Poland will most likely implement reduced VAT rates

Regulations were drafted on 13 January 2022 and will be sent to Polish President for his signature. After this the proposed changes must be officially published to be applicable.

Although at present it is still contrary to the EU VAT law, Poland has plans to introduce, from 1 February to 31 July 2022 (6 months), reduced rates for some products, .e.g. foodstuff would be reduced from 5% to 0% and fuel would be reduced from 23% to 8%.

Reduced rates

As from 1 February 2022 till 31 July 2022 the VAT rates for the below mentioned products should be as follows:

  1. 0% VAT rate would apply to:
    1. Foodstuff so far subject to 5% VAT rate,
    2. Fertilizers and plant protection products, usually used in agricultural production so far subject to 8% VAT rate,
    3. Garden soli so far subject to 8% VAT rate,
    4. Agents improving soil properties, growth stimulants and growing substrates, referred to in the Act of 10 July 2007 on fertilization and fertilization, excluding mineral substrates (so far subject to 8% VAT rate),
    5. Natural gas (CN 2711 11 00 and 2711 21 00) – so far subject to 8% VAT rate based on a temporary measures applied since 1 January 2022.
  2. 5% VAT rate would apply to:
    1. Electricity and (CN 2716 00 00) – electricity is currently subject to 5% VAT rate but based on the temporary measures applied since 1 January 2022 it was supposed to keep this VAT rate till the end of March 2022. The amendment of the VAT Act extends this period till 31 July 2022,
    2. Heating energy – so far subject to 8% VAT rate based on a temporary measures applied since 1 January 2022.
  3. 8% VAT rate would apply to fuel. It is a decrease from the current 23%. In terms of fuels the exact wording of the law is as follows:
    “In the period from February 1, 2022 to July 31, 2022 for:
    1) motor gasoline (CN 2710 12 45 or 2710 12 49) and products resulting from mixing these fuels with biocomponents, meeting the quality requirements specified in separate regulations,
    2) diesel oils (CN 2710 19 43 and 2710 20 11) and products made of mixing these oils with biocomponents, meeting the quality requirements specified in separate regulations,
    3) biocomponents constituting intrinsic fuels, meeting the quality requirements specified in separate regulations, intended for driving internal combustion engines - regardless of the CN code,
    4) natural gas (wet) designed to power combustion engines and other gaseous hydrocarbons (CN 2711, excluding CN 2711 11 00 and 2711 21 00) and gaseous aliphatic hydrocarbons (CN 2901), liquefied - the tax rate is 8%. ”

The above changes (when approved) allow businesses to use reduced VAT rates in the provided period and therefore businesses should pay special attention to supplies which take place at the end of January, beginning of February and again at the end of July and beginning of August. The correct VAT rate should be used that applies when the tax point arises. Also, special attention should be paid to any credit / debit notes that would refer to earlier deliveries. Correct VAT rates should be used.

Questions or need help with your Polish VAT processes?

Please get in touch with us, in case you have any questions regarding this update, or if you are interested in how we can help you with your (Polish) VAT reporting obligations. Our VAT team is at your service! Please fill in the form below to get in touch.

27 Jan 2022 at 1:57 pm
3 min
Published by:
Daniëlle van der Meulen-Idema
Sr. VAT Specialist
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