Anti-inflation shield VAT cuts fall foul of EU VAT Directive rules
The EU’s European Commission has blocked VAT zero-rating of natural gas, fuels and fertilers by Poland as part of its ‘Anti-Inflationary Shield’. However, it has agreed to zero-rating of basic foods.
Under EU VAT Directive rules, energy must be subject to at least 5% VAT. This comes despite agreement this year on extended EU VAT rate setting freedoms.
Polish inflation hit 17.9% in October, up from 17.2 in September. This is largely being driven by the Russian invasion of Ukraine.
Learn more about Polish VAT in our country guide.
In response to the EC decision that the application of reduced VAT rates was unacceptable, Prime Minister Mateusz Morawiecki declared that the anti-inflation shield would remain, but in a changed form.
Get our free VAT newsletter for international VAT updates.