Zero VAT on Food – Decision by the Minister of Finance

Minister of Finance, Magdalena Rzeczkowska signed a regulation extending the maintenance of the “zero” VAT rate on food, the Ministry of Finance announced on Saturday.

Nowadays, the rate will remain applicable to basic food products, such as fruit, vegetables, meat, dairy and cereal products. At the same time, they focus the activities on the price of energy and its carriers as well as the price of gas. There will be a constant monitoring of the situation and reaction to external shocks, noted the Minister of Finance Magdalena Rzeczkowska.

More details about the decision by the Minister of Finance:

The regulation also provides for a reduction to 8% on fertilizer products, which before the introduction of the anti-inflation shield were taxed at 21%. This reduction will be valid for 2 years.

In addition, the regulation maintains a rate of 0%. VAT for supplies of goods and free provision of services for purposes related to helping victims of the effects of hostilities on the territory of Ukraine.
The regulation is to enter into force on 1 January 2023.

This case was discussed in the Sejm by Deputy Minister of Finance Artur Soboń. The Ministry of Finance assumes the possibility of continuing the zero VAT rate on food after the first half of 2023.

As stated in the regulatory impact assessment for the draft amendment to the regulation on goods and services for which the VAT rate is reduced and the conditions for applying reduced rates, the reduction of the VAT rate on food products is a total cost for the state budget of PLN 9.4 billion PLN.

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.