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Poland zero-rated food VAT on inflation worries Feb 2022

Polish Ministry of Finance issues “Anti-Inflation Shield 2.0” – food and energy VAT rate cuts

The Polish Finance Minister has won Parliamentary approval to cut to zero that VAT rate on basic foods due to concerns over inflation. This would be introduced between 1st February and 31 July 2022. The December Polish inflation rate hit 8.6% in December, up from 7.7% in November, the highest rate in over 20 years. Poland is cutting VAT on energy and fuel from 1 February to 31 July 2022.

Foods covered include:

  • Dairy produce
  • Meat and fish
  • Fruit and plant-based drinks
  • Cerals and bakery prduce

1.5 million Fiscal registers require update

Poland has introduced VAT cash registers, point-of-sale devices which automatically report daily on sales to the Polish tax office. There are now over 1.5 million.

These need to be recalibrated for the VAT cut which is why the subsidy cannot be introduced sooner.

This would follow a cut to electricity VAT to help combat fast-rising inflation. Wholesale prices for electricity are now over three times higher than this time in 2020.

EU Finance Ministers agreed to more VAT rate setting freedoms

Under EU VAT Directive rules, member states may only levy reduced VAT rates on prescribed supplies such as food. Poland only currently applies its reduced 8% rate on a limited range of foods. Last week, the EU Finance Ministers agreed to allow more freedoms on reduced VAT rate setting which will come into effect from 2025. Sign-up for our free VAT & GST news updates.

 

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