Iran conflict drives renewed VAT and excise cuts
- Ministry of Finance resumes VAT cut from 21% to 8% rate from 17 August until September
- Fuel duties cut to minimum permitted by EU
- VAT on fuel had been cut earlier this year, but had returned to 21% in June
Last fuel VAT cut ended June 2026
On 16 June 2026, the Ministry of Finance confirmed the VAT cut on fuel, first introduced on 26 March will end on 30 June 2026. This is the forth extension.
Follow our Iran conflict VAT cut tracker to see what other countries are doing. Read our Polish VAT guide for further background.
Inflation fears prompt VAT cut debate
The VAT and excise cuts were announced by the Prime Minister, Donald Tusk, on 26th March 2026. He confirmed Poland is also exploring a windfall tax on the energy companies which have benefited by spiking fuel prices.
On 30th March 2026, the Parliament approved these changes for implementation by 6th April 2026. On 27 May, the cut was rolled over until at least 15 June 2026.
Oil prices have passed $100 per barrel since the conflict began, pushing up pump prices across the EU, where taxes including VAT and excise account for more than half of fuel prices on average.
Government: “all options on the table”
The Polish government has stopped short of announcing any VAT reduction, but its signalling is clear. Officials have indicated that further intervention remains possible if prices continue to rise, including tax measures. Business press has gone further, reporting that the government may reduce VAT on fuels if market conditions fail to stabilise.
Poland has already introduced:
- Fuel price caps
- Margin restrictions
- Discounts via state-linked energy players
Opposition: VAT cut proposed
The opposition party, PiS Vice President Czarnek P, has already submitted a proposal to cut VAT and excise on fuel. And proposed reducing the fuel VAT rate from 23% to 8%
A repeat of the 2022-23 inflation VAT cuts?
Poland has done this before. During the 2022 inflation spike, it used VAT as part of its Anti-Inflation Shield, cutting fuel VAT from 23% to 8% and reducing VAT on basic foodstuffs to 0%.
