Thanks to the anti-inflation mechanisms implemented by the Government, the new VAT rates were lowered to:
According to the assurances of Polish Prime Minister Mateusz Morawiecki, he will by all means try to counteract the skyrocketing inflation by supporting households, small and medium companies, schools, as well as hospitals through maintaining a similar level of prices. As he says: “So long as it is possible and there is no abrupt objection of the European Commission, we will keep the zero VAT rates on food (…) We do not withdraw the anti-inflation shield. It will just take a new form – due to the lack of approval of the European Commission”. (Polish Press Agency)
On the basis of carried out legislative works, Minister of Finance Magdalena Rzeczkowska signed an ordinance, rectified on 2 December, on reduced rates of VAT in 2023. This shall serve as the grounds to keep the zero VAT rate for basic foodstuffs and an 8% rate on certain products connected with agricultural production.
The Vice-Prime Minister and Minister of State Assets, Jacek Sasin, announced that the said rates will be increased. However, no information has been presented so far on the rate that will apply from the next year.
Nevertheless, whether the 23% tax will be brought back is a debatable. The Government claims that such an increase results from the pressure put by the European Union i.e., the lack of approval for keeping the current, lower rates and, moreover, possible penalties imposed if the current preference is maintained. From the perspective of Art. 98 of the European Directive on VAT, providing for the minimum threshold of 5%, which must be maintained for energy carriers, it leaves for the Member States a certain range for independent determination.
The lack of a clear decision of the Polish government on a specific rate for the listed products may result from the continued analyses concerning clarification of the budget as well as from the consultations held with EU representatives. However, the increase of the VAT rate for the a/m products in the next year is unavoidable since representatives of Polish authorities, judging from their speeches, are clearly inclined towards the presented stand.
Author: Joanna Kopera, Accountant, Accounting Firm MDDP Outsourcing.
Regulation of the European Parliament and the Council (EU) 2019/1009 of 5 June 2019 laying down rules on the making available on the market of EU fertilizing products and amending Regulations (EC) no. 1069/2009 and (EC) no. 1107/2009 and repealing Regulation (EC) no. 2003/2003.