- Permanent Zero VAT Rate Allowed: The Polish government can now permanently introduce a zero VAT rate on specific items such as food, press, and books, as EU regulations allow for this under the amended VAT Directive.
- New Opportunities Under Amended Directive: The amended VAT Directive, adopted in April 2022, allows Member States to apply a VAT rate lower than 5%, even 0%, on goods and services meeting basic consumer needs, such as foodstuffs, water, medicinal and pharmaceutical products, health and hygiene products, and certain cultural objects.
- Selection of Categories: Member States can choose up to seven groups from those listed in Annex III of the Directive, which covers over 30 categories, and apply the reduced VAT rate. One suggested category by the EU is solar panels, in line with environmental commitments.
- Flexibility for Member States: While the EU suggests including solar panels as one of the categories for reduced VAT, Member States have the freedom to choose other categories within the directive’s guidelines to apply lower VAT rates.
- Expert Opinion on Reduced Rates: Tomasz Michalik, a tax advisor, suggests that while the government can introduce a zero VAT rate on food permanently, using reduced VAT rates for short-term objectives may not be ideal, as the VAT system should not be manipulated for temporary goals.
Source: mddp.pl
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Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
