As of 1st July 2020, Poland is introducing a new VAT rate matrix, which will change the classification of goods and services for VAT purposes. This change will aim to simplify the VAT rate system in Poland and make it easier for taxpayers to determine what rate to apply.
From that date, goods and services will no longer be classified according to the Polish Classification of Goods and Services (PKWiU). Instead, taxpayers will need to apply the VAT treatment in accordance with the two following classification tools:
The Polish Government is introducing this new matrix with the intention of applying, as much as possible, a single VAT rate to an entire CN category of products. This means that a significant number of goods will have their VAT rates reduced from 8% to 5%. To balance the effect on the general reduction of rates, the new matrix will increase the rates on a few selected items.
The following items will have their VAT rate modified as of 1 July 2020:
In order to support taxpayers in determining which VAT rate to apply, the Polish government introduced in November 2019 a new scheme available for taxpayers.
The Binding Rate information (Wprowadzenie wiążącej informacji stawkowej or WIS) is an administration decision to help taxpayers follow the correct VAT rules for their products and services by giving them a clear confirmation on the VAT treatment.
Upon application, a decision should be given by the Director of the National Treasury Information within three months.
The Combined Nomenclature is updated each year, which means that, as a taxpayer, you will need to monitor on an annual basis any updates that impact your product categories.
If you think some of your products are affected by these changes, please contact our team today.
