VAT Act January 2025 changes to reduced rates
A range of changes to reduced Value Added Tax rates has been proposed to the VAT Act for 1 January 2025. These are detailed below.
To learn more, read our Polish country VAT guide.
Ship salvage
According to the planned changes, the rate of 0% is to cover rescue ships and lifeboats that are used at sea, but are not ships and ocean boats. Until now, this rate has been applied to high seas rescue vessels and lifeboats, as indicated by the project, this amendment aims to standardise the application of the VAT rate to ships and boats used for the same purpose.
Fertilisers and animal feed
There will be change in the issue of rates is the clarification of the wording of item 10 of Annex No. 3 to the Act on VAT – fertilizers and plant protection products and feed for farm and domestic animals. The planned changes are primarily aimed at standardizing the definition of these products, due to the lack of reference in VAT regulations, there were doubts about the interpretation and qualification of these terms. By referring to industry regulations, these changes would eliminate the uncertainties that arose in connection with these products.
Menstrual cups
However, the VAT rate on menstrual cups will be reduced, the rate will be reduced from 23% to 5%, this change is aimed at standardising the tax rates covered by hygiene products for women.
Medical devices
Another change is to maintain the rate of 8% for medical devices that have been approved for marketing under the previously applicable Medical Devices Act. This rate is to be maintained for these products indefinitely, this change is dictated by the fact that the current regulations provided for maintaining the rate only until May 27, 2025, but the Minister considered it unjustified to cover these products with a higher rate if they were admitted to the market and meet the requirements set out in the new law.
Live horses
The changes will also include the elimination of the reduced VAT rate for “live horses”, which will result from the need to adapt national regulations to the European Union directive, which established limits for the categories of goods/services that are covered by reduced rates. The removal of the reduced rate will allow the categories of goods/services to be adjusted to the maximum limit (24 categories) resulting from the Directive and will result in an increase in the rate from 8% to 23%.
Hemp
The tax rate covered by hemp products for smoking or inhalation without combustion will also be increased (to the basic rate), according to the draft amendments, it is unjustified to include these products at a reduced rate. However, this change will not include hemp seed products used exclusively for medical purposes (so-called medical marijuana).
