VAT (part 8) - Tax rates and tax exemptions


General rules

The rules of taxation and the size of the rates are specified in the VAT Act, in particular in Chapter VIII and its annexes. Polish regulations allow the use of VAT rates:

  • 23% generally accepted tax rate;
  • 8% rate applicable to selected goods and services listed in Annex 3;
  • 5% rate for the goods listed in Annex 10;
  • 0% applicable to intra-Community supply and export of goods, as well as for goods listed in Annex 8 and in special cases (Article 83 (1));
  • zw is not mentioned directly in the act, but it is used in the case of the sale of goods or services that benefit from the exemption of the VAT in question.

The choice of the VAT rate depends on the nature and type of sale. The entrepreneur cannot decide for himself what rate he applies. In this case, he must be guided by the regulations. To make it easier for taxpayers to assign the rate, the legislator assigned a rate of 8%, 5% and 0% to specific goods and services for which their use is possible. Here, the statistical classification plays a very important role.

Special cases of determining output VAT

The provisions of the Value Added Tax Act, apart from the generally applied VAT rates, also define specific procedures for determining the value of the tax. Selected examples for which a special moment of tax on goods and services is applied:

Small entrepreneurs

Entrepreneurs providing personal taxi services have the option of taxing services in the so-called in the form of a lump sum at a rate of 4%.

Flat-rate farmers

Special procedures give them the right to receive a flat-rate 7% tax refund from the buyer.

Entrepreneur providing services (including services in the field of trade and gastronomy)

He can calculate the amount of tax due as the product of the value of the delivery and the rate

  • 18.70% - for goods and services subject to the 23% tax rate;
  • 7.41% - for goods and services subject to the 8% tax rate;
  • 4.76% - for goods and services subject to the 5% tax rate.

The role of statistical classifications

Statistical classifications, and in particular the Polish Classification of Products and Services, is important for the purposes of determining VAT rates, as it allows for assigning goods to a given rate. Therefore, only when the PKWiU number is correctly specified, it will be possible to precisely set the tax rate for a given item. If the entrepreneur is not sure whether the product or service has been correctly classified, he may refer to the Łódź Center for Classification and Nomenclature of the Statistical Office.

Objective exemptions

The sale of individual goods or selected services may be exempt from VAT. The scope of activities subject to exemption is specified in Art. 43 of the Act. Among the goods / services exempt from VAT, you can find, among others:

  • the supply of second-hand goods (used in the company for at least 6 months), however, in relation to those goods, the purchase of which was not entitled to a VAT deduction (mainly related to the purchase of goods on the basis of a VAT-margin invoice, sales contract or such goods that were purchased with with the wage rate);
  • delivery of buildings (here also the act distinguishes specific conditions that allow for the application of the exemption);
  • universal postal services;
  • medical care services;
  • educational services (including private teaching and language teaching);
  • financial and insurance services.

In the case of the sale of goods or the provision of services that are exempt from VAT, the entrepreneur applies the VAT rate on the invoice. For the buyer, this means that he will not be able to deduct VAT from such an invoice.