According to Article 41, Section 1 of the VAT Act, the standard rate of this tax is 22%. Although no one in Poland has paid this rate since 2011, it was "temporarily" raised to 23%. However, there are cases where no VAT is paid at all. Invoices in the rate section may include entries such as 0%, zw., or e.g. The common feature of these entries is that no VAT is generated. However, they differ for tax settlement purposes and cannot be used interchangeably.
0% rate
This rate may be applied in situations specified in the VAT Act and in the Regulation of the Minister of Finance on reduced rates of tax on goods and services of 9 December 2023 (Journal of Laws of 2023, item 2670, as amended).
The regulations define specific goods and services that are subject to a zero rate. Regardless of the industry, this rate applies to exports and intra-Community supplies of goods. A "0" rate does not mean that the goods/services are exempt from VAT. It must be reported on the tax return. Because a given transaction is taxed (at a 0% rate), the entity applying it must be registered for VAT. This rate allows for a deduction of input VAT. If we purchase goods at 23% VAT domestically, we will not recognize the output tax when selling them abroad. This results in an excess of input VAT.
Rate of interest
This rate will apply in two cases: firstly, when the supplier of goods/services benefits from the subjective exemption and secondly, when the VAT Act itself or the Regulation of the Minister of Finance on exemptions from value added tax and conditions for applying these exemptions of 20 December 2013 (Journal of Laws of 2023, item 955, as amended) provides for such an exemption (objective exemption).
The personal exemption is available to entities whose total sales value did not exceed PLN 200,000 in the previous tax year. Entities starting a business may benefit from this exemption if they do not exceed this amount in the first year, proportionally to the period of operation. However, entities supplying new means of transport, legal services, or jewelry services are excluded from the exemption, among others.
The exemption applies to, among others, the supply of undeveloped land other than construction land, gambling activities subject to gambling regulations, and the lease of land designated for agricultural purposes.
In the case of VAT exemption, there is no right to deduct input tax. This means that an entity exempt from VAT will not deduct VAT from an invoice received from a contractor, while a taxpayer benefiting from the exemption from VAT will not deduct VAT on purchases made for exempt activities, such as dental office equipment purchased by a dentist.
Rate e.g.
The annotation "e.g.", i.e. not subject to taxation, can be found on invoices documenting the delivery of goods/provision of services, in the case of:
- export of services
- deliveries with assembly in a country other than Poland
- delivery of goods which, at the time of delivery, are located in a country other than Poland.
The transaction will then not be taxed in Poland and VAT will be settled in another country.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of October 21, 2024
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