Context: Decision of the Provincial Administrative Court in Gliwice (Poland) on November 20, 2019 on the existence of a Fixed Establisment in Poland of a Luxembourg established company. Besides a detailed analysis of the facts, the interpretation of the term ”Fixed Establishment” following EU law, ECJ Cases and Polish law, the Decision also referred to C-547/18 Dong Yang (. This is ECJ case is still pending for decision at ECJ/CJEU
Extract from the Decision of the Court (Link to the Decision in PL – Unofficial translation in English)
I SA / Gl 737/19 – Judgment of the Provincial Administrative Court in Gliwice
Taking into account the regulations contained in the Executive Regulation, as well as the theses presented in the cited jurisprudence of the CJEU, the taxpayer has a permanent place of business when the following conditions are met;
(a) the place of business has an appropriate structure in terms of personnel and technical facilities to enable the receipt of purchased services and their use for the needs of that place of business or the provision of services (conducting business) from that place;
b) the place has a certain level of permanence, i.e. the taxpayer intends to conduct business in this place on a permanent (non-periodic) basis;
c) the activity carried out here is independent of the main activity (the place is characterized by decision-making independence).
On point (c), further clarification as per the Court Case:
”The applicant will also not have any structure in Poland that could participate in making management decisions or the process of negotiating and concluding contracts. In particular, there will be no employee of the Company or other person authorized to represent or conclude contracts on behalf of the Company in Poland. All activities related to the commercial activity of the Company will be undertaken at the Company’s headquarters in L. – there will be contracts for the purchase and sale of goods, orders for the delivery of goods, etc., as well as strategic decisions related to the functioning of the Applicant.
Consequently, in the analyzed facts, the condition of conducting business in an independent manner from the Company’s operations in Luxembourg will not be met. The lack of decision-making independence in itself excludes the existence of a permanent place of business.”
Reference given to C-547/18 Dong Yang and C-605/12 Welmory
”It is also worth noting that in the recent Opinion of the Advocate General of November 14, 2019 in the abovementioned case C-547/18, it was stated that a subsidiary of a company (from a third country) is generally not its permanent place of business in meaning of art. 44 second sentence of Directive 2006/112 / EC and Art. 11 paragraph 1 of Implementing Regulation (EU) No 282/2011. Another conclusion, however, would be possible if the contractual structure formed by the recipient violated the prohibition of abusive practices. It is for the referring court to examine this issue.
The introduction to this opinion states that, although the Court has repeatedly already decided in the past when we are dealing with a permanent establishment in the meaning of VAT, there is no clear statement in these judgments regarding the possibility of treating a subsidiary as a permanent establishment economic, parent company. In the DFDS ruling, the Court was initially apparently inclined to recognize the subsidiary as a permanent establishment. However, in the decision in the Daimler case he again distanced himself from this possibility. In the Welmory case, he recently refrained from answering.”
