The Polish tax authority addressed a query on 30 October 2026 regarding VAT treatment of fees charged by a transport company when a client cancels a road freight or forwarding order. The fees, labeled as contractual penalties, compensation, or cancellation charges, arise either before transport commencement or after partial performance but before full completion.
Key Takeaways
- VAT Scope: Cancellation fees constitute consideration for a service supply (making the service available) and are generally subject to VAT at the standard rate.
- Timing of Supply: The taxable event occurs when the cancellation fee becomes due under the contract, regardless of whether transport was initiated.
- Contractual Label Irrelevant: Whether termed penalty, damages, or cancellation fee, the VAT treatment follows the economic substance of the transaction.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement