Government to impose excise duty on e-cigarettes

It appears that Polish government is soon going to reach deeper into its citizens’ pockets. Government Legislation Centre has recently published information that lawmakers plan to work on changes to the Excise Tax Act. The government intends to broaden the group of goods on which the levy is imposed. Experts’ predictions suggest the move may bring 100 million PLN a year to the state budget.

The products the excise tax is to be imposed on are the so-called electronic cigarettes (or, more specifically, the liquids used in e-cigarettes) and what is described as “innovative products”. The new regulations will be based on the existing provisions that today apply to cigarettes and other tobacco products.

E-cigarette liquids usually, but not always, contain nicotine, and are regarded, and advertised, as cigarette substitute. The lawmakers see the need to put them on par with other tobacco products, at least when it comes to taxation. The rate of tax imposed on the product will depend on the volume of liquid. The proposed basic rate is 0.7 PLN per 1 ml. The term “innovative products” mainly refers to products allowing their users to consume nicotine in the form of inhalation. The suggested tax rate imposed on them will be 141.29 PLN per kilogram.

Both categories of products the legislators put their focus on have been present in the market for a few years. Until now, there has been no special levies imposed on them. However, they have drawn the attention of lawmakers from other countries. Among the European states which have already imposed taxation on e-cigarettes are Italy, Portugal, Slovenia, Finland and Hungary.

Intra-Community acquisition of goods by a physical person for their own use (not for trade) will be exempt from the tax.

E-cigarettes in Poland are popular, compared to other countries. However, from last year, they cannot be legally sold over the internet.

What This Means for Businesses in Poland

Tax policy changes in Poland have direct implications for both domestic and foreign-owned businesses. Companies operating in Poland must stay informed about regulatory developments to optimize their tax position and maintain compliance. The Polish tax system includes CIT (19% standard, 9% for small taxpayers), VAT (23% standard rate with reduced rates of 8% and 5%), and various sector-specific levies.

For international entrepreneurs and investors, understanding the Polish tax landscape is essential for business planning. Poland offers several attractive incentives including the Polish Investment Zone (up to 15 years of CIT exemption), R&D tax relief (up to 200% deduction), and the IP Box regime (5% effective CIT rate on qualified intellectual property income). Professional tax advisory can help identify the most beneficial structure for your specific situation.

The interplay between Polish domestic tax law and international tax treaties is particularly important for foreign-owned entities. Transfer pricing regulations, withholding tax provisions, and anti-avoidance rules (GAAR) require careful navigation to ensure both compliance and optimization.

If you are doing business in Poland or considering entering the Polish market, Zalewski Consulting can help. Learn more about our tax advisory services in Poland, or contact us for a free consultation.