The increase in the VAT rate on food from April 1, 2024
15 March 2024
The Ministry of Finance has announced that from April 1, 2024, the reduced VAT rate on basic food products will not be continued. Instead of the zero VAT rate, which has been in effect since February 2022, a rate of 5% will be applied. This decision was justified by a decrease in inflation, which seems to be stable at 3.9% on an annual basis, according to preliminary data from the Central Statistical Office (GUS) for January 2024.
The 0% VAT rate was introduced when the inflation rate reached 9.2% in January 2022. However, due to a significant decrease in inflation, the Ministry of Finance has decided to return to a 5% VAT rate on products such as:
- Meat and fish and their products,
- Milk and dairy products,
- Eggs,
- Natural honey,
- Nuts,
- Vegetables and fruits and their processed products,
- Animal and vegetable edible fats,
- Grains and grain products, including bread and bakery products,
- Specific infant and child nutrition preparations and milk, as well as dietary foods for special medical purposes.
For taxpayers who sell these products, this means the necessity of:
- Reprogramming cash registers to apply the 5% VAT rate again from April 1st on their sales,
- Proper determination of VAT rates before and after changes,
- Updating the Binding VAT Information (BVI) operated.
The return to the 5% value-added tax (VAT) rate on food, however, could lead to a sudden increase in inflation by about 0.9 percentage points, according to experts’ forecasts. The change in the VAT rate could be particularly noticeable for individuals with lower incomes, as food constitutes a significant portion of their expenses. Additionally, the return to the 5% VAT rate on food will contribute to a significant increase in state budget revenues.
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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