusion
Real estate may, but does not necessarily, qualify as a fixed establishment in Poland. The decisive factor is how the property is used – specifically, whether it is genuinely employed for organized and ongoing business activity.
If such circumstances are established, the entrepreneur – regardless of its place of registration – becomes subject to obligations under Polish VAT regulations, including the obligation to issue e-invoices through KSeF.
In an era of increasing digitalization and tightening of tax systems, awareness of obligations stemming from owning property in Poland is becoming crucial for conducting business safely.
