Recent judgments of the Supreme Administrative Court (NSA) indicate that continuous services also include services provided under ongoing cooperation agreements, where individual services are repeated and successive payment dates have been agreed.
Businesses frequently enter into agreements for the provision of services over an extended period, on an ongoing or recurring basis. For tax purposes, such services may be classified as continuously supplied services. However, tax legislation does not define what should be understood by this term. In practice, this gives rise to interpretative doubts, particularly in the area of VAT, where classifying a service as continuous is of considerable importance, primarily for determining the correct time at which the VAT chargeable event occurs.
When Does the VAT Chargeable Event Arise?
As a general rule, the VAT chargeable event arises when goods are supplied or services are performed.
In the case of services provided continuously for more than one calendar month, where payment is made several times at regular intervals, determining when a given service should be considered performed can be particularly problematic.
Pursuant to Article 19a(3) of the Polish VAT Act, such services are deemed to have been performed at the end of each period to which the payments or settlements relate, until the provision of the service is completed. A service supplied continuously for a period exceeding one year, in respect of which no payment or settlement deadlines fall due in a given year, is deemed to have been performed at the end of each tax year until the provision of the service is completed.
It should be noted that Article 19a(3) of the Polish VAT Act applies where the Act does not provide for a specific time at which the VAT chargeable event arises for the particular type of service.
Continuous Services – No Statutory Definition
The absence of a statutory definition of continuous services gives rise to numerous interpretative doubts. For years, taxpayers and tax authorities have disagreed over whether particular services should be classified as continuous.
Administrative courts have repeatedly held that a service can be considered continuous where it is not possible to distinguish individual activities performed by the service provider (Supreme Administrative Court judgment of 15 December 2017, case no. I FSK 173/16; Regional Administrative Court in Łódź judgment of 12 August 2020, case no. I SA/Łd 850/19).
In individual tax rulings, tax authorities have likewise emphasised that a continuous supply of services may be recognised where the recurring activities cannot be separated from one another (individual tax ruling issued by the Director of the National Tax Information Service on 23 June 2025, ref. no. 0114-KDIP1-1.4012.193.2025.2.EW). Importantly, according to the tax authorities, a supply may be considered continuous where only the date on which the service commences can be clearly determined, while its completion date, understood as the definitive performance of the service, is not specified in advance. Instead, it is determined by the expiry date of the agreement between the parties (individual tax ruling issued by the Director of the National Tax Information Service on 26 June 2026, ref. no. 0113-KDIPT1-1.4012.359.2026.2.ŻR).
At the same time, a more liberal approach to the concept of continuity has emerged. Under this approach, services may also be classified as continuous where they are identifiable, recurring and provided over a specified period under a single legal relationship. In its judgment of 11 March 2025 (case no. I SA/Po 794/24), the Regional Administrative Court in Poznań held that the wording of Article 19a(3) of the Polish VAT Act “indicates that it covers both services supplied continuously and any other services which are, by their nature, recurring, provided that the parties have agreed on settlement (payment) periods”. For a service to qualify under this approach, it is not necessary for individual activities to be impossible to distinguish, or for it to be impossible to determine when one service ends and the next begins. What matters is the existence of a series of successive services and the agreement between the parties on settlement periods or payment dates.
The Supreme Administrative Court expressed a similar view in its judgments of 4 August 2020 (case no. I FSK 1848/17) and 27 May 2019 (case no. I FSK 970/17).
Provision of Transport Services
Transport services are an example of services provided under long-term agreements. It is common practice for multiple individual transport operations to be carried out under a single agreement. Although each journey can be identified separately in practice, accounting for hundreds of transactions in a given month can be problematic and costly from an operational perspective, particularly where they form part of one ongoing business relationship.
Until recently, tax authorities generally held that transport services could not be regarded as continuous services, but rather as repeated provision of identical services. Consequently, the VAT chargeable event for transport services could not arise under Article 19a(3) of the Polish VAT Act solely because the parties had agreed on settlement periods. According to the tax authorities, the general rules should apply, meaning that the VAT chargeable event arises when each individual transport service is performed (individual tax rulings issued by the Director of the National Tax Information Service on 10 May 2021, ref. no. 0111-KDIB3-3.4012.68.2021.1.MAZ, and 2 July 2018, ref. no. 0112-KDIL1-3.4012.299.2018.2.PR).
However, in its judgment of 9 September 2024 (case no. I FSK 1786/20), the Supreme Administrative Court held that the concept of continuous services should cover not only services traditionally defined as periodic or continuous, but also services provided under ongoing cooperation agreements where successive instalments or payment dates have been agreed in connection with their provision. Thus, the Supreme Administrative Court confirmed that transport services may qualify as continuous services even where individual stages of those services can be identified. This judgment reinforced a more favourable approach for taxpayers, which has also become increasingly apparent in recent individual tax rulings.
In an individual tax ruling of 2 August 2024 (ref. no. 0114-KDIP1-2.4012.286.2024.1.JO), the Director of the National Tax Information Service confirmed that where a taxpayer is required, under a framework agreement, to perform individual services covered by a single contractual relationship, with their recurring nature established in advance and settlement periods agreed upon (in order to improve the efficiency of the invoicing process), the VAT chargeable event arises at the end of each settlement period to which the payments relate, as reflected in the invoice issued.
Furthermore, in an individual tax ruling of 3 June 2025 (ref. no. 0111-KDIB3-1.4012.212.2025.7.KO), the Director of the National Tax Information Service held that where a service is performed according to a schedule over several consecutive settlement periods and invoices are issued after the end of each such period, the service may be classified as a continuous service within the meaning of Article 19a(3) of the Polish VAT Act.
Transport and freight forwarding services were also recognised as continuous services by the Supreme Administrative Court in its judgment of 19 May 2025 (case no. I FSK 1995/21) and by the Director of the National Tax Information Service in an individual tax ruling of 11 February 2026 (ref. no. 0114-KDIP1-2.4012.760.2025.3.RST).
Is the Tax Authority Changing Its Approach?
Recent judgments of the Supreme Administrative Court indicate a broader interpretation of the scope of Article 19a(3) of the Polish VAT Act. This provision may cover not only services for which the commencement date can be determined, while the completion date is treated as the last day of the agreement between the parties, but also services provided under ongoing cooperation agreements which can be individually identified, are recurring in nature and are subject to successive payment dates. This approach reflects commercial realities and may help simplify VAT settlements. In practice, it allows taxpayers to document services performed during a given settlement period by issuing a single consolidated invoice to a particular customer.
It should nevertheless be emphasised that applying this settlement model must be supported both by the contractual provisions and by the actual manner in which the services are performed. This is a positive development in case law, although it remains important to monitor how the approach evolves in future judgments and, above all, whether and to what extent it will be accepted by the tax authorities.
Legal basis:
Article 19a(3) of the Act of 11 March 2004 on Tax on Goods and Services (consolidated text: Journal of Laws of 2026, item 1263, as amended).