On 14th July, the President signed law of 7th July for crowdfunding for domestic businesses and assistance for borrowers. In this law it is possible find provisions regulating credit holidays, but also the extension of the so-called Anti-inflation Shield.
As a reminder, with the start of the year, legislation was introduced to reduce VAT rates on selected products called Anti-inflation Shields. From 1st January Anti-Inflation Shield 1.0 has been introduced to reduce electricity prices. Initially, it was intended to be in force until the end of May, but its application has already been extended until the end of July. (See more: https://asbtaxblog.com/lower-vat-rates-in-poland/)
The anti-inflation shield 2.0, which mainly concerns food and agricultural products, was initially intended to apply in the period from 1 February to 31 July.
Anti-inflation Shield 1.0. included the following rate changes:
- Reduction of the VAT rate on natural gas from 23% to 8%
- Reduction of the VAT rate on electricity from 23% to 5%
- Reduction of the VAT rate on system heat from 23% to 8%
- Shield subsidies for households
- Reduction of the price of fuel through maximum reduction of excise duty
- Extension of special gas tariffs to multi-apartment buildings of cooperatives and housing communities, as well as hospitals, schools, kindergartens, nurseries and cultural institutions
The Anti-inflation Shield 2.0. provided in particular:
- Reduction of the VAT rate on fuel from 23% to 8%
- Reduction of the VAT rate for basic food products currently subject to 5% VAT rate to 0% of VAT
- Reduction (already decreased) of VAT rate for natural gas from 8% of VAT to 0% VAT rate
- Prolongation of application of the 5% rate for electric energy
- Reduction of the VAT rate on heat from 8% to 5%
- Reduction of VAT rate to 0% of VAT rate for agricultural fertilizers
In the latest update of the regulations, the application of reduced tax rates covering both products and goods listed in Shield 1.0 and 2.0 . Thus, lower VAT rates will continue to apply in the period from 1 August to 31 October.
The regulations entered into force on 29.07.2022.
For more information, please contact our experts:
CEE VAT Compliance Director
Senior Tax Manager ‑ Licensed Tax Adviser
Senior VAT Consultant