Amendments to Polish VAT Act

The 2011 VAT amendments in Poland brought about important changes regarding input VAT deductions for passenger cars. Furthermore important changes may come into force on 1 April 2011.


Input VAT deduction for vehicles.
As from 1 January 2011, the right to deduct input VAT on purchases of passenger cars and other vehicles with a total weight below 3.5 tons as well as the fuel for such vehicles is restricted to 60% of tax, and not more than PLN 6,000. 

Conditional increase of VAT rates.
The new VAT Act allows conditional increases of VAT rates by one percentage point, if the ratio of public debt to GDP in years 2011, 2012 or 2013 exceeds 55%. 

Possible Changes as of 1 April 2011.

  • Abolishment of the ban on input VAT deduction as regards importation of services from the countries considered as ”tax havens”.
  • Compulsory reverse-charge mechanism if an entity which does not have its registered seat, permanent place of residence or fixed establishment in the territory of the country provides services or supplies goods there.
  • Changes in the rules of settling the VAT factor (i.e. coefficient used to determine the amounts of input VAT that could be deducted in the case goods or services purchased by the taxpayer are used for the purpose of performing both VATable and VAT exempt transactions) – (1) abolition of the prohibition on the deduction of input tax, if the proportion of taxable turnover in the total turnover does not exceed in the previous year the 2% coefficient (the deduction will be optional and not mandatory) and (2) change of the provision permitting the deduction of input tax in full, if the above proportion exceeded 98% and the amount of the non-deductible VAT per year was less than 500 PLN.  

Implementing regulations to the Polish VAT Act.

The following regulations can be found on the website of the Polish Ministry of Finance.

  • Regulation on implementing certain provisions of the Act on tax on goods and services;
  • Amended regulation on refunding tax to some taxpayers, invoicing, the manners of storing invoices and the list of goods and services falling outside the scope of the goods and services tax exemptions;
  • Amended regulation on tax return templates for tax on goods and services.


Piotr Zarski

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