The US Army has ambitious plans to expand its military presence in Poland. As part of the Enhanced Defense Cooperation Agreement (EDCA) signed in 2020, the US intends to invest nearly USD 300 million in our country for various infrastructure projects, purchases of goods and services. One of the most important is the construction of the NATO Equipment Long-Term Storage and Maintenance Complex (LTESM-C) in Powidz, which is to be the largest single project of this type financed by NATO and the USA in the last 30 years.
The LTESM-C complex will house hundreds of heavy military vehicles, such as M1 Abrams tanks, M2 Bradley infantry fighting vehicles, M109 and M777 self-propelled guns, and HIMARS rocket artillery systems. This equipment is to be ready for immediate use by allied reinforcement forces in the event of an armed conflict. Thanks to this, it will not be necessary to transport it from the USA by sea, which would take many weeks. American soldiers will be able to reach Poland by air within a few hours and take over the equipment from warehouses. The LTESM-C complex will also serve as a service and production center for NATO equipment not only for Poland but also for other European countries that are interested in purchasing HIMARS systems.
Another important investment of the US Army in Poland is the construction of the MSA (Munition Storage Area) ammunition storage complex, also in Powidz. Various types of ammunition for NATO equipment stationed in Poland will be stored there. Both investments are part of the plan to expand the military infrastructure in Powidz, which aims to increase the security and defense capabilities of Poland and the region.
The planned investments of the US Army in Poland testify to the strong alliance between our country and the US and the strategic importance of Poland for NATO security, which means that US Army and NATO investments will increase in the future.
At this point, it is necessary to address the issue of VAT settlement on supplies made to NATO and the US Army, which is a complex issue that requires special attention. Depending on the type of delivery, the place of its implementation, and the status of the recipient, different VAT exemption rules or preferential rates may apply. In order to correctly settle VAT, it is necessary to have appropriate documentation confirming that the conditions for exemption or reduction of the rate have been met. In case of doubts as to the application of the relevant provisions, it is recommended to seek tax advice or submit an individual tax interpretation to the competent authority. Such preventive action will help to avoid problems related to VAT settlements, including the obligation to charge VAT, pay interest on late VAT payments or sanctions and fines for issuing incorrect invoices, not charging VAT, or preparing incorrect VAT returns.
With the above entry, we start a series of posts related to VAT settlement on the supply of goods and services to the US Army and NATO.
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