Changes in VAT and excise duty in Poland in 2025 – what do entrepreneurs need to know?

Recent changes in tax regulations regarding Value Added Tax (VAT) and excise duty in Poland introduce several significant modifications that may affect the operations of many companies. This article provides detailed information about new rates, settlement mechanisms, and regulations covering selected products. Find out how these changes will impact entrepreneurs and the market.

Amendments to the VAT and Excise Duty Act and certain other acts – new provisions

On January 24, 2025, the Sejm passed an amendment to the Value Added Tax Act, the Excise Duty Act, and certain other acts. These changes introduce significant updates concerning the taxation of selected products, the reverse charge mechanism, the integration of cash registers with payment terminals, and excise regulations for cars.

Changes in VAT rates

One key changes is the introduction of a zero VAT rate for vessels and lifeboats used at sea that previously did not meet the definition of seagoing vessels. This decision may reduce the cost of equipment for rescue services operating in maritime zones.

The Act also provides for maintaining the preferential 8% VAT rate for medical products that were previously approved for sale under outdated regulations. This measure ensures that patients and medical facilities will avoid price increases for these products.

Another significant change is the extension of the standard VAT rate to hemp products intended for smoking or inhalation without combustion. This is a step towards sealing the tax system and eliminating loopholes used in the market for hemp products.

The entry for fertilizers, plant protection products and feeds in Annex 3 of the VAT Act has also been clarified. The lack of clear definitions of these products has hitherto caused controversy in domestic jurisprudence and difficulties in applying the regulations.

Noteworthy is the reduction of the VAT rate on the supply of menstrual cup from 23% to 5%. This change is part of a broader trend of facilitating access to hygiene products, which are important for public health.

Extension of the reverse charge mechanism for gas and energy

The amendment to the Act also provides for the extension of the reverse charge mechanism for VAT in transactions relating to the supply of gas in the gas system, electricity in the electric power system, and the transfer of greenhouse gas emission allowances. This mechanism transfers the obligation to account for tax from the seller to the buyer. It is only applied in transactions between active VAT taxpayers where the supply of goods or provision of services is not exempt under Article 113 of the VAT Act.

This solution is based on Article 199a of the VAT Directive and applies in countries such as Austria, the Czech Republic, Germany, and Portugal. Poland has extended the possibility of its application until February 28, 2025. However, the regulations introduced allow this form of settlement to continue until 31 December 2026, in compliance with EU regulations. The continuation of the reverse charge mechanism aims to limit tax abuse and simplify settlements in the energy and gas sectors.

Abolition of the obligation to integrate cash registers with payment terminals

One of the significant changes introduced by the amendment is the cancellation of the obligation to integrate cash registers with payment terminals. Initially, this obligation was postponed until the end of 2024, but the Ministry of Finance decided to abolish it entirely. The reason for this decision was the difficulties reported by entrepreneurs with the availability of terminals allowing full integration with cash registers.

In the transition period, the obligation to report payment transaction data was imposed on acquirers only. This solution proved sufficient to achieve the goal of sealing the tax system, so maintaining the requirement to integrate cash registers with terminals lost its economic and administrative justification.

Changes to excise duty on cars

The Ministry of Finance proposes new regulations concerning the refund of excise duty for passenger cars temporarily registered in Poland for export abroad. According to the draft, entities that have paid excise duty on such vehicles will be able to apply for a refund. The prerequisite is submission of an application to the relevant head of the tax office and providing documents confirming the payment of excise duty and the export of the vehicle.

The proposed changes are expected to reduce the number of complaints against decisions denying excise refunds and to make it easier for entrepreneurs to trade cars on foreign markets. Additionally, the introduction of an excise exemption is planned for vehicles used for research and development purposes, subject to professional registration under the provisions of the Road Traffic Act. This solution is expected to support innovation and R&D activities in the automotive sector.

Amendments to the Excise Duty Act, Public Health Act, and other acts – higher taxes and new restrictions on smokers

On January 21, 2025, the government approved a draft amendment to the Act amending the Excise Tax Act, the Public Health Act, and certain other acts, which will significantly impact the market for tobacco products and their substitutes. According to the draft, from August 2025, all smoking devices, including disposable and reusable e-cigarettes as well as heating devices, will be subject to an excise duty of PLN 40. This means an increase in their prices of about PLN 50 after adding VAT. Additionally, pouches containing nicotine as well as those without nicotine will also be taxed. The rate for pouches will initially be PLN 2.4, and eventually PLN 4.

The new regulations also introduce a ban on the sale and advertising of nicotine-free e-cigarettes and nicotine pouches, as well as the withdrawal of flavored heating cartridges, which currently dominate the market for innovative tobacco products. The changes introduced are expected not only to increase budget revenues, estimated at PLN 473 million a year from 2026, but above all to reduce the scale of addiction. According to the authors of the regulations, even products without nicotine can lead to addiction, which is why these restrictions are considered a key element of the state’s health policy.

Summary

The 2025 amendment to the tax acts introduces significant changes for entrepreneurs, especially in the areas of VAT and excise duty. The abolition of the obligation to integrate cash registers with payment terminals, reductions in tax rates for selected products, and the extension of the reverse charge mechanism represent steps toward simplifying tax settlements. At the same time, the tightening of regulations on tobacco products shows that the legislature is seeking not only to increase budget revenues, but also to protect public health. Entrepreneurs should carefully analyze the new regulations to adapt their operations accordingly.

Legal basis

• Act of January 24, 2025, on amending the Act on the VAT Act, the Excise Duty Act, and certain other acts
• Draft Act on Amendments to the Excise Duty Act, the Public Health Act, and certain other acts

If you have any further questions or require additional information, please contact your business relationship person or use the enquiry form on the HLB Poland website.

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